Covanta receives credit facilities extension

Fairfield, NJ, February 8, 2002 – Covanta Energy Corporation announced today that it has received approval from its bank group for an amendment to its Master Credit Facility, which would grant Covanta, among other things, an extension of its covenant waivers.

Covanta had announced on January 30, 2002 that its bank group co-agents were circulating the amendment to the Facility’s larger bank group and recommending approval of its terms.

The amendment extends the covenant waivers through March 31, 2002, conditioned on the Company achieving strict cash management goals as of February 28, 2002. Absent this agreement, the waivers would have expired on January 31, 2002. During this extension, the Company will continue the strategic review process it had announced on December 21, 2001.

“We’re pleased to have concluded this agreement. This will enable us to continue our strategic review, while continuing to operate our facilities and serve our clients according to the same high standards we’ve always maintained. The proposed terms require us to meet strict cash management goals, however, in order to enable us to extend through March,” said Scott G. Mackin, President and Chief Executive Officer. “The Board remains very pleased with our operational performance and with the financial performance of our core waste-to-energy, independent power and water businesses.”

Covanta Energy Corporation is an internationally recognized designer, developer, owner and operator of power generation projects and provider of related infrastructure services.

The company’s independent power business develops, structures, owns, operates and maintains projects that generate power for sale to utilities and industrial users worldwide. Its waste-to-energy facilities convert municipal solid waste into energy for numerous communities, predominantly in the United States.

The company also offers single-source design/build/operate capabilities for water and wastewater treatment infrastructures. Additional information about Covanta can be obtained via the Internet at www.covantaenergy.com.

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