VANCOUVER, May 31, 2011 /PRNewswire/ – Alterra Power Corp. (TSX: AXY) announces the signing by its wholly-owned subsidiary, Magma
Energy Sweden AB (“Magma Sweden”), of a Share Purchase Agreement with
Jarôvarmi slhf (“Jarôvarmi”), a company owned by a group of 14
Icelandic pension funds. This transaction was previously announced on
April 18, 2011 and has now been formalized with the completion of a
definitive Share Purchase Agreement. Under the terms of the agreement,
Magma Sweden will sell a 25% interest in its 98.5%-owned Icelandic
geothermal power company HS Orka hf to Jarôvarmi for ISK 8.06 billion
(approximately US $69.8 million). The transaction is expected to close
by June 2, 2011.

Magma Sweden was advised on the transaction by Saga Investment Bank
based in Iceland.

Magma Sweden has also signed a Share Purchase Agreement with four
Icelandic municipalities to purchase a 1.5% interest in HS Orka hf for
ISK 475 million (approximately US$ 4.1 million). This transaction is
expected to close by June 9, 2011.

Upon completion of the transactions, Magma Sweden will own a 75%
interest in HS Orka and the remaining 25% will be owned by the
Icelandic pension funds’ company Jarôvarmi.

Jarôvarmi will also hold an option until February 10, 2012 to purchase
new shares from HS Orka treasury that, if exercised, would increase its
stake in HS Orka by 8.4% at a cost of ISK 4.7 billion (approximately US
$40.7 million). Assuming the option is exercised, Jarôvarmi would hold
33.4% of HS Orka. Jarôvarmi will hold significant minority shareholder
rights to appoint Board members and participate in the major decisions
of HS Orka as long as it continues to hold at least a 22.5% interest.

About Alterra Power Corp.

Alterra Power Corp is a leading global renewable energy company, formed
in 2011 through the merger of Magma Energy Corp and Plutonic Power
Corp. We produce 1,800 GWh of clean power annually from 191 MW of
geothermal capacity in Iceland and Nevada, as well as 94 MW of
run-of-river hydro and 73 MW of wind capacity in British Columbia. We
have an extensive portfolio of exploration and development projects, a
skilled international team of explorers, builders & operators and
strong financial capacity to support our aggressive growth plans.

About HS Orka

HS Orka is the largest privately owned energy company in Iceland
producing 9% of the country’s power needs and 10% of the country’s
heating needs. Installed geothermal power capacity is 175 MW from the
Svartsengi and Reykjanes power plants. In addition, HS Orka generates
150 MW of thermal energy for district heating. Expansions are planned
that could increase HS Orka’s geothermal power production to 405 MW by
2016.

Cautionary Note regarding Forward-Looking Statements and Information

This news release contains certain “forward-looking information” within
the meaning of Canadian securities laws, which may include, but is not
limited to, statements with respect to future events or future
performance, prospects for closing of the sales described in the Share
Purchase Agreements, the fulfillment of all conditions precedent to the
obligation of the parties under the agreements, required consents and
third party approvals. This news release also contains statements with
respect to our plans to expand our operations and HS Orka’s plans to
expand their geothermal power production, management’s expectations
regarding our growth, business prospects and opportunities and
geothermal energy generation capacities. Such forward-looking
information reflects management’s current beliefs and is based on
information currently available to management.

SOURCE Magma Energy Corp.