Subordinated Project Contracts Assignment - 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 PROJECT CONTRACTS ASSIGNMENT






                             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.       Assignment of Project Contracts.....................................3
3.       Continuing Security.................................................4
4.       Representations and Warranties......................................4
5.       Undertakings........................................................4
6.       Borrower's Liability................................................5
7.       Events of Default...................................................5
8.       Application of Receipts.............................................6
9.       Taxes and Other Deductions..........................................6
10.      Costs, Charges and Expenses.........................................6
11.      Indemnity...........................................................7
12.      Further Assurance...................................................8
13.      Power of Attorney...................................................8
14.      Suspense Account....................................................8
15.      Waiver and Severability.............................................9
16.      Miscellaneous.......................................................9
17.      Assignment.........................................................10
18.      Notices............................................................11
19.      Governing Law and Jurisdiction.....................................11
20.      Subordinated Security..............................................12



Schedule          Form of Notice............................................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 Chigen Limited Guarantee' means the limited guarantee
                    dated April 22, 1996 issued by AES Chigen in favor of the
                    Borrower;

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

           (d)      'Anhui Liyuan Loan Agreement' means the loan agreement dated
                    April 22, 1996 and made between Anhui Liyuan and the
                    Borrower;

           (e)      'Conversion Agreement' means the agreement dated April 22,
                    1996 and made between the Borrower and the Conversion Bank;


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           (f)      'EPC Contract' means the engineering, procurement and
                    construction services contract dated April 22, 1996 and made
                    between the Borrower and Anhui Power in connection with the
                    Power Plant;

           (g)      'Event of Default' means any event specified as such in
                    Clause 7; and 'prospective Event of Default' means any event
                    with which the giving of notice and/or the passage of time
                    and/or the fulfilment of any other condition would be an
                    Event of Default;

           (h)      'Interconnection Contract' means the contract dated April
                    22, 1996 and made between the Borrower and Anhui Power for
                    the purpose of connecting the Power Plant to the Anhui grid;

           (i)      '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;

           (j)      'Operation and Offtake Contract' means the contract dated
                    April 22, 1996 and made between the Borrower and Anhui Power
                    for the operation of the Power Plant and the sale and
                    purchase of electricity;

           (k)      'Performance Guarantee' means the performance guarantee
                    dated April 22, 1996 issued by East China Power in
                    connection with Anhui Power's obligations under the EPC
                    Contract;

           (l)      'Project Contracts' means the EPC Contract, the Operation
                    and Offtake Agreement, the Interconnection Agreement, the
                    Performance Guarantee, the Anhui Liyuan Loan Agreement, the
                    Wuhu Loan Agreement, the AES Chigen Limited Guarantee and
                    the Conversion Agreement, including all enclosures,
                    amendments and supplements thereto and all benefits thereof
                    including, without limitation:

               (i)  the right to receive any and all moneys due or to become due
                    to the Borrower under or pursuant to the Project  Contracts;
                    
               (ii) all  claims  in  respect  of  any  breach  of  the   Project
                    Contracts;

               (iii)the  right  (but  not the  obligation)  of the  Borrower  to
                    perform and to compel  performance of the Project Contracts;
                    and
               (iv) any right of the Borrower to rescind or otherwise  terminate
                    the Project Contracts; and

          (m)      'Wuhu Loan Agreement' means the loan agreement dated April
                    22, 1996 and made between Wuhu and the Borrower.


                                       2


1.02       Successors and Assigns. The expressions 'Borrower' 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, any Project Contract 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 Schedules are to clauses of and schedules to this
           Deed. Clause headings are inserted for reference only and shall be
           ignored in construing this Deed.


2.         ASSIGNMENT OF PROJECT CONTRACTS

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 assigns and grants to the Junior Lender a third-priority
           security interest in absolutely all the Borrower's right, title,
           interest and benefit in and to the Project Contracts upon the terms
           herein set out 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
           ASSIGNMENT IS SUBORDINATE IN RIGHT TO THE CHARGES CREATED TO SECURE
           THE OBLIGATIONS OF THE BORROWER UNDER THE SENIOR LOAN AGREEMENT, AND
           THE ENFORCEMENT OF THIS ASSIGNMENT SHALL BE LIMITED IN ACCORDANCE
           WITH THE PROVISIONS OF THE SENIOR SUBORDINATION AGREEMENT AND THE
           PRIORITY DEED.

2.02       Notice. The Borrower will, forthwith upon the execution of this Deed,
           give notice of the assignment herein contained to and obtain an
           acknowledgment from each of the other parties to the Project
           Contracts in

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           the form set out in the Schedule or, if not in that
           form, in a form satisfactory to the Junior Lender.

2.03       Dealing with Parties. Notwithstanding the assignment herein contained
           but otherwise subject to the terms of this Deed, the Junior Lender
           hereby authorizes the Borrower to continue to deal with the other
           parties to the Project Contracts in relation to the Project Contracts
           as if the Borrower remained solely entitled to all the rights, title,
           interest and benefits thereunder but, save as herein provided, not
           directly to waive, amend, vary or otherwise modify any provision of
           any Project Contract, provided that if an Event of Default or
           prospective Event of Default occurs the foregoing authority shall
           immediately cease to have effect.


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       Representation and Warranty. Except for the relevant Charges created
           under this Deed and to secure the obligations of the Borrower under
           the Senior Loan Agreement and the CPIL Security, the Borrower hereby
           represents and warrants to the Junior Lender that no Charge exists,
           and the Borrower has not created or agreed to create any Charge over,
           all or any of its rights, title and interest in and to the Project
           Contracts other than rights arising by operation of law.

4.02       Continuing Representation and Warranty. The Borrower also represents
           and warrants to and undertakes with the Junior Lender that the
           foregoing representation and warranty will be true and accurate
           throughout the continuance of this Deed with reference to the facts
           and circumstances existing 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, unless the Junior Lender otherwise agrees in writing:


                                       4


           (a)      take all steps which may be necessary or expedient to keep
                    the Project Contracts in full force and effect and protect
                    the interests of the Borrower and the Junior Lender therein
                    and shall do or permit to be done every act or thing which
                    the Junior Lender may from time to time require for the
                    purpose of enforcing the rights of the Junior Lender
                    hereunder;

           (b)      not waive, release, settle, compromise or abandon any claim
                    or the liability of any person under the Project Contracts
                    or do or omit to do any other act or thing whereby the
                    recovery in full of any moneys payable thereunder as and
                    when they become payable may be impeded;

           (c)      not amend, vary or otherwise modify any provision of any
                    Project Contract;

           (d)      except for the relevant Charges created under this Deed and
                    to secure the obligations of the Borrower under the Senior
                    Loan Agreement and the CPIL Security, not hereafter create
                    or agree to create or permit to arise or exist any Charge
                    over the Project Contracts; and

           (e)      provide to the Junior Lender copies of all material notices
                    and material documents issued by the other parties to the
                    Project Contracts relating to the Project Contracts
                    forthwith upon the Borrower receiving the same.


6.         BORROWER'S LIABILITY

           Notwithstanding the assignment herein contained, the Borrower shall
           remain liable to observe and perform all the obligations assumed by
           it in relation to the Project Contracts and the Junior Lender shall
           have no obligation or liability thereunder. The Junior Lender shall
           not be obliged to make any enquiry as to the nature or sufficiency of
           any payment received by it or to make any claim or take any other
           action to collect any moneys or to enforce any rights and benefits
           hereby assigned.


7.         EVENTS OF DEFAULT

           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;

           (b)      the Borrower purports or attempts to create any Charge over
                    all or any part of the Project Contracts or any third party
                    asserts a claim

                                       5
 


                    (other than a frivolous or vexatious claim)
                    in respect thereof unless contested in good faith and
                    through appropriate means; and

           (c)      the security hereby created or any part thereof fails or
                    ceases for any reason to be in full force and effect or is
                    terminated or jeopardized or becomes invalid or
                    unenforceable or if there is any dispute regarding the same
                    or if there is any purported termination of the same or it
                    becomes impossible or unlawful for the Borrower to perform
                    any of its obligations hereunder or for the Junior Lender to
                    exercise all or any of its rights, powers and remedies
                    hereunder.


8.         APPLICATION OF RECEIPTS

           After the occurrence of an Event of Default, all monies received by
           the Junior Lender hereunder may be applied in or towards satisfaction
           of the Junior Secured Indebtedness in such manner as is provided for
           in the AES Loan Agreement and subject to the provisions of the Senior
           Subordination Agreement and the Priority Deed.


9.         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.


10.        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


                                       6


           (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 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.


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 may be 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, on
           the part of the Borrower, relating in any way whatsoever to the
           Project Contracts.

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 an 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.


                                       7


12.        FURTHER ASSURANCE

12.01      Further Assurance. Subject to the Senior Subordination Agreement and
           the Priority Deed, 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
           Project Contracts 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 the Junior Lender's Rights. 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.


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.


                                       8


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
                    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;

           (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 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


                                       9

                                                  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; or

           (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.


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 their rights under this Deed in
           accordance with the provisions of clause 20 of the AES Loan
           Agreement.



                                       10


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.

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 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

                                       11


           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 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.


                                       12


           In the event of any conflict or inconsistency between the terms of
           this Deed of the one part and the Senior Subordinated 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.








                                       13


                                    Schedule

                                 Form of Notice


To:        [                           ]



                                                                       [Date]


Dear Sirs,

Re:                 [Name of Contract(s)]


We hereby give you notice that by an assignment dated -----------1996 we have 
assigned and granted to AES China Holdings Company (L) Limited (the 'Junior 
Lender') a third-priority security interest in all our rights, title and 
interest in and to the above [name of Contract(s)] and all benefits and proceeds
thereof.

We hereby instruct you that upon receiving written notice from the Junior
Lender, all payments which you may be required to make under the [name of
Contract(s)] are to be made directly to the Junior Lender. Until such notice is
received, you shall make all such payments in accordance with the terms of the
[name of Contract(s)].

In all other respects, and until you receive written notice to the contrary from
the Junior Lender, you shall continue to deal with us in respect of the above
[name of Contract(s)], save that no waiver shall be given and no amendment,
variation or other modification shall occur with respect to any provision of any
Project Contracts without the consent of the Junior Lender.

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




                                       14


[on duplicate:]

To:                 [                               ]


We acknowledge receipt of the above notice.

We confirm that we consent to the assignment referred to above, that we have no
notice of any existing Charge over the [name of Contract(s)] and that we will
comply with the terms of the above notice.

Dated:





Authorized Signature(s)
[                         ]







                                       15

THE BORROWER
- ------------
EXECUTED and DELIVERED                       )
for and on behalf of                         )
WUHU SHAODA ELECTRIC POWER                   )
DEVELOPMENT COMPANY LIMITED                  )
by                                           )
in the presence of: [SIGNATURE ILLEGIBLE]    )

[SIGNATURE ILLEGIBLE]




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

[SIGNATURE ILLEGIBLE]




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