Sierra Geothermal Power Announces Private Placement of Up to $4 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 25, 2009) -

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Sierra Geothermal Power Corp. (SGP) (TSX VENTURE:SRA) is pleased to announce that it is undertaking a private placement of up to 18,181,818 units (the "Units") at a price of $0.22 per unit for gross proceeds of up to $4,000,000. Each Unit will consist of one common share and one non-transferable common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to purchase one additional common share at a price of $0.30 for a period of two years after closing.

Jacob Securities Inc. will act as lead agent. The lead agent, together with any cooperating brokers, will receive an aggregate cash commission in an amount equal to seven percent of the gross proceeds, together with such number of broker warrants as is equal to seven percent of the number of units sold. Each broker warrant will entitle the holder to purchase one common share at an exercise price of $0.22 for a period of two years after closing.

Sierra Geothermal proposes to use the net proceeds of this financing to fund drilling and geophysical activities at its tier one geothermal projects in Nevada, and for general administrative expenses.

Closing of the private placement is anticipated to occur on or before September 30, 2009 and is subject to the receipt of applicable regulatory approvals including approval of the TSX Venture Exchange. The securities issued will be subject to a four month hold period.

About Sierra Geothermal Power Corp.

Sierra Geothermal Power Corp. is a renewable energy company focused on the exploration and development of clean, sustainable geothermal power. Its executive office is in Vancouver, British Columbia and its common shares are listed on the TSX Venture Exchange under the symbol SRA. Its portfolio of geothermal projects is located in Nevada and California and consists of over 90,000 acres with a combined total estimated capacity of greater than 500 MW. SGP intends to finance development by utilizing a combination of corporate equity, joint venture partnerships and project debt, with the support of US government grants and loan guarantees. To find out more about Sierra Geothermal Power Corp. (TSX VENTURE:SRA) visit our website at www.sierrageopower.com.

On behalf of the Board of Directors

Gary Thompson, P.Geo, President, Chief Executive Officer and Director

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management's plans and objectives for future operations. In some cases you can identify forward-looking statements by the use of terminology such as "may", "should", "anticipates", "believes", "expects", "intends", "forecasts", "plans", "future", "strategy", or words of similar meaning. Forward-looking statements in this press release include statements about the proposed private placement and Sierra Geothermal's intent to finance the development of its projects through a combination of corporate equity, joint venture partnerships and project debt with the support of U.S. government grants and loan guarantees. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks inherent in our industry, the challenging capital markets and other risks identified by us in our periodic filings on SEDAR (which can be viewed at www.sedar.com). Any of these risks could cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of its business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this press release. Except as required by applicable law, including the securities laws of Canada, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

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