The company will use raised funds to acquire a stake in Shenzhen Nanshan Power Co., Ltd. from Shenzhen Energy Corporation at a fair price assessed by qualified intermediary agencies, should all power plant subsidiaries of Shenzhen Nanshan Power obtain approval from relevant government authorities to begin construction and operations, pursuant to an asset acquisition via an issuance of new shares report (related-party transaction), within 18 months upon completion of the asset acquisition via issuance of the company's new shares.

The company will acquire 65,106,130 A-shares in Shenzhen Nanshan Power from Shenzhen Energy Corporation at RMB 5.17 per share, and Newton Industrial Limited, an overseas subsidiary of the company, will acquire 92,123,248 B-shares in Shenzhen Nanshan Power from Hong Kong Nanhai International Co., Ltd., an overseas affiliate of Shenzhen Energy Corporation, at HKD 3.51 per share. Both transactions are in compliance with relevant laws and regulations.

Shenzhen Energy Corporation is the controlling shareholder of the company with a 63.74% stake. Hong Kong Nanhai International is a subsidiary of Shenzhen Energy (Hong Kong) International Co., Ltd. Shenzhen Energy (Hong Kong) International is a wholly-owned overseas subsidiary of Shenzhen Energy Corporation. Hence, the above-mentioned deals to acquire A-shares and B-shares in Shenzhen Nanshan Power constitute related-party transactions.

The related-party transactions have been approved by the 3rd Meeting of the 6th Board of Directors, held on 25 Aug 2008, nevertheless, they are subject to approvals of both relevant government authorities and shareholders of the company.

Board of Directors
27 Aug 2008


Source: Shanghai Stock Exchange

Date: 27 Aug 2008

CN01/FL/SW/BT/KM