Calpine secures US$373M credit facility to finance construction of 120-MW upgrade of Los Esteros Critical Energy Facility in San Jose, California, from simple-cycle to combined-cycle natural gas-fired technology

HOUSTON , August 23, 2011 (press release) – Calpine Corporation (NYSE:CPN) today announced that it has obtained a $373 million credit facility to finance construction of a 120 MW upgrade of its Los Esteros Critical Energy Facility in San Jose, California. The Company also announced that its Board of Directors has authorized the Company to repurchase up to $300 million in shares of its common stock.

“With the financing for our major construction projects now complete and our liquidity more than sufficient to support these and our other near-term growth alternatives, we have turned our focus to the next step in our ongoing capital allocation process,” said Jack Fusco, Calpine’s President and Chief Executive Officer. “Given the current stock market environment and its impact on our share price, coupled with our positive long-term outlook for the company, we believe share repurchases at appropriate price levels represent an attractive opportunity to increase returns to our shareholders over the long term.”

More on the Upgrade of the Los Esteros Critical Energy Facility

Upon completion of construction, which is expected in mid-2013, the Los Esteros Critical Energy Facility will be upgraded from simple-cycle to combined-cycle natural gas-fired technology, enhancing the plant’s efficiency and environmental performance and increasing its overall generation capacity.

The related project finance facility announced today includes $68 million in letter of credit facilities and a $305 million construction loan that will convert to a 10-year term loan when commercial operations begin. The construction loan and term loan facility will initially be priced at LIBOR plus 2.25%. The loan facility – jointly arranged by Credit Agricole CIB, Banco Bilbao Vizcaya Argentaria S.A., Bayerische Landesbank and West LB AG – is non-recourse to Calpine.

More on the Share Repurchase Program

The share repurchase program announced today is effective immediately. Repurchases may be made from time to time through open market purchases or privately negotiated transactions, in accordance with applicable securities laws. These repurchases may be commenced or suspended from time to time without prior notice.

As of August 22, 2011, Calpine had 489,999,535 shares of common stock outstanding.

About Calpine

Founded in 1984, Calpine Corporation is a major U.S. power company, currently capable of delivering approximately 28,000 megawatts of clean, cost-effective, reliable and fuel-efficient power from its 92 operating plants to customers and communities in 20 U.S. states and Canada. Calpine Corporation is committed to helping meet the needs of an economy that demands more and cleaner sources of electricity. Calpine owns, leases and operates primarily low-carbon, natural gas-fired and renewable geothermal power plants. Using advanced technologies, Calpine generates power in a reliable and environmentally responsible manner for the customers and communities it serves. Please visit our website at www.calpine.com for more information.

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