SOURCE: Colusa Biomass Energy Corporation

September 12, 2006 09:45 ET

Colusa Biomass Energy Obtains Equity Financing

COLUSA, CA -- (MARKET WIRE) -- September 12, 2006 -- Colusa Biomass Energy Corporation (PINKSHEETS: CLME) today announced the closing of a successful negotiation for a sale of equity to Mr. Eoghan Flanagan, a highly successful hedge fund manager. In addition to Mr. Flanagan's significant equity purchase, he has accepted the invitation of the Colusa Biomass Energy Corporation Board of Directors to join the Board. Mr. Flanagan has a considerable background in international financial markets.

Tom Bowers, CLME President, said, "I am particularly delighted that Mr. Flanagan has joined the Board of CLME. With his international experience and background, CLME can accelerate its examination of the continuing inquiries from abroad into the technologies we have developed for the conversion of biomass to ethanol. Over the past several months CLME has received many inquiries from all over the world. With Eoghan leading the evaluation of these business opportunities, the balance of the management team and I can continue to focus on bringing our California ethanol bio-refinery operations online as planned for 4th quarter 2007. These steps will greatly enhance CLME's position for international and domestic growth."

Eoghan Flanagan said, "Cellulosic ethanol has been an area of great interest to me for some time. During my research of this technology, I found Colusa Biomass to be the state-of-the-art leader in this area. I am very excited to make this investment and to be part of CLME's future."

About Colusa Biomass Energy Corporation

Colusa Biomass Energy Corporation (PINKSHEETS: CLME) in planning to build a bio-refinery which is engineered to convert waste rice straw residue into ethanol. The plant is based on CLME patented and proprietary technologies that converts waste biomass into ethanol for use in transportation fuels. It is important to note that the CLME technology takes nothing from the food stream but only consumes waste biomass such as straws, wood chips, forest slash and orchards trimmings.

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This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 27E of the Securities Act of 1934. Statements contained in this release that are not historical fact may be deemed to be forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from the projected or suggested herein due to certain risks and uncertainties including, without limitation, ability to obtain financing and regulatory and shareholder approval for anticipated actions.

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