Subordinated Borrower Charge Over Accounts - Wuhu Shaoda Electric Power Development Co. Ltd. and AES China Holdings Co. Ltd.


             WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED
                                   as Borrower



                                       and



                     AES CHINA HOLDINGS COMPANY (L) LIMITED
                                as Junior Lender






                   SUBORDINATED BORROWER CHARGE OVER ACCOUNTS






                             CHADBOURNE & PARKE LLP
                            AMERICAN ATTORNEYS AT LAW

                           SUITE 3704, PEREGRINE TOWER
                           LIPPO CENTRE, 89 QUEENSWAY
                                    HONG KONG





                                    CONTENTS


Number    Clause Heading                                                Page
- ------    --------------                                                ----

1.        Interpretation..................................................1
2.        Charge..........................................................2
3.        Continuing Security.............................................3
4.        Representations and Warranties..................................3
5.        Undertakings....................................................3
6.        Condition of Deposits...........................................4
7.        Enforcement.....................................................4
8.        Taxes and Other Deductions......................................5
9.        Costs, Charges and Expenses.....................................5
10.       Set-off.........................................................6
11.       Indemnity.......................................................6
12.       Further Assurance...............................................7
13.       Power of Attorney...............................................7
14.       Suspense Account................................................8
15.       Waiver and Severability.........................................8
16.       Miscellaneous...................................................8
17.       Assignment.....................................................10
18.       Notices........................................................10
19.       Governing Law and Jurisdiction.................................10
20.       Subordinated Security..........................................11



Schedule 1        Charged Accounts.......................................13
Schedule 2        Form of Notice and Acknowledgement.....................14



Execution Block




THIS DEED is made on the               day of                           1996
                         -------------        -------------------------


BETWEEN:

(1)        WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED, an equity
           joint venture company formed under the Law of the People's Republic
           of China on Joint Ventures Using Chinese and Foreign Investment, with
           its registered office at Commercial Office Building, West Huangshan
           Road, Wuhu, Anhui Province, People's Republic of China (the
           'Borrower'); and

(2)        AES CHINA HOLDINGS COMPANY (L) LIMITED, a Labuan company of Lot A,
           Level 3, Wisma Oceanic, Jalan OKK Awang, 87007, Federal Territory of
           Labuan, Malaysia (the 'Junior Lender').


WHEREAS:

(A)        By the AES Loan Agreement (as defined below), the Junior Lender has
           agreed to make available to the Borrower a term loan facility of up
           to eighteen million Dollars (US$18,000,000), upon the terms set out
           therein.

(B)        It is a condition precedent to the Junior Lender making the Facility
           available to the Borrower that the Borrower enters into this Deed.


NOW THIS DEED WITNESSES as follows:

1.         INTERPRETATION

1.01       Definitions and Construction.  In this Deed, unless the context 
           requires otherwise:

           (a)      terms and expressions defined in or construed for the
                    purposes of the AES Loan Agreement shall have the same
                    meanings or be construed in the same manner when used in
                    this Deed;

           (b)      'AES Loan Agreement' means the loan agreement dated -------
                    1996 and made between the Junior Lender and the Borrower;

           (c)      'Bank' means Bank of China, Wuhu Branch at 233 Jiuhuashan
                    Road, Wuhu, China;

           (d)      the expression 'Charge' shall include any right of set-off;

           (e)      'Charged Accounts' means the Borrower RMB Revenue Account,
                    the Borrower Dollar Retention Account and the Borrower
                    Special Dividends Account (as defined in the Senior Loan
                    Agreement), each held in the name of the Borrower with the
                    Bank and as more particularly



                                       1


                    described in Schedule 1, and
                    all sums now or hereafter deposited in such accounts and all
                    additions to or renewals or replacements of all or any part
                    thereof (in whatever currency) and all interest or other
                    sums which may accrue from time to time thereon;

           (f)      'Junior Secured Indebtedness' means all and any sums
                    (whether principal, interest, fees or otherwise) which are
                    or at any time may become payable by the Borrower under the
                    AES Loan Agreement or any Subordinated Security Document to
                    which it is a party and all other monies hereby secured.

1.02       Successors and Assigns. The expressions 'Borrower', 'Security Agent'
           and 'Junior Lender' shall where the context permits include their
           respective successors and permitted assigns and any persons deriving
           title under them.

1.03       AES Loan Agreement. To the extent applicable and required by relevant
           law, the terms and conditions of the AES Loan Agreement shall be
           deemed to be incorporated into this Deed by reference and this Deed
           shall be read and construed as if such terms and conditions had been
           set out in full herein.

1.04       Miscellaneous. In this Deed, unless the context requires otherwise,
           references to statutory provisions shall be construed as references
           to those provisions as replaced, amended, modified or re-enacted from
           time to time; words importing the singular include the plural and
           vice versa and words importing a gender include every gender;
           references to this Deed, the AES Loan Agreement, any other
           Subordinated Security Document or any other document referred to
           herein shall be construed as references to such document as the same
           may be amended or supplemented (provided that any required consent or
           approval for such amendment or supplement has been obtained) from
           time to time; unless otherwise stated, references to Clauses and the
           Schedules are to clauses of and the schedules to this Deed. Clause
           headings are inserted for reference only and shall be ignored in
           construing this Deed.


2.         CHARGE

2.01       Charge and Assignment. In consideration of the Facility being made
           available by the Junior Lender to the Borrower upon the terms and
           conditions of the AES Loan Agreement, the Borrower with full title
           guarantee charges to the Junior Lender by way of third fixed charge
           and grants a third-priority security interest to the Junior Lender in
           each of the Charged Accounts as a continuing security for the due and
           punctual payment of the Junior Secured Indebtedness and the due and
           punctual performance and observance by the Borrower of all other
           obligations of the Borrower contained in the AES Loan Agreement or
           any Subordinated Security Document to which it is a party. THIS
           CHARGE IS SUBORDINATE IN RIGHT TO THE CHARGES CREATED TO SECURE THE
           OBLIGATIONS



                                       2

 
           OF THE BORROWER UNDER THE SENIOR LOAN AGREEMENT, AND THE
           ENFORCEMENT OF THIS CHARGE SHALL BE LIMITED IN ACCORDANCE WITH THE
           PROVISIONS OF THE SENIOR SUBORDINATION AGREEMENT AND THE PRIORITY
           DEED.

2.02       Notice to Bank. The Borrower will, forthwith upon execution of this
           Deed, give notice to and obtain an acknowledgement from the Bank in
           the form set out in Schedule 2.


3.         CONTINUING SECURITY

           This Deed shall be a continuing security and shall remain in full
           force and effect until the Junior Secured Indebtedness has been paid
           in full, notwithstanding the insolvency or liquidation or any
           incapacity or change in the constitution or status of the Borrower or
           any other person or any intermediate settlement of account or other
           matter whatsoever. This Deed is in addition to, and independent of,
           any Charge, guarantee or other security or right or remedy now or at
           any time hereafter held by or available to the Junior Lender.


4.         REPRESENTATIONS AND WARRANTIES

4.01       Representations and Warranties.  The Borrower represents and warrants
           to the Junior Lender that:

           (a)      each of the Charged Accounts is beneficially owned by the
                    Borrower free from any Charge except as created (i) under or
                    pursuant to this Deed, (ii) to secure the obligations of the
                    Borrower under the Senior Loan Agreement or (iii) in respect
                    of the Guarantee, subject to any rights arising by operation
                    of law; and

           (b)      the particulars of each of the Charged Accounts set out in
                    Schedule 1 are accurate.

4.02       Continuing Representation and Warranty. The Borrower also represents
           and warrants to and undertakes with the Junior Lender that the
           foregoing representations and warranties will be true and accurate
           throughout the continuance of this Deed with reference to the facts
           and circumstances subsisting from time to time.


5.         UNDERTAKINGS

           The Borrower undertakes and agrees with the Junior Lender throughout
           the continuance of this Deed and so long as the Junior Secured
           Indebtedness or any part thereof remains owing that the Borrower will
           not, unless the Junior Lender otherwise agrees in writing:



                                       3

 
          (a)      withdraw or attempt to or be entitled to withdraw all or any
                    part of the monies in each of the Charged Accounts except in
                    accordance with the terms of the AES Loan Agreement;

           (b)      create or attempt or agree to create or permit to arise or
                    exist any Charge over all or any part of the Charged
                    Accounts or any interest therein or otherwise assign, deal
                    with or dispose of all or any part of the Charged Accounts
                    (except as created (i) under or pursuant to this Deed, (ii)
                    to secure the obligations of the Borrower under the Senior
                    Loan Agreement and (iii) in respect of the Guarantee); and

           (c)      do or cause or permit to be done anything which may in any
                    way depreciate, jeopardize or otherwise prejudice the value
                    of the Junior Lender's security hereunder except as
                    permitted by the terms of this Deed and as created to secure
                    the obligations of the Borrower under the Senior Loan
                    Agreement and the CPIL Security.


6.         CONDITION OF DEPOSIT

           Notwithstanding any other terms upon which monies may have been
           deposited in each of the Charged Accounts, throughout the continuance
           of this Deed it is a condition of such deposit that no monies shall
           be capable of being withdrawn from such Charged Accounts, neither the
           Charged Accounts nor any part thereof shall in any way be assignable
           or transferable and no Charge shall be capable of being created over
           or in respect of any of the Charged Accounts other than, in each
           case, in accordance with the terms of the AES Loan Agreement and the
           Senior Loan Agreement.


7.         ENFORCEMENT

7.01       Events of Default.  For the  purposes of this Clause,  each of the  
           following  events and  circumstances shall be an Event of Default:

           (a)      any event or circumstance which would constitute an Event of
                    Default as that term is defined in the AES Loan Agreement;
                    and

           (b)      if the Borrower purports or attempts to create any Charge
                    (except under this Deed or to secure the obligations of the
                    Borrower under the Senior Loan Agreement) over all or any
                    part of any of the Charged Accounts or any third party
                    asserts a claim in respect thereof.

7.02       Enforcement of Security. Upon the occurrence of an Event of Default,
           the Junior Lender may, subject to Clause 7.03 and the provisions of
           the Senior Subordination Agreement and the Priority Deed, at any time
           or times thereafter and without further notice or restriction,
           procure the appropriation, transfer or set off all or any part of the
           monies in any

                                       4

 
           Charged Account in or towards the payment or discharge
           of the Junior Secured Indebtedness in such manner as the Junior
           Lender may think fit and, for this purpose, the Junior Lender may, at
           the expense of the Borrower, convert all or any part of such monies
           into other currencies. The above provisions apply notwithstanding
           that any such monies may have been deposited for a fixed period or be
           subject to a period of notice and that the fixed period or period of
           notice may not have expired or that notice or sufficient notice may
           not have been given.

7.03       No Change in Name. Notwithstanding any other provision in this Deed,
           the Charged Accounts shall at all times be held in the name of the
           Borrower and the Junior Lender shall not at any time before or after
           enforcement or otherwise be entitled or otherwise able to change, or
           procure any change which would result in, any of the Charged Accounts
           being held otherwise than in the Borrower's name from time to time.


8.         TAXES AND OTHER DEDUCTIONS

           All sums payable by the Borrower under this Deed shall be paid in
           full without set-off or counterclaim or any restriction or condition
           and free and clear of any tax (other than an Excluded Tax) or other
           deductions or withholdings of any nature. If the Borrower or any
           other person is required by any law or regulation to make any
           deduction or withholding (on account of tax (other than an Excluded
           Tax) or otherwise) from any payment for the account of the Junior
           Lender, the Borrower shall, together with such payment, pay such
           additional amount as will ensure that the Junior Lender receives
           (free and clear of any tax (other than an Excluded Tax) or other
           deductions or withholdings) the full amount which it would have
           received if no such deduction or withholding had been required. The
           Borrower shall promptly forward to the Junior Lender copies of
           official receipts or other evidence showing that the full amount of
           any such deduction or withholding has been paid over to the relevant
           taxation or other authority.


9.         COSTS, CHARGES AND EXPENSES

           The Borrower shall from time to time forthwith on demand pay to or
           reimburse the Junior Lender for:

           (a)      all reasonable costs, charges and expenses (including legal
                    and other fees on a full indemnity basis and out of pocket
                    expenses) reasonably incurred by the Junior Lender in
                    connection with the preparation, execution and registration
                    of any amendment to or extension of, or the giving of any
                    consent or waiver in connection with this Deed; and

           (b)      all reasonable costs, charges and expenses (including legal
                    and other fees on a full indemnity basis and out of pocket
                    expenses) reasonably incurred by the Junior Lender in
                    exercising any of its

                                       5


                    rights or powers hereunder or in suing
                    for or seeking to recover any sums due hereunder or
                    otherwise preserving or enforcing its rights hereunder or in
                    defending any claims brought against it in respect of this
                    Deed or in releasing or re-assigning this Deed upon payment
                    of all monies hereby secured and until payment of the same
                    in full, all such costs, charges and expenses shall be
                    secured by this Deed.

           To the extent practicable, the Junior Lender shall consult the
           Borrower before incurring any major expenditure.


10.        SET-OFF

           Notwithstanding Clause 7 and/or any provision hereof, the Borrower
           agrees that the Junior Lender shall (without prejudice to any general
           or lender's lien, right of set-off or any other right to which it may
           be entitled) have the right, without notice to the Borrower or any
           other person, at any time to set off and apply any credit balance on
           any Charged Account (whether subject to notice or not and whether
           matured or not and in whatever currency) and any other indebtedness
           owing by the Junior Lender to the Borrower, against the Junior
           Secured Indebtedness in accordance with the provisions of clause
           16.03 of the AES Loan Agreement and the Junior Lender is authorized
           to purchase with the monies standing to the credit of any such
           accounts such other currencies as may be necessary for this purpose.


11.        INDEMNITY

11.01      General Indemnity. The Borrower shall indemnify the Junior Lender
           against all losses, liabilities, damages, costs and expenses incurred
           by it in the execution or performance of the terms and conditions
           hereof and against all actions, proceedings, claims, demands, costs,
           charges and expenses which maybe incurred, sustained or arise in
           respect of the non-performance or non-observance of any of the
           undertakings and agreements on the part of the Borrower herein
           contained or in respect of any matter or thing done or omitted
           relating in any way whatsoever to the Charged Accounts.

11.02      Currency Indemnity. Dollars shall be the currency of account and of
           payment in respect of sums payable under this Deed. If an amount is
           received in another currency, pursuant to a judgment or order or in
           the liquidation of the Borrower or otherwise, the Borrower's
           obligations under this Deed shall be discharged only to the extent
           that the Junior Lender may purchase Dollars with such other currency
           in accordance with normal banking procedures upon receipt of such
           amount. If the amount in Dollars which may be so purchased, after
           deducting any costs of exchange and any other related costs, is less
           than the relevant sum payable under this Deed, the Borrower shall
           indemnify the Junior Lender against the shortfall. This indemnity
           shall be an obligation of the Borrower independent of and

                                       6


           in addition
           to its other obligations under this Deed and shall take effect
           notwithstanding any time or other concession granted to the Borrower
           or any judgment or order being obtained or the filing of any claim in
           the liquidation, dissolution or bankruptcy (or analogous process) of
           the Borrower.

11.03      Payment and Security. The Junior Lender may retain and pay out of any
           money in the Junior Lender's hands all sums necessary to effect the
           indemnity contained in this Clause 11 and all sums payable by the
           Borrower under this Clause 11 shall form part of the monies hereby
           secured.


12.        FURTHER ASSURANCE

12.01      Further Assurance. The Borrower shall at any time and from time to
           time (whether before or after the security hereby created shall have
           become enforceable) execute such further legal or other mortgages,
           charges or assignments and do all such transfers, assurances, acts
           and things as the Junior Lender may require over or in respect of the
           Charged Accounts to secure all monies, obligations and liabilities
           hereby covenanted to be paid or hereby secured or for the purposes of
           perfecting and completing any assignment of the Junior Lender's
           rights, benefits or obligations hereunder and the Borrower shall also
           give all notices, orders and directions which the Junior Lender may
           require.

12.02      Enforcement of Junior Lender's Rights. Subject to the Senior
           Subordination Agreement and the Priority Deed, the Borrower will do
           or permit to be done everything which the Junior Lender may from time
           to time require to be done for the purpose of enforcing the Junior
           Lender's rights hereunder and will allow the name of the Borrower to
           be used as and when required by the Junior Lender for that purpose.


13.        POWER OF ATTORNEY

           The Borrower irrevocably appoints the Junior Lender by way of
           security to be its attorney-in-fact (with full power of substitution)
           and in its name or otherwise on its behalf and as its act and deed to
           sign, seal, execute, deliver, perfect and do all deeds, instruments,
           acts and things which may be required or which the Junior Lender
           shall think proper or expedient for carrying out any obligations
           imposed on the Borrower hereunder or for exercising any of the powers
           hereby conferred or for giving to the Junior Lender the full benefit
           of this security and so that the appointment hereby made shall
           operate to confer on the Junior Lender authority to do on behalf of
           the Borrower anything which it can lawfully do by an
           attorney-in-fact. The Borrower ratifies and confirms and agrees to
           ratify and confirm any deed, instrument, act or thing which such
           attorney-in-fact or substitute may execute or do.


                                       7


14.        SUSPENSE ACCOUNT

           The Junior Lender may place and keep any monies received by virtue of
           this Deed (whether before or after the insolvency or liquidation of
           the Borrower) to the credit of a suspense account for so long as the
           Junior Lender may think fit in order to preserve the rights of the
           Junior Lender to sue or prove for the whole amount of its claims
           against the Borrower or any other person.


15.        WAIVER AND SEVERABILITY

           No failure or delay by the Junior Lender in exercising any right,
           power or remedy hereunder shall impair such right, power or remedy or
           operate as a waiver thereof, nor shall any single or partial exercise
           of the same preclude any further exercise thereof or the exercise of
           any other right, power or remedy. The rights, powers and remedies
           herein provided are cumulative and do not exclude any other rights,
           powers and remedies provided by law. If at any time any provision of
           this Deed is or becomes illegal, invalid or unenforceable in any
           respect under the law of any jurisdiction, the legality, validity and
           enforceability of such provision under the law of any other
           jurisdiction, and of the remaining provisions of this Deed, shall not
           be affected or impaired thereby.


16.        MISCELLANEOUS

16.01      Continuing Obligations. The liabilities and obligations of the
           Borrower under this Deed shall remain in force notwithstanding any
           act, omission, event or circumstance whatsoever, until full, proper
           and valid payment of the Junior Secured Indebtedness.

16.02      Protective  Clauses.  Without  limiting  Clause  16.01,  neither the
           liability  of the Borrower nor the validity or enforceability of this
           Deed shall be prejudiced, affected or discharged by:

           (a)      the granting of any time or indulgence to the Borrower or
                    any other person;

           (b)      any variation or modification of the AES Loan Agreement, any
                    of the Subordinated Security Documents or any other document
                    referred to therein;

           (c)      the invalidity or unenforceability of any obligation or
                    liability of the Borrower under the AES Loan Agreement or
                    this Deed or any of the Subordinated Security Documents to
                    which it is a party;

           (d)      any invalidity or irregularity in the execution of this Deed
                    or the AES Loan Agreement or any of the other Subordinated
                    Security Documents;

                                       8


           (e)      any deficiency in the powers of the Borrower to enter into
                    or perform any of its obligations under the AES Loan
                    Agreement or any of the other Subordinated Security
                    Documents to which it is a party or any irregularity in the
                    exercise thereof or any lack of authority by any person
                    purporting to act on behalf of the Borrower;

           (f)      any other Subordinated Security Document, Charge, guarantee
                    or other security or right or remedy being or becoming held
                    by or available to the Junior Lender or by any of the same
                    being or becoming wholly or partly void, voidable,
                    unenforceable or impaired or by the Junior Lender at any
                    time releasing, refraining from enforcing, varying or in any
                    other way dealing with any of the same or any power, right
                    or remedy the Junior Lender may now or hereafter have from
                    or against the Borrower or any other person;

           (g)      any waiver, exercise, omission to exercise, compromise,
                    renewal or release of any rights against the Borrower or any
                    other person or any compromise, arrangement or settlement
                    with any of the same;

           (h)      any act, omission, event or circumstance which would or may
                    but for this provision operate to prejudice, affect or
                    discharge this Deed or the liability of the Borrower
                    hereunder.

16.03      Unrestricted Right of Enforcement. Subject to the Senior
           Subordination Agreement and the Priority Deed, this Deed may be
           enforced without the Junior Lender first having recourse to any other
           security or rights or taking any other steps or proceedings against
           the Borrower or any other person or may be enforced for any balance
           due after resorting to any one or more other means of obtaining
           payment or discharge of the monies obligations and liabilities hereby
           secured.

16.04      Discharges and Releases. Notwithstanding any discharge, release or
           settlement from time to time between the Junior Lender and the
           Borrower, if any security, disposition or payment granted or made to
           the Junior Lender in respect of the Junior Secured Indebtedness by
           the Borrower or any other person is avoided or set aside or ordered
           to be surrendered, paid away, refunded or reduced by virtue of any
           provision, law or enactment relating to bankruptcy, insolvency,
           liquidation, winding-up, composition or arrangement for the time
           being in force or for any other reason, the Junior Lender shall be
           entitled hereafter to enforce this Deed as if no such discharge,
           release or settlement had occurred.

16.05      Amendment. Any amendment or waiver of any provision of this Deed and
           any waiver of any default under this Deed shall only be effective if
           made in writing and signed by or on behalf of the party against whom
           the amendment or waiver is asserted.



                                       9


17.        ASSIGNMENT

17.01      The Borrower.  The Borrower shall not assign any of its rights or 
           obligations hereunder.

17.02      The Junior  Lender.  The Junior  Lender  may  assign or grant  
           participations  in all or any part of its rights under this Deed in 
           accordance with the provisions of clause 20 of the AES Loan 
           Agreement.


18.        NOTICES

18.01      Delivery. Each notice, demand or other communication to be given or
           made under this Deed shall be in writing and delivered or sent to the
           relevant party at its address or telex number or fax number set out
           below (or such other address or telex number or fax number as the
           addressee has by five (5) days' prior written notice specified to the
           other party):

           To the Borrower:         Wuhu Shaoda Electric Power Development
                                    Company Limited
                                    Commercial Office Building
                                    West Huangshan Road
                                    Wuhu, Anhui Province
                                    People's Republic of China

                                    Fax Number:           (86-553) 382-3224
                                    Attention:           Zhai Dao Ping

           To the Junior Lender:    AES China Holdings Company (L) Limited
                                    9th Floor, Allied Capital Resources Building
                                    32-38 Ice House Street
                                    Central, Hong Kong

                                    Fax Number:         (852) 2530-1673
                                    Attention:          Jeff Safford
                                                        Chief Financial Officer

18.02      Deemed Delivery. Any notice, demand or other communication so
           addressed to the relevant party shall be deemed to have been
           delivered (a) if given or made by letter, when actually delivered to
           the relevant address; (b) if given or made by telex, when dispatched
           with confirmed answerback and (c) if given or made by fax, when
           dispatched.


19.        GOVERNING LAW AND JURISDICTION

19.01      Law.  This Deed and the rights  and  obligations  of the  parties  
           hereunder  shall be  governed  by and construed in accordance with 
           the laws of England.


                                       10


19.02      Jurisdiction. The Borrower agrees that any legal action or proceeding
           arising out of or relating to this Deed may be brought in the courts
           of England and irrevocably submits to the non-exclusive jurisdiction
           of such courts.

19.03      Process Agent. The Borrower irrevocably appoints Messrs. Rowe & Maw
           (Attention: Mr. Bernd Ratzke) of 20 Blackfriars Lane, London EC4V
           6HT, England as its agent to receive and acknowledge on its behalf
           service of any writ, summons, order, judgment or other notice of
           legal process in England. If for any reason the agent named above (or
           its successor) no longer serves as agent of the Borrower for this
           purpose, the Borrower shall promptly appoint a successor agent
           satisfactory to the Junior Lender and notify the Junior Lender
           thereof, provided that until the Junior Lender receives such
           notification, it shall be entitled to treat the agent named above (or
           its said successor) as the agent of the Borrower for the purposes of
           this Clause 19.03. The Borrower agrees that any such legal process
           shall be sufficiently served on it if delivered to such agent for
           service at its address for the time being in England whether or not
           such agent gives notice thereof to the Borrower.

19.04      No Limitation on Right of Action. Nothing herein shall limit the
           right of the Junior Lender to commence any legal action against the
           Borrower and/or its property in any other jurisdiction or to serve
           process in any manner permitted by law, and the taking of proceedings
           in any jurisdiction shall not preclude the taking of proceedings in
           any other jurisdiction whether concurrently or not.

19.05      Waiver; Final Judgment Conclusive. The Borrower irrevocably and
           unconditionally waives any objection which it may now or hereafter
           have to the choice of England as the venue of any legal action
           arising out of or relating to this Deed. The Borrower also agrees
           that a final judgment against it in any such legal action shall be
           final and conclusive and may be enforced in any other jurisdiction,
           and that a certified or otherwise duly authenticated copy of the
           judgment shall be conclusive evidence of the fact and amount of its
           indebtedness.

19.06      Waiver of Immunity. The Borrower irrevocably waives any immunity to
           which it or its property may at any time be or become entitled,
           whether characterized as sovereign immunity or otherwise, from any
           set-off or legal action in England or elsewhere, including immunity
           from service of process, immunity from jurisdiction of any court or
           tribunal, and immunity of any of its property from attachment prior
           to judgment or from execution of a judgment.


20.        SUBORDINATED SECURITY

           Notwithstanding any other provision to the contrary, this Deed must
           be read and construed in all respects, and the exercise of any rights
           under


                                       11


           this Deed and the enforcement of any rights under this Deed
           must be subject in each case to the terms of the:

           (a)      Senior Subordination Agreement; and

           (b)      Priority Deed.

           In the event of any conflict or inconsistency between the terms of
           this Deed of the one part and the Senior Subordination Agreement or
           the Priority Deed of the other part, the latter documents will
           prevail.


IN WITNESS whereof the parties hereto have executed this Deed on the day and
year first above written.





                                       12

                                   Schedule 1

                                Charged Accounts



Borrower RMB Revenue Account                           018250012407

Borrower Dollar Retention Account                      148250028606

Borrower Special Dividends Account                     148250032607





                                       13



                                   Schedule 2

                       Form of Notice and Acknowledgement



To:  Bank of China, Wuhu Branch


Dear Sirs,


Re:  Account Nos. [                  ]


We give you notice that by a subordinated charge over bank account dated-------
1996 (the 'Charge') we have charged and assigned by way of a third fixed charge
in favour of AES China Holdings Company (L) Limited (the 'Junior Lender') the 
above accounts (the 'Charged Accounts') and a third-priority security interest
in all our right, title, interest and benefit therein and thereto upon the terms
and conditions therein contained. This charge is subordinated and is a third 
ranking security. All the rights of the Junior Lender under this Charge are 
subject to the Senior Subordination Agreement and the Senior Priority Deed.

We enclose a copy of the Charge with this notice. Please note that under the
terms of the Charge, we are not entitled to withdraw any monies from any Charged
Account except in accordance with the terms of the AES Loan Agreement.

Until notice in writing to the contrary is provided by the Security Agent, we
authorize and instruct you from time to time, upon receipt of instructions from
the Security Agent and subject to the Senior Subordination Agreement and the
Priority Deed:

 (a)     to pay to the Security Agent, or as it may direct, any or all monies
         standing to the credit of any Charged Account in accordance with such
         instructions;

 (b)     to disclose to the Security Agent such information relating to any
         Charged Account as the Security Agent may request.

We agree that you shall not be bound to enquire whether the right of the
Security Agent to withdraw any monies from any Charged Account has arisen or be
concerned with the propriety or regularity of the exercise thereof or be
concerned with notice to the contrary or be concerned with or responsible for
the application of any monies received by the Security Agent.

These instructions shall not be revoked or varied without the prior written
consent of the Junior Lender.


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Please acknowledge this notice by signing as indicated and returning to the
Junior Lender the enclosed duplicate of this notice.


Yours faithfully,
For and on behalf of
Wuhu Shaoda Electric Power Development Company Limited




Name:
Title:






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[on duplicate]


To:    Bank of China, Anhui Branch

       on its own behalf and as security agent for the Senior Financing Parties


We acknowledge receipt of the above notice and confirm that we will comply with
the terms thereof.

We agree that we will neither claim to set off to your prejudice any monies
standing to the credit of any Charged Account against any claim we may have
against Wuhu Shaoda Electric Power Development Company Limited howsoever arising
nor exercise or attempt to exercise any right of set-off or consolidation or
combination of accounts or similar right in respect of or in relation to any
Charged Account unless, in each case, at your instructions or with your consent.


Dated:

For and on behalf of
Bank of China, Wuhu Branch




Name:
Title:






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THE BORROWER
- ------------
EXECUTED as and DELIVERED as a Deed           )
by                                            )
WUHU SHAODA ELECTRIC POWER                    )
DEVELOPMENT COMPANY LIMITED                   )
(                           )                 )
acting by its authorized signatory            )
in the presence of: /s/ [SIGNATURE ILLEGIBLE] )

/s/ [SIGNATURE ILLEGIBLE]







THE JUNIOR LENDER
- -----------------
SIGNED for and on behalf of                   )
AES CHINA HOLDINGS                            )
COMPANY (L) LIMITED                           )
by                                            )
in the presence of: /s/ [SIGNATURE ILLEGIBLE] )

/s/ [SIGNATURE ILLEGIBLE]



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