Great Lakes Hydro Income Fund Reports 2005 Second Quarter Results

Stock Symbol: GLH.UN/TSX

GATINEAU, July 26 /CNW Telbec/ - Great Lakes Hydro Income Fund (GLH.UN:
TSX) today announced results for the second quarter ended June 30, 2005.

- Power generation in the second quarter met or exceeded long-term
  average in three of the Fund's four regions. However, the Fund's power
  system in Ontario was affected by unusually low rainfall requiring the
  Fund to preserve water in order to maintain the reservoir near normal
  levels. As a result, power generation for the second quarter of 2005
  totalled 989 GWh, 6 percent lower than long-term average and 4 percent
  below the generation of the same quarter in 2004.
- Revenue from operations totalled $43.3 million and $83.8 million for
  the three and six months ended June 30, 2005, respectively, compared to
  $47.5 million and $98.5 million for the same periods in 2004, the
  result of the poor hydrology conditions in Ontario and lower generation
  relative to long-term average.
- Income before non-cash and special items totalled $22.9 million and
  $41.7 million for the three and six months ended June 30, 2005,
  respectively. This compares to $24.9 million and $53.6 million for the
  same periods in 2004. The special item consists of a $10.2 million
  payment made to the Great Lakes Power Trust bondholders to compensate
  them for their loss of yield resulting from early redemption of the
  bonds. This will allow the Fund to take advantage of the current low
  interest rate environment and to extend the average duration of its
  long-term debt. This payment will not impact distributions to
  unitholders.

"Despite challenging hydrology conditions in Ontario during the second
quarter of 2005, we remain well positioned to deliver stable distributions to
unitholders, backed by the solid performance of our QuDebec, British Columbia
and New England assets. During the latter half of the year, we will continue
to invest in maintaining and improving the value of our assets and to seek
opportunities to enhance our power business," said Richard Legault, President
and Chief Executive Officer.

<<
2005 FINANCIAL AND OPERATING HIGHLIGHTS
-------------------------------------------------------------------------
                                        Three months          Six months
Unaudited                              ended June 30       ended June 30
(CDN$ millions, except where noted)   2005    2004(1)     2005    2004(1)
-------------------------------------------------------------------------

Revenues                            $ 43.3    $ 47.5    $ 83.8    $ 98.5
Income before non-cash and
 special items                        22.9      24.9      41.7      53.6
Income before non-cash items          12.7      24.9      31.5      53.6
Net income                             5.5      17.4      16.3      36.7
Distribution                          14.6      14.5      29.3      29.0
Per unit
  Net income                          0.11      0.36      0.34      0.76
  Income before non-cash and
   special items                      0.47      0.52      0.86      1.11
  Income before non-cash items        0.26      0.52      0.65      1.11
Power generated (GWh)                  989     1,032     1,911     2,186
Average price-cents (cents/KWh)       4.4        4.6       4.4       4.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) As a result of the adoption of accounting guideline 15, Great Lakes
    Hydro Income Fund now fully consolidates Powell River Energy. All
    prior period financial comparatives have been restated.


DISTRIBUTIONS

November 1, 2004, the Fund announced an increase in distributions to
unitholders commencing in January 2005 from 10 cents/unit/month to
10.125 cents/unit/month. This will result in a total annual distribution in
2005 to unitholders of $58.7 million, as compared to $57.9 million in 2004.

The schedule below sets out cash distribution history for the last six
months:

RECORD DATE             PAYMENT DATE             DISTRIBUTION PER UNIT
-------------------------------------------------------------------------
May 31, 2005            June 30, 2005                10.125 cents
April 30, 2005          May 31, 2005                 10.125 cents
March 31, 2005          April 30, 2005               10.125 cents
February 28, 2005       March 31, 2005               10.125 cents
January 31, 2005        February 28, 2005            10.125 cents
December 31, 2004       January 31, 2005             10 cents
>>

ADDITIONAL INFORMATION

The Letter to Unitholders, the supplemental information and the Fund's
unaudited quarterly financial information for the period ended June 30, 2005,
contain further information on the Fund's operations and financial results.
These documents are available on the Fund's website at
www.greatlakeshydro.com . It is expected that the Fund's unaudited interim
report will be filed by early August 2005.

FORWARD-LOOKING STATEMENTS

The Fund's news release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The words
"believe," "expect," "anticipate," "intend," and other expressions which are
predictions of or indicative of future events and trends and which do not
relate to historical matters identify forward-looking statements. Reliance
should not be placed on forward-looking statements because they involve known
and unknown risks, uncertainties and other factors, which may cause the actual
results, performance or achievements of the business to differ materially from
anticipated future results, performance or achievements expressed or implied
by such forward-looking statements. Factors that could cause actual results to
differ materially from those set forth in the forward-looking statements
include general economic conditions, weather conditions, interest rates,
foreign exchange rates, availability of equity and debt financing and other
risks. The Fund undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.

Q2 CONFERENCE CALL

A conference call for investors and media to review the second quarter
results for 2005 will be held on July 27, 2005 at 10:00 a.m. (EST). To
participate in the conference call, please dial 416-640-4127 or 1-800-814-3911
toll free in North America, at 9:50 a.m. (EDT). For those unable to
participate in the Conference Call, a taped rebroadcast will also be available
until midnight July 29, 2005. To access this rebroadcast, please call         
1-877-289-8525, toll free in North America, and enter the passcode 21130781
(pound key).

ABOUT GREAT LAKES HYDRO INCOME FUND

Great Lakes Hydro Income Fund is a premier Canadian income fund and one
of the largest power income fund in North America with 986 megawatts of power
generating capacity and an average annual production of 3,711 gigawatt hours.
Great Lakes Hydro Income Fund produces electricity exclusively from
environmentally friendly hydroelectric resources. The Fund owns, operates and
manages 24 high quality hydroelectric generating stations located on seven
river systems in four distinct geographic regions across North America:
QuDebec, Ontario, British Columbia and New England.
Brascan Power, which comprises the majority of the power operations of
Brascan Corporation, owns 50.1% of the Fund's outstanding units. Great Lakes
Hydro Income Fund units are listed for trading on the Toronto Stock Exchange
under the symbol GLH.UN.
%SEDAR: 00013106EF