Sea Breeze Power : Announces Filing of Restructuring Proposal

NEWS RELEASE

SEA BREEZE POWER CORP. ANNOUNCES FILING OF RESTRUCTURING PROPOSAL

January 3, 2017 TSX-VENTURE: SBX.V

Sea Breeze Power Corp. announced today that on December 30, 2016 (the "Filing Date") the company and one of its wholly-owned subsidiaries, Sea Breeze Energy Inc. (together, "Sea Breeze" or the "Company"), have filed a joint proposal to their creditors (the "Proposal") for restructuring purposes under the Bankruptcy and Insolvency Act.

As a result of its extensive investment in multiple early-stage power generation projects and ongoing investigation, development and administrative costs, the Company continues to operate at a loss and has had to finance its operations largely by way of secured loans from a number of shareholders (collectively, the "Secured Lenders"). The Secured Lenders recently advised the Company that they were no longer prepared to continue to provide financing.

In addition, on September 9, 2016, an arbitration award was granted in favour of certain royalty holders ordering the Company to pay the royalty holders in excess of $1,250,000 in damages and costs.

In light of the foregoing, the Company determined that it was unable to continue to meet its obligations as they came due. With the support of the Secured Lenders Sea Breeze has developed the Proposal, which is intended to satisfy the Company's obligations to both its unsecured creditors and the Secured Lenders, as well as to facilitate the continued development of the Company's many projects. The Proposal contemplates the sale of certain of the Company's assets to the Secured Lenders in satisfaction of a portion of their secured claims against the Company, as well as the sale of the residual assets of the Company.

The Proposal, if approved by the Company's creditors and the Supreme Court of British Columbia, will also provide for the cancellation of all existing securities of Sea Breeze Power Corp., including all outstanding shares and warrants.

The Secured Lenders have agreed to continue to fund Sea Breeze through to the conclusion of its restructuring process, and therefore the Company is expected to be able to meet all of its obligations incurred after the Filing Date. It is expected that Sea Breeze's existing management will remain in place during the restructuring process.

Sea Breeze believes that the Proposal provides the best possible outcome for its stakeholders in the circumstances, and also allows for the continued development of the power projects it has invested in.

As a res ul t of the f i li ng of the Propos al , Sea Bree ze' s c redi tors are s tayed f rom i ni ti ati ng or c onti nui ng c l ai ms or enforcing any rights or remedies against Sea Breeze.

The meeting of creditors to vote on the Proposal (the "Meeting") is scheduled to be held at 10:00 a.m. on January 18, 2017 at the Vancouver offices of Fasken Martineau DuMoulin LLP.

Under the Proposal, Alvarez & Marsal Canada Inc. (the "Proposal Trustee") was appointed proposal trustee with authority to, among other things, report to the Company's creditors on the Proposal, assist with the proof of claims process, chair the Meeting (subject to the approval of the Official Receiver) and generally assist with Sea Breeze's restructuring. Information concerning the Company's restructuring and the Proposal can be found on the Proposal Trustee's website at: www.alvarezandmarsal.com/seabreeze, and any inquiries may be directed to the Proposal Trustee.

Sea Breeze is a Vancouver-based renewable energy company focused on unlocking British Columbia's enormous but "stranded" renewable energy potential. Sea Breeze has been engaged in the development of utility-scale wind farms, "run-of-river" hydroelectric projects, and through a joint venture, the development of state-of-the-art electricity transmission projects.

ON BEHALF OF THE BOARD OF DIRECTORS

"Resja Campfens"

per: Resja Campfens, President & CEO

Neither TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this release. Cautionary Statement Regarding Forward-Looking Information and Statements This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the Proposal are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include risks relating to the failure to obtain approval from the Company's creditors and the Supreme Court of British Columbia in connection with the Proposal and other risks detailed herein and from time to time in the filings made by the Company.