GreenHunter Energy Closes on $30 Million of Tax-Exempt Recovery Zone Facility Bonds

GreenHunter Mesquite Lake, LLC, a wholly-owned subsidiary of GreenHunter Energy, Inc. (NYSE Amex: GRH), announced today that it has closed on approximately $30 million in tax-exempt Recovery Zone Facility Bonds issued through the California Enterprise Development Authority (CEDA). The bond proceeds, together with GreenHunter Energy’s equity and taxable bonds anticipated to be issued later this year, will provide the necessary financing for the construction, refurbishment, installation, equipping, and expansion of an existing biomass power generation facility (“Mesquite Lake”) located near El Centro, California owned by the Company.

“GreenHunter Energy’s application for a Recovery Zone Facility Bond allocation rated applicants on several key elements such as community need, job creation, and the energy efficiency of the proposed project. We scored above the required points value, demonstrating both the viability of the project and its importance to the local community,” said Gary C. Evans, Chairman and Chief Executive Officer. “Due to the issuance of these CEDA bonds, we now have access to low-cost funding that will be necessary to cover the majority of our projected construction costs, and continue the permitting, engineering, and contracting processes required to get this project commercially operational.”

Phase I of the project is anticipated to be operational on or before December 2011. When Phase II of the project is completed and in operation, which is anticipated by mid 2012, the Mesquite Lake 27 Megawatt Biomass Facility will burn annually more than 280,000 tons of waste biomass which will be converted into green electricity and sold to the local utility. At full capacity, the plant could provide enough electricity to serve approximately 18,000 homes. The plant is located in a region that the U.S. Bureau of Labor Statistics registers as having the highest unemployment rate in the United States of 27.3 percent, and the Imperial Valley Economic Development Corporation estimates that approximately 642 jobs will be directly or indirectly created as a result of the project development, adding much needed vibrancy to this region.

Pillsbury Winthrop Shaw Pittman LLP is a full-service international law firm with market-leading strengths in the energy, financial services, real estate and technology sectors, and increasingly health care and education. Based in the world’s major financial and technology centers, Pillsbury counsels clients on global finance, regulatory, litigation and corporate matters. We work in multidisciplinary teams that allow us to anticipate trends and bring a 360-degree perspective to complex business and legal issues—helping clients to take greater advantage of new opportunities and better mitigate risk. This collaborative work style helps produce the results our clients seek.

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GreenHunter Energy is focused on the renewable energy sectors of wind power, hydro, geothermal, solar, biofuels, and biomass power plants. Our assets consist of a residual interest in the future development of a wind energy project located in California, one of the nation’s largest biodiesel refineries located in Houston, Texas, and a biomass-fired power plant located near Imperial, California. Headquartered in Grapevine, Texas, GreenHunter Energy was formed to be the first publicly traded renewable energy company based in the U.S. that provides to investors a portfolio of diversified assets in the alternative energy sector.