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Panda Energy, Alliant Energy form joint venture to build and operate Tallmadge Project

DALLAS, TEXAS, October 16, 2001 — Panda Energy International, Inc. and Alliant Energy Corp. today announced they have formed a joint venture to construct and operate the 1,100 megawatt natural gas, combined-cycle power facility currently in development in West Michigan’s Tallmadge Township.

Panda Energy said the agreement with Madison, Wisc.-based Alliant Energy represents an important step in ensuring the project remains on schedule for full operation in early 2004. Construction will begin in the spring of 2002 at the site near 8th Avenue and Lake Michigan Drive. Under the joint venture, Panda will continue to lead the development while Alliant Energy will provide the four state-of-the-art natural gas turbines to be used at the facility, as well as additional long-lead equipment used to interconnect the facility to the region’s power grid. Alliant Energy also brings extensive facility operations experience to the joint venture.

“We have said from the beginning of the Tallmadge project that when it came time to select a joint venture company, we would look for an organization capable of contributing resources and operational experience,” said Garry Hubbard, Panda’s Senior Vice President of Engineering, Construction and Development. “In Alliant Energy, we have one of the energy services firms in the Midwest, an organization with an outstanding track record of quality projects in U.S. and around the world. Panda Energy International is very pleased to be working with Alliant Energy to make the Tallmadge facility a great example of modern, clean power generation.”

The facility, set for development on an industrially master-planned parcel, will help meet the rapidly rising demand for power throughout Michigan. The combined-cycle gas design of Tallmadge facility will include the latest technological advances that have made the generation of electricity cleaner than ever before. It is anticipated that emissions in the area will actually decrease as a result of the power plant by offsetting emissions from older coal-burning plants with higher emission rates.

“The Tallmadge plant is an exceptionally well-developed, well-sited project that reflects considerable vision and commitment on the part of Panda Energy International,” said William D. Harvey, Alliant Energy’s Executive Vice President – Generation. “Alliant Energy has evaluated a number of different generation opportunities in Michigan and determined that Tallmadge was the best fit for us. We are very enthusiastic about the joint venture and the opportunity to help advance this outstanding facility.”

Headquartered in Dallas, Texas, Panda Energy International, Inc. is a privately held, non-regulated electric generation company whose primary focus is the development, ownership and operation of state-of-the-art, environmentally clean, low-cost power plants. The company recently arranged the financing of $2.2 billion to construct the nation’s two largest natural gas power plants located in Eldorado, Arkansas and Gila Bend, Arizona. The company has plants in Roanoke Rapids, North Carolina; Brandywine, Maryland, and it has an ownership in three 1,000 megawatt plants it developed in Guadalupe County, Paris and Odessa, Texas. Panda also has developed and owned plants in China and Nepal and is the developer and a partner in three 1,000 megawatt merchant plants presently being constructed in the United States. Panda has developed 9,000 megawatts that are either under construction or in commercial operation. Panda also has 10,000 megawatts of electric generating capacity currently in advanced development and an additional 6,500 megawatts in the early stages of development.

Additional information on Panda Energy International, Inc. can be found at www.pandaenergy.com.

Alliant Energy, headquartered in Madison, Wis., is a growing energy-services provider with operations both domestically and internationally. Alliant Energy, through its subsidiaries and partners, provides electric, natural gas, water and steam services to over three million customers worldwide. Alliant Energy Resources, Inc., home of the company’s non-utility businesses, has operations and investments throughout the United States as well as in Australia, Brazil, China and New Zealand.