THERMAL ENERGY RAISING UP TO $1,640,000 THROUGH THE ISSUANCE OF TAX DEDUCTIBLE FLOW THROUGH SHARES, VIA SHAREHOLDER RIGHTS OFFERING

Shareholders will be granted one (1) Right per Common Share held as at February 11, 2002. Four (4) Rights and $0.40 entitle the holder to purchase one Common Share of the Company on a flow-through basis prior to 4:00 PM (Toronto Time) on March 27, 2002; in accordance with the terms of the Rights Offering Circular of the Company dated January 31, 2002.

THERMAL ENERGY RAISING UP TO $1,640,000 THROUGH THE ISSUANCE OF TAX DEDUCTIBLE FLOW THROUGH SHARES, VIA SHAREHOLDER RIGHTS OFFERING

OTTAWA, CANADA -- February 6, 2002 -- Thermal Energy International Inc. (CDNX: TMG) is pleased to announce the approval of a unique Rights Offering to shareholders, which also utilizes an attractive income tax deductibility mechanism for raising capital through the issuance of Flow Through Shares (or FTS). Through the Rights Offering, the Company is permitted to raise up to $1,640,000 at $0.40 per share, by issuing up to 4,100,000 Flow Through Shares, in order to accelerate the growth of the Companys "Renewable Energy" business.

Shareholders will be granted one (1) Right per Common Share held as at February 11, 2002. Four (4) Rights and $0.40 entitle the holder to purchase one Common Share of the Company on a flow-through basis prior to 4:00 PM (Toronto Time) on March 27, 2002; in accordance with the terms of the Rights Offering Circular of the Company dated January 31, 2002.

Revenue Canada has recently sanctioned the FTS mechanism for financing developmental costs associated with "Renewable Energy" projects. With respect to Thermal Energy, the qualifying costs which would be funded by the FTS mechanism would include sales, marketing, business development, and project development costs which would be spent by the Company in support of developing FLU-ACE® projects over the 2002 and 2003 calendar years.

This FTS investment mechanism carries the added benefits of: permitting the FTS investors full deductibility of the amount invested from the FTS investors gross annual income for income tax purposes over the proposed 2002 and 2003 calendar year period, while the FTS investor retains the potential capital gain benefit of the Companys Common Shares. In addition, if necessary, the FTS investor may carry forward the tax deductibility feature of the amount invested beyond the 2003 year for deduction in future taxation years.

For further details, please read the Rights Offering Circular, dated January 31, 2002.

Thermal Energy International Inc. is a leading provider to industry of unique cost-effective energy conservation and environmental compliance solutions headquartered in Ottawa, Canada. More on Thermal Energy can be found at www.thermalenergy.com. FLU-ACE‚ is a registered trademark of Thermal Energy. Common shares of Thermal Energy are traded on the Canadian Venture Exchange (CDNX) under the symbol TMG.

The contents of this release have neither been approved or disapproved by the Canadian Venture Exchange

For more information, please contact:

Thomas V. Hinke, P. Eng.,    or         Oliver Toffoli, P.Eng.
President & CEO                VP Finance & Administration, CFO
thinke@thermalenergy.com            toffoli@thermalenergy.com

613-723-6776 ext. 201 -- phone             613-723-6776 ext. 202 -- phone   
613-723-7609 -- fax