Startec Energy Announces Sale of Section 29 Units

Startec Energy Inc. announces it has signed an agreement for the sale of the Section 29 tax credit units, which will then begin to generate revenue for the company. The close of the sale depends on several factors, some of which are beyond the control of Startec Energy. The estimated revenue stream should continue through the year of 2007, depending on certain milestones and other criteria.

STARTEC ENERGY ANNOUNCES SALE OF SECTION 29 UNITS

Startec Energy, Inc., a Startec Inc. Company, announced that the limited liability companies, in which it is a member, have signed agreements for the sale of three qualified Section 29 Tax Credit Fuel Processing Systems owed by the limited liability companies. The asset sales represent approximately 80% of the companys total assets as of December 31, 2001. Startec believes this sale could result in an income stream beginning in 2003. The closing of the sale is subject to the following conditions precedent among others, many of which are beyond the control of Startec:

·   Satisfaction of buyers financing conditions
·   Relocation of the fuel processing system
·   Placement of the fuel processing systems into production and the achievement of certain production minimums
·   Receipt of a favorable IRS ruling (PLR)
·   Regulatory approval of Hart-Scott-Rudino conditions

If established, this income stream is expected to continue through the year 2007, depending upon production milestones and other criteria, the achievement of which cannot be assured.

If you have any questions, feel free to visit the website at www.startecinc.com or e-mail us at startecenergy@aol.com. Further contact information is available on the website.

Except for the historical information contained in this press release, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as believes", expects", anticipates", intends", plans", seeks", estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon managements expectations and beliefs concerning future events and are subject to uncertainties, risks and other factors, (including, but not limited to, those specified below), which are difficult to predict and in many instances are beyond the control of the company. As a result, actual results of the company may differ materially from those expressed or implied by such forward-looking statements. Factors that may cause the actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to, the fact that the buyer of the equipment being sold has the option to withdraw from the project if the required conditions are not met. Other risk factors include, but are not limited to, the site location achieving the required operating permits in a timely fashion, and/or securing contracts for the feed stock supply and/or securing adequate syn-fuels sales contracts. All of the above as well as other limiting factors are beyond the control of Startec Energy, Inc.