INTERNAL HYDRO ENTERS EUROPEAN JOINT VENTURE.

Internal Hydro International Inc., (OTCBB:IHDR), Tampa, Fla., has entered into an initial agreement for the production of its Energy Commander and other technologies through a European joint venture. Under the agreement, with Energia Futura S.r.l. of Italy, IHDR would receive necessary capital for production of its low impact hydro units and other technologies, which will be worth over $3,750,000 for the initial 500 units for domestic U.S. production alone in the first year out production. Under the agreement, IHDR would be part owner of the joint production facility which would have hard assets, including facilities and equipment of a projected $40,000,000 value, which will be bookable assets for IHDR. Financial requirements for the production and other costs related to the technologies will be secured and supplied through European banking and grant entities to the Joint Venture. IHDR will not be subject to any set equity based contribution to achieve financial aspects of the Joint Venture.

IHDR, as a founding partner of the Joint Venture can sponsor other companies as sub-partners of IHDR whose technologies will be built in Europe in the renewable energy arena. Energia Futura's technology base will include wind projects, solar technologies, low head hydro systems, including the Energy Commander suite of technologies, and solid or bio waste remediation technologies. The Joint Venture agreement will be an expansion of the existing production and licensing agreement between IHDR and Cm2, the Italian energy products manufacturer. Energia and the production facility will be managed by Cm2's senior management, who will have overall responsibility for the large facility. Initially, four companies will be owners and joint venture partners of Energia and the joint production facility. Under the initial agreement IHDR will become a joint venture partner with an ownership interest in the Joint Venture facility and equipment which has been preliminarily identified to be positioned at an extensive facility which has been revitalized in Narni, Italy. IHDR has identified other technologies which it may choose to introduce into the Joint Venture as IHDR sponsored technologies, giving IHDR an even larger stake in the Joint Venture ownership for such technologies. As a Joint Venture owner, IHDR will receive a share of the profit from the Joint Venture activities.

Concurrent with the Joint Venture agreement, IHDR will proceed with the production of Energy Commander units through Cm2 in Terni, Italy, until the Joint Venture facility is ready to take over production. Under the agreement, IHDR will be a co-occupant of the facility with the other partner companies, however, due to its pre-existing contractual relationship with Cm2, IHDR's production and staffing will be by Cm2, thus alleviating pay roll and other costs to the company for production. In addition, under offered grants and other government backing from local and other entities, IHDR would receive long term loans and other financing, of 85% of all costs of production, materials, labor costs, and other expenditures for all production or activity at the facility. The Joint Venture was initiated by government and private entities in order to revitalize industries and produce jobs, while at the same time produce renewable energy technologies for Italian, European and other production.

The agreement was achieved by the CEO of IHDR during meetings with Energia and Cm2 in Narni and Rome, and was based upon a long held goal of Cm2 and sponsoring entities to achieve a production home for renewable technologies. The initial agreement is expected to reach the formal agreement phase upon completion of final identification and securing of the facility, and other governmental sponsorships which have been offered.

About Internal Hydro International, Incorporated

Internal Hydro International, Inc. is an alternative energy company that developed a clean energy power system, the Energy Commander Systems, which utilizes a patented technology using waste water, fluid or gas flow from any source where flow pressure is present, and yet wasted, to create electricity. Internal Hydro has grown into a multi-national enterprise with international contracts spanning over three continents. Internal Hydro is well positioned to gain major market share and dominate the niche of hydro energy and expansion into other renewable energy areas in the fragmented alternative energy marketplace.

For more information, visit http;//www.InternalHydro.com or call 713/320-3596.