Algonquin Power Income Fund proposes to acquire Clean Power Income Fund

    TORONTO, Feb. 26 /CNW/ - Algonquin Power Income Fund ("APIF") and Clean
Power Income Fund ("CPIF") announced today that they have entered into a
support agreement in respect of an offer (the "Offer") to be made by Algonquin
Power Trust ("APT"), the sole beneficiary of which is APIF, to acquire all of
the outstanding trust units of CPIF. The Offer values each unit of CPIF at
$5.88 per unit, based on the last 20-day volume weighted average closing price
of APIF units and including the full value of the contingency value receipt
("CVR") described below. The entering into of the support agreement has been
approved by the Boards of Trustees of both APIF and Clean Power Operating
Trust ("CPOT"), the sole beneficiary of which is CPIF.
    The Offer will be made by way of a take-over bid with consideration equal
to (a) the issuance of 0.6152 trust units of APIF for each CPIF trust unit
(which represents an equivalent value of $5.61 based on the last 20-day volume
weighted average closing price of APIF units of $9.12) plus (b) a CVR, which
receipt will entitle the holder thereof, subject to certain conditions, to a
payment in cash of an amount up to approximately $0.27 per CPIF trust unit.
The CVRs represent the right to receive 80% of the balance (after deduction of
all claims and costs) of both the US$7.593 million reserve fund established by
CPIF for claims made in connection with the sale of Gas Recovery Systems, LLC
and $3.436 million in the event Erie Shores Wind Farm qualifies for Wind Power
Production Incentive of $10/MW-hr.
    The Board of Trustees of CPOT has, upon the recommendation from its
Special Committee and after consultation with its financial and legal
advisors, determined that the Offer is in the best interests of CPIF
unitholders and has agreed to support the Offer and recommend that CPIF
unitholders accept the Offer.
    "The acquisition of CPIF is highly complementary to APIF and represents
an important step in the execution of APIF's continuing strategy to acquire
high quality, long-lived assets that generate stable and sustainable cash
flows. The CPIF assets are well positioned to complement APIF's existing
technologies and to leverage APIF's technical and operating expertise",
commented Ian Robertson, a senior manager of APIF. "The acquisition enables
APIF to minimize the impact of the proposed changes to taxation policies for
income trusts beyond 2011, reduces APIF's foreign exchange exposure, and
results in a longer average power purchase agreement life for the combined
portfolio." The acquisition of CPIF is expected to be accretive to APIF.
    John Fox, Chairman of the Special Committee, stated that "this merger
with APIF represents the best outcome for CPIF unitholders and culminates a
lengthy and exhaustive unitholder value enhancement process undertaken over
the course of the past year. The transaction provides CPIF unitholders ongoing
participation in a stronger, larger and more liquid combined entity. The Board
believes that the transaction is in the best interest of CPIF unitholders and
has agreed to support the Offer and recommends that CPIF unitholders accept
the Offer. As part of the agreement signed today, CPIF has retained the right
to solicit alternative proposals from third parties during the period the
Offer is open for acceptance and to consider any proposal which may arise."
    Scotia Capital Inc., the financial advisor to CPOT, has provided an
opinion to the Board of Trustees of CPOT that the consideration to be received
under the proposed Offer is fair, from a financial point of view, to
unitholders of CPIF.
    The support agreement provides for the payment by CPIF of a break fee
equal to $1,750,000 plus the amount of third party costs incurred by APIF, to
a maximum of $850,000, under certain circumstances. The support agreement also
contemplates termination of the management agreement and the administration
agreement that Clean Power Management LP (the "Manager/Administrator") has
with CPOT and CPIF, respectively, under the terms previously agreed to between
the Manager/Administrator and CPOT.
    It is anticipated that details of the Offer will be mailed to CPIF
unitholders on or before March 23, 2007. The Offer is expected to be open for
acceptance for a period of 35 days from mailing unless withdrawn or extended.
The Offer will be conditional upon, among other things, at least 66 2/3% of
the outstanding CPIF trust units (other than trust units held at the date of
the Offer by or on behalf of APIF or its affiliates) being validly deposited
under the Offer and there not occurring any material adverse change in the
business, facilities, operations, assets or liabilities of CPIF and/or any of
its subsidiaries or affiliated entities, taken as a whole.
    In addition to its trust units, CPIF has 6.75% convertible debentures
outstanding in the principal amount of $55 million (the "Convertible
Debentures"). APIF intends to make an offer by way of a take-over bid for the
acquisition of the Convertible Debentures and it is anticipated that APIF will
announce the terms of such additional offer prior to the expiry of the Offer.
Pursuant to the Trust Indenture governing the Convertible Debentures, holders
of Convertible Debentures may put their debentures to CPIF upon a change of
control and CPIF has the option to pay such debentures in cash or by
delivering up CPIF trust units. If CPIF elects to pay for any Convertible
Debentures so delivered in cash, APIF has set aside sufficient funds to enable
CPIF to do so. The Offer is not conditional upon the outcome of any offer or
transaction involving the Convertible Debentures.

    Conference Call

    APIF will host a live conference call at 4:00 p.m. eastern time on
Monday, February 26, 2007. To participate by telephone, please call
780-409-1668 or toll free at 1-800-525-6384, conference code 1210058. An
archived telephone recording of the call will be available until March 5, 2007
by calling 1-800-766-3394 or 402-220-7734 and entering pass code 1210058.

    About Algonquin Power

    Algonquin Power Income Fund is an open-ended investment trust that owns
and has interests in a diverse portfolio of power generating and
infrastructure assets across North America, including 47 hydroelectric
facilities, five natural gas-fired cogeneration facilities, 17 alternative
fuels facilities and 17 water supply and waste-water facilities. Algonquin
Power Income Fund was established in 1997 to provide unitholders with
sustainable, highly stable cash flows through a diversified portfolio of
energy and infrastructure assets. Algonquin Power Income Fund's units and
convertible debentures are traded on the Toronto Stock Exchange under the
symbols APF.UN and APF.DB/APF.DB.A respectively, and units are included in the
S&P/TSX Composite Index. More information about Algonquin Power Income Fund
can be found at www.AlgonquinPower.com.

    About Clean Power

    Clean Power Income Fund is an open-ended investment trust that is
invested in 15 power generating facilities located in Québec, Ontario,
Alberta, British Columbia and four U.S. states with a total capacity of
303 MW. Three environmentally preferred technologies - windpower, waterpower
and biomass - deliver electricity almost exclusively under long-term sales
contracts and at minimal to zero fuel cost.
    Clean Power Income Fund is the first income fund to be certified under
the Government of Canada's Environmental ChoiceM Program. Clean Power Income
Fund's units and convertible debentures are listed and posted for trading on
the Toronto Stock Exchange under the symbols "CLE.UN" and "CLE.DB",
respectively.
    More information about Clean Power Income Fund can be found at
www.cleanpowerincomefund.com.

    Forward Looking Statements

    Certain statements contained in the information herein are
forward-looking and reflect the views of the Fund and Algonquin Power
Management Inc. (the "Manager") with respect to future events. Since
forward-looking statements address future events and conditions, by their very
nature, they involve inherent risks and uncertainties. Forward-looking
statements are not guarantees of the Fund's future performance or results and
are subject to various factors, including, but not limited to, assumptions
such as those relating to: the performance of the Fund's assets, commodity
market prices, interest rates, and environmental and other regulatory
requirements. Although the Fund and its Manager believe that the assumptions
inherent in these forward-looking statements are reasonable, undue reliance
should not be placed on these statements, which apply only as of the dates
hereof. The Fund and its Manager are not obligated nor do either of them
intend to update or revise any forward-looking statements, whether as a result
of new information, future developments or otherwise.

    %SEDAR: 00009265E

For further information: Kelly Castledine, Algonquin Power Income Fund,
2845 Bristol Circle, Oakville, Ontario, L6H 7H7, (905) 465-4500, Fax (905)
465-4514, APIF@AlgonquinPower.com; Clean Power Income Fund, 67 Yonge Street,
16th Floor, Toronto, Ontario M5E 1J8, 1-866-430-6247, Fax (416) 777-1190,
info@cleanpowerincomefund.com