Calpine announces first international geothermal project in Mexico.

SAN JOSE, Calif.--(BUSINESS WIRE)--Nov. 20, 1995--Calpine Corp., one of the nation's largest producers of geothermal energy, today announced it has entered into its first international energy venture.

The company signed an agreement with Constructora y Perforadora Latina S.A. de C.V. (Coperlasa) to participate in a 160mw geothermal steam field contract at the Cerro Prieto geothermal resource in Baja California, Mexico.

The steam field contract is between Coperlasa and Mexico's national utility, Comision Federal de Electricidad (CFE). Calpine will invest $18.5 million, structured as a senior secured loan to Coperlasa, and will receive fees for technical services provided to the project. Loan proceeds will be used to fund construction of new geothermal wells in order to increase steam production to full contract requirements. The company will also pay $1.5 million to acquire an option to purchase a 29 percent equity interest in Coperlasa.

In addition to Calpine's loan, a consortium of Mexican banks, led by Banca Serfin, will lend an additional $4 million to the project.

The steam contract was awarded to Coperlasa in 1990, and originally provided for production of 800 tons of steam per hour. In 1992, the contract was expanded to 1,600 tons per hour - sufficient steam to generate 160mw from CFE's geothermal power plants. Payments under the CFE steam contract will be made in pesos, adjusted for increases in Mexican and U.S. inflation and for currency exchange rate variations.

In commercial development since 1973, the Cerro Prieto resource is located in the Mexicali Valley on the Baja California peninsula. The resource currently produces approximately 620mw of electricity from three geothermal power plants owned and operated by CFE. This production supplies approximately 70 percent of northern Baja California's electricity demand. Thus, Cerro Prieto is a critically important resource to CFE.

Calpine Corp. develops, owns and operates natural gas-fired projects and is the second largest producer of geothermal energy in the United States. Its portfolio includes investments in more than 1,100mw of power facilities - enough energy to meet the electrical needs of more than a million households.

CONTACT: Calpine Corp.

Katherine Potter, 408/995-5115