Clearford Water Systems Announces Expanded $100 Million Funding Commitment for Canadian Water Infrastructure Projects and Updates on North American Activities

Ottawa, Ontario – (February 27, 2018) – Clearford Water Systems Inc. (“Clearford” or the “Company”), (TSX-V: CLI), winner of the Frost & Sullivan 2017 Best Practices Award for Enabling Technology Leadership in the Global Decentralized Water and Wastewater Treatment Industry, today announced that it has entered into a memorandum of understanding (“MOU”) with Sustainable Water Investments Inc. (“SWI”), a Vancouver-based investment vehicle formed and capitalised by a European bond issuance platform, pursuant to which SWI agreed to arrange the financing, up to 100% of the capital costs, associated with the implementation of certain qualified water and wastewater-related infrastructure development projects, including ongoing operations and maintenance contracts, under Clearford’s Pay-for-Performance (P4P®) delivery model, up to an aggregate value of $100 million (the “Project Finance Facility”).

The MOU supersedes and expands on funding terms previously agreed with Clearford to include Canadian private developments, in addition to municipal, with adequate credit rating and/or collateral value to service long-term financial obligations under the P4P® delivery model for the Design and Build, Operate and Maintain (“DBOM”) offering of water and wastewater systems, including, but not limited to, the Company’s proprietary all-in-one Clearford One® wastewater system and advanced M‑brane™ packaged treatment solutions. Under the terms of the MOU, SWI was granted a right of first refusal (“ROFR”) on the financing of each qualified DBOM project until February 28, 2020. The Project Finance Facility will support the execution of the strategic business plan originally announced by the Company on June 22, 2017, and supplements the Company’s recent acquisition of Koester Canada Inc. (now “Clearford-Koester”) and its subsidiary, Team Aquatic Operations Group (now “Clearford Waterworks”).

In conjunction with the execution of the MOU, the Company has already drawn the amount of US$1.1 million from the Project Finance Facility, supported by ongoing operations and maintenance contracts of Clearford-Koester. The advance was made by way of a 10-year loan, bearing a simple interest rate of 9.75%, payable on a semi-annual basis, with the principal amount due at end of term, secured by way of general security agreement on the assets of Clearford-Koester. A transaction fee of US$82,500 was charged with respect of the MOU and the first instalment made thereunder.

The Company is also providing an update on its activities in the North American market. Clearford-Koester recently moved into a 30,000 square foot manufacturing facility and offices located in Hamilton, Ontario, which, along with integrated business and engineering support from other members of the Clearford group of companies, will allow the Company to triple its production capacity for fabricating containerized and skid-mounted treatment solutions.

Richard Nie, formerly President of Koester Canada Inc. commented: “The support we have received since joining Clearford has enabled us to accelerate the sales and delivery of our packaged M-brane™ plants, particularly in New York State where the Koester brand is well recognized for its quality. The sales backlog in New York State alone currently stands at US$1.4 million, while interest from customers in the United States as a whole is growing due to Clearford-Koester’s newly enhanced value proposition.” Clearford has signed conditional contracts totalling CAD $8.3 million, under these contracts clients have the right to delay or cancel all future obligations at their discretion.

Opportunities in Ontario also continue to develop after the first two M-brane™ plants were delivered under DBOM contracts for (i) the Fetherston mobile part servicing project in late 2015, and (ii) the $1.2 million landfill leachate treatment facility in Ontario in 2017. Clearford-Koester is the first contractor in Ontario to implement hybrid membrane technology from Ontario-based Fibracast and German-made industrial tubular membranes from Berghof Membranes.

“The sales pipeline in Ontario is strengthening with $1.5 million in signed contracts for execution in 2018 and $5.5 million in awarded contracts, which are currently going through governmental approval processes. The Company also has additional opportunities, in relatively advanced stages, mainly for recreational, resort and estate-type developments requiring innovative water servicing solutions”, added Mr. Nie. “The Company is uniquely positioned for complementary sales of the unified Clearford One® solution, including treatment plants which utilise the UV Pure® disinfection products and long-term operating services contracts through its Clearford Waterworks division, similar to the recently signed 5-year operations and maintenance agreement for the private water distribution and wastewater treatment systems at Carp Airport in Ottawa, which is currently completing the installation of the Clearford One collection network.”

Kevin Loiselle, President & CEO of Clearford, commented: “This is precisely the type of robust sales pipeline that Clearford requires in order to execute on its business plan. In the space of only three months since acquiring Koester-Canada, Clearford has taken control of the value chain critical to its market penetration. It has also identified advanced sales opportunities, with increasing margins, generating steady cash flows from utility-like operations of water and wastewater systems”. Mr. Loiselle added: “Under the previous P4P funding arrangement, Clearford was restricted to municipal servicing opportunities that meet the credit ratings required by traditional lending facilities. The expanded P4P framework provides for far greater flexibility, and therefore opportunity, capturing the underlying value of the assets being created or serviced under our watch.”

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term defined is in policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About Clearford Water Systems Inc.

Clearford Water Systems Inc. (TSX-V: CLI) is a provider of unified water management solutions for the design, build, finance, operation and maintenance of water and wastewater infrastructure systems. The Company’s technology-based water solutions include the Clearford One® wastewater infrastructure systems, Clearford M‑brane™ packaged treatment solutions, and a full range of UV Pure® water disinfection products. Clearford is the winner of the Frost & Sullivan 2017 Enabling Technology Leadership Award for Global Decentralized Water & Wastewater Treatment. For more information on Clearford Water Systems, please visit

Forward Looking Statements

This news release contains certain statements that constitute forward-looking statements as they relate to the Company and its management. Forward-looking statements are not historical facts but represent management’s current expectation of future events, and can be identified by words such as “believe”, “expects”, “will”, “intends”, “plans”, “projects”, “anticipates”, “estimates”, “continues” and similar expressions. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.

By their nature, forward-looking statements include assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those in the forward-looking statements. If and when forward-looking statements are set out in this news release, Clearford will also set out the material risk factors or assumptions used to develop the forward-looking statements. Except as expressly required by applicable securities law, the Company assumes no obligation to update or revise any forward looking statements. The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: industry cyclicality; the ability to secure third party agreements; successful integration of Clearford’s system with third party technology; competition; reduction in demand for products; collection from customers; relationships with suppliers; product liability; intellectual property; reliance on key personnel; environmental; interest rates; uninsured and underinsured losses; operating hazards; risks of future legal proceedings; income tax matters; credit facilities; availability and terms of financing; distribution of securities; restrictions on potential growth; effect of market interest rates on price of securities; and potential dilution.

For more information contact:

Kevin Loiselle, President & CEO
Clearford Water Systems Inc.
Phone: (613) 599-6474 ext. 303

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