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Published: 2008-03-26

Hefei Zhongli Energy Company Ltd. Cooperative Joint Venture Contract - Anhui Liyuan Electric Power Development Co. Ltd., Hefei Municipal Construction and Investment Co. and AES Anhui Power Company Ltd.



 Information contained herein, marked with [***], is being filed pursuant to a
                      request for confidential treatment.




             ANHUI LIYUAN ELECTRIC POWER DEVELOPMENT COMPANY LIMITED


                                       AND


               HEFEI MUNICIPAL CONSTRUCTION AND INVESTMENT COMPANY


                                       AND


                          AES ANHUI POWER COMPANY LTD.



                       COOPERATIVE JOINT VENTURE CONTRACT



                            FOR THE ESTABLISHMENT OF



                        HEFEI ZHONGLI ENERGY COMPANY LTD.







                                TABLE OF CONTENTS
                                                                                        PAGE
                                                                                        ----
                                                                                    
ARTICLE 1.          GENERAL PROVISIONS...............................................     3

ARTICLE 2.          DEFINITIONS......................................................     3

ARTICLE 3.          PARTIES TO THIS CONTRACT.........................................     5

ARTICLE 4.          ESTABLISHMENT OF THE COMPANY.....................................     6

ARTICLE 5.          PURPOSE, SCOPE AND SCALE OF THE COMPANY..........................     7

ARTICLE 6.          TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL................     7

ARTICLE 7.          ANNUAL CAPITAL RETURN............................................    12

ARTICLE 8.          RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES..................    12

ARTICLE 9.          BOARD OF DIRECTORS...............................................    15

ARTICLE 10.         MANAGEMENT ORGANIZATION..........................................    18

ARTICLE 11.         SITE.............................................................    18

ARTICLE 12.         SALE OF ELECTRICITY..............................................    19

ARTICLE 13.         CONSTRUCTION.....................................................    19

ARTICLE 14.         OPERATION AND MAINTENANCE OF THE POWER PLANT.....................    19

ARTICLE 15.         LABOR MANAGEMENT.................................................    20

ARTICLE 16.         FINANCIAL AFFAIRS AND ACCOUNTING.................................    20

ARTICLE 17.         TAXATION AND INSURANCE...........................................    23

ARTICLE 18.         JOINT VENTURE TERM...............................................    24

ARTICLE 20.         TERMINATION AND LIQUIDATION......................................    24

ARTICLE 21.         FORCE MAJEURE....................................................    26

ARTICLE 22.         SETTLEMENT OF DISPUTES...........................................    28

ARTICLE 23.         APPLICABLE LAW...................................................    29

ARTICLE 24.         MISCELLANEOUS PROVISIONS.........................................    30


APPENDIX 1.  THE PROJECTED RETURN ON EQUITY PRINCIPAL OF THE PARTIES OVER THE YEARS..    33






                       COOPERATIVE JOINT VENTURE CONTRACT


ARTICLE 1.        GENERAL PROVISIONS

This Contract is made in Hefei city,  Anhui province,  the People's  Republic of
China on this 18th day of March,  1996 by and among Anhui Liyuan  Electric Power
Development Company Ltd. (hereinafter referred to as Party 'A'), Hefei Municipal
Construction and Investment Company  (hereinafter  referred to as Party 'B') and
AES Anhui Power  Company  Ltd.(hereinafter  referred  to as Party 'C').  Each of
Party A, Party B and Party C shall hereinafter  individually be referred to as a
'Party' and collectively as the 'Parties'.

After  friendly  consultations  conducted in accordance  with the  principles of
equality  and  mutual  benefit,  the  Parties  have  agreed to  establish  Anhui
Liyuan-AES   Power  Company  Ltd.,  a  cooperative   joint  venture   enterprise
(hereinafter  referred to as the  'Company') in  accordance  with the law of the
People's Republic of China on Sino-Foreign Cooperative Joint Venture Enterprises
(hereinafter  referred to as the  'Cooperative  Joint Venture Law'),  the Law of
Corporation  of  the  People's  Republic  of  China,  other  relevant  laws  and
regulations,  and the  provisions of this Contract.  Therefore,  the creation of
this Contract.


ARTICLE 2.        DEFINITIONS

2.01      Definitions

For purposes of this Joint Venture  Contract,  the  capitalized  terms set forth
below shall have the following corresponding meanings:


1)   'CONTRACT'   means  the   cooperative   joint  venture   contract  for  the
     establishment and operation of the Hefei Zhongli Energy Company Ltd..

2)   'ARTICLES OF  ASSOCIATION'  means the  Company's  Articles of  Association,
     signed by the Parities,  approved by the  Company's  Board of Directors and
     the examining and approving  authority,  as amended when necessary with the
     approval from the Board of Directors.

3)   'COMPANY'  means the Hefei  Zhongli  Energy  Company  Ltd., a  Sino-foreign
     cooperative joint venture enterprise established by the Parties pursuant to
     this Contract.

4)   'BUSINESS  LICENSE' means the business license issued to the Company by the
     local branch of the State Administration for Industry and Commence.

5)   'JOINT  VENTURE  TERM'  means the term of the Joint  Venture  as defined in
     Article 18 of this Contract.

6)   'BOARD' or 'BOARD OF DIRECTORS' means the highest  authority of the Company
     established  in accordance  with the  provisions  set forth in Article 9 of
     this Contract.

7)   'CHAIRMAN'  or 'CHAIRMAN OF THE BOARD OF  DIRECTORS'  means the Chairman of
     the Company's Board of Directors  appointed in accordance with Article 9 of
     this Contract.

8)   'VICE-CHAIRMAN'  means  vice-chairman  of the Company's  Board of Directors
     appointed in accordance with Article 9 of this Contract.

9)   'DIRECTOR(S)' means member(s) of the Company's Board of Directors appointed
     in accordance with Article 9 of this Contract.

10)  'GENERAL  MANAGER'  means the General  Manager of the Company  appointed in
     accordance with Article 10 of this Contract.

11)  'DEPUTY GENERAL  MANAGER(S)' means the Deputy General Manager(s)  appointed
     in accordance with Article 10 of this Contract.

12)  'POWER  PLANT' means the entire  facility and later  extension  hereto of a
     50MW  class  gas-steam  combined  cycle  generating  set  and  its  control
     equipment and all common services,  ancillary  equipment,  facility and the
     site.

13)  'SITE' means the land in Hefei City,  Anhui Province,  China upon which the
     Company's  Power Plant facility and all required  auxiliary  facilities are
     located.

14)  'COMMENCEMENT  OF OPERATION'  means the date of  commencement of commercial
     operation  of the Power  Plant as  defined  in the  Operation  and  Offtake
     Contract  executed  between the Company and the Anhui  Provincial  Electric
     Power Company.

15)  'EPC CONTRACT' means the fixed price, fixed schedule, fixed scope and fixed
     quality construction contract for the design, construction,  completion and
     commissioning of the Power Plant.

16)  'INTERCONNECTION  AGREEMENT' means the  interconnection  agreement  entered
     into by and between the Company  and the Anhui  Provincial  Electric  Power
     Company.

17)  'DESPATCH  AGREEMENT' means the electric power despatch  agreement  entered
     into between the company and the Anhui Provincial Electric Power Company.

18)  'OPERATION  AND OFFTAKE  CONTRACT'  means the long-term  electricity  sales
     contract  entered  into  between  the Company  and Anhui  Provincial  Power
     Company which is entrusted by the former to operation,  maintenance, repair
     and management of the Power Plant.

19)  'BANK  SUPERVISION  AGREEMENT'  means an agreement  between the Company and
     bank within  China for  supervising  each Party's  distributable  profit as
     defined in Article 16.06

20)  'LOAN CONTRACTS' means contracts to be entered into and between the Company
     and domestic financial  institutions and the overseas institutions arranged
     by Party C to provide loans to the Company in accordance  with Article 6.03
     hereof.

21)  'EXAMINING AND APPROVING AUTHORITY' means the Ministry of Foreign Trade and
     Economic  Cooperation  of the People's  Republic of China or its authorized
     organization.

22)  'AFFILIATE'  means  any  company  through  ownership  of  voting  stock  or
     otherwise,  directly or  indirectly,  controlling or controlled by a Party,
     the term 'control'  being used in the sense of power to elect  directors or
     to direct the operation and management of a company.

23)  'OWNER'S  ENGINEER'  means a qualified  engineering  firm  appointed by the
     Company to supervise the execution of the work contracted for under the EPC
     Contract.

24)  'THIRD  PARTY'  means any party or parties  other than the  Parties to this
     Contract.

25)  'CHINA' means the People's Republic of China

26)  'RMB' means the lawful currency of the People's Republic of China.

27)  'USD' or 'US$' means the lawful currency of the United States of America.


ARTICLE 3.        PARTIES TO THIS CONTRACT

3.01     The Parties to this Contract are:

         (a) Party A, Anhui Liyuan Electric Power Development Company Limited, a
         state-owned  enterprise,  set up in  accordance  with  Chinese  law and
         registered in Anhui province, China, with its legal address at:
         No. 415 Wuhu Road, Hefei, Anhui Province, China.

                  Legal Representative of Party A:

                  Name:                     Cheng Guangjie
                  Position:                 Chairman
                  Nationality:              Chinese

         (b) Party B, Hefei Municipal  Construction  and Investment  Company,  a
         state-owned  enterprise,  set up in  accordance  with  Chinese  law and
         registered in Hefei City, Anhui Province, China, with its legal address
         at: No. 186 Suzhou Road, Hefei, Anhui Province, China.

                  Legal Representative of Party B:

                  Name:                     Shen Dequan
                  Position:                 General manager.
                  Nationality:              Chinese

         (c) Party C, AES Anhui  Power  Company  Ltd,  a company  registered  in
         British  Virgin  Islands with its legal address at: 9/F allied  Capital
         Resources Building, 32-38 Ice House Street, Central, Hong Kong

                  Legal Representative of Party C:

                  Name:                     Paul T. Hanrahan
                  Position:                 President
                  Nationality:              U.S.A.


ARTICLE 4.        ESTABLISHMENT OF THE COMPANY

4.01     Establishment Of The Company

         The Parties  hereby agree to establish the Company in  accordance  with
         the Sino-Foreign Cooperative Joint Venture Law, the Corporation Law and
         other relevant laws and  regulations of the People's  Republic of China
         and with the provisions of this Contract.

4.02     Name and Address of the Company

         (a) The Chinese name of the Company shall be '[Chinese text]',  and its
         English name is 'Hefie zhongli Energy Company Ltd.'

         (b) The legal  address  of the  Company  shall be:  No.  415 Wuhu Road,
         Hefei, Anhui Province, China

4.03     Form of Organization of the Company

         The form of  organization  of the Company shall be a limited  liability
         Company.  Creditors of the Company  shall have  recourse  solely to the
         assets of the Company and not to the assets of the individual  Parties.
         Expect as otherwise provided herein,  once a Party has paid in full its
         contribution to the registered capital of the company and to provide or
         arrange  loans in  accordance  with  this  Contract,  it  shall  not be
         required to provide any further funds to or on behalf of the Company by
         way of capital contribution, loan, advance, guarantee or otherwise. The
         Company  shall  indemnify  the Parties  against any losses,  damages or
         liabilities   in  respect  of  any  third  party  arising  out  of  the
         department,  construction  and  operation  of the  Power  Plant and the
         operation of the Company. Subject to the aforementioned  responsibility
         limitations,  all Parties to this Contract shall share risks and losses
         incurred by the Company  within the limits of its  respective  share in
         registered capital contribution.

4.04     Laws and Decrees

         The Company is an economic entity  established  pursuant to the laws of
         the People's  Republic of China. The Company has the legal status of an
         independent legal person. The business  activities of the Company shall
         be governed and protected by the laws,  decrees and relevant  rules and
         regulations of China.

ARTICLE 5.        PURPOSE, SCOPE AND SCALE OF THE COMPANY

5.01     Purpose of the Company

         The Company's  purpose is to build, own and operate the Power Plant, to
         sell  electric  power to the grid and to achieve a projected  return on
         investment for the Parties.

5.02     Operation Scope of the Company

         The operation scope of the Company is to generate electricity,  to sell
         it to the grid and to take charge of repair and maintenance services of
         the Power Plant.

5.03     Construction Scale

         The Company shall  construct  1x50 MW Class  gas-steam  combined  cycle
         generating facility and its auxiliary facilities.

ARTICLE 6.        TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL

6.01     Total Investment

         The total  amount of  investment  required by the Company is  presently
         estimated  to be  US$29.98  million.  Any  increase  in the  registered
         capital must be first agreed to by the Parties and unanimously approved
         by the  Board of  Directors  before  being  submitted  to the  relevant
         authorized Examination and Approval Authority for approval. Increase in
         registered  capital will be met by the Parties in  proportion  to their
         existing interest in the Company's registered capital.

6.02     Registered Capital

         The total registered capital of the Company shall be US$15 million.

6.03     Financing

         The  financing  for the balance  between the total  investment  and the
         registered   capital   shall  be  arranged  by  Party  A  and  Party  C
         respectively.  Party C shall undertake financing  responsibility of not
         exceeding  the  maximum  amount  of US$8  million.  All the rest of the
         financing  needed by the  Project  shall be raised by Party A. The term
         and  conditions  for  financing  shall be provided for in detail in the
         loan contract.

6.04     Contributions of Registered Capital

         (a) Party A's Contribution to the Registered Capital: Party A agrees to
         contribute  an  amount  of  RMB  equivalent  to  US$3  million  to  the
         registered   capital  of  the  Company  which  represents  30%  of  the
         registered capital of the Company.  The value of Party A's contribution
         in RMB shall be calculated at the medium price of the USD/RMB  exchange
         rate as  announced  by the  People's  Bank of  China  on the  date  the
         contribution is made.

         (b) Party B's Contribution to the Registered Capital: Party B agrees to
         contribute  an  amount  of RMB  equivalent  to  US$1.5  million  to the
         registered   capital  of  the  Company  which  represents  10%  of  the
         registered capital of the Company.  The value of Party B's contribution
         in RMB shall be calculated at the medium price of the USD/RMB  exchange
         rate as  announced  by the  People's  Bank of  China  on the  date  the
         contribution is made.

         (c) Party C's Contribution to the Registered Capital: Party C agrees to
         contributed an amount of US$10.5  million to the registered  capital of
         the  Company  which  represents  70% of the  registered  capital of the
         Company.

6.05     Payment of Registered Capital and Conditions Precedent Thereto

         Each  Party  agrees to make  their  first  contribution  of  registered
         capital to the  Company  which  shall not be less than 15% of the total
         amount of their respective  portions of registered capital share within
         thirty (30) days after satisfaction of the conditions  precedent listed
         below. The second registered  capital  contribution  (namely 85% of the
         total registered  capital) shall be made in full several times within a
         year after  obtaining  the copy of the  business  license.  The Parties
         agree to hold a meeting of the Board of  Directors  as soon as possible
         after  receiving  the  Business  License of the  Company to execute the
         Contracts  listed in Article 4 and decide on a schedule for the balance
         of the registered  capital in accordance with relevant  regulations and
         construction needs.

         Conditions precedent to payment of registered capital are:

         (a) The company and the Project has  obtained  all  necessary  relevant
         government approvals.

         (b)  Issuance of  Approval by the  examining  and  approving  authority
         approving this Contract and Articles of Association of the Company.

         (c) Issuance of a duplicate of the  Company's  Business  License by the
         local branch of the State  Administration  for Industry and commence of
         China;

         (d) Local  Exchange  Control  Bureau's  agreement  to issuing a support
         letter to arrange  the  conversion  of RMB into  foreign  currency on a
         priority  basis  and to  approval  of the  Company  access  to  foreign
         exchange trading centre to convert foreign currencies so as to meet the
         Company's needs for foreign currency.

         (e) Execution and approval of the Operation and Offtake  Contract,  the
         Loan Contracts,  the EPC Contract, the Bank Supervision Agreement,  the
         Interconnection  Agreement, the Dispatch Agreement and other agreements
         related to this  Contract.  The  approval  shall be  obtained  from all
         Chinese Government authorizes required to approve these contracts.

         (f)  Opening a bank  account  with a  relevant  bank in the name of the
         company;

         (g)  Anhui  Provincial  Pricing  Bureau,  pursuant  to  relevant  state
         policies,  has granted its approval to the estimated initial tariff and
         the  principle of the tariff  adjustment as stipulated in the Operation
         and Offtake Contract. This principle, once approved, shall be valid for
         the entire term of this Contract unanimously.

         (h) The Company has obtained relevant  certificate to lawful use of the
         Site in accordance with the provisions of the laws of China.

         (i) The  support  letter in respect  of the  Company  and this  project
         issued by Anhui Provincial government.

         (j)  Obtaining  a legal  opinion  from  attorney to the effect that the
         Company has obtained all required  approvals and that all the Contracts
         listed in Article 6.05(e) are legal, effective and enforceable.

         (k) Approval by each Party's Board of Directors  authorizing each Party
         to execute this Contract.

         Each of the Parties shall be satisfied the conditions precedent. In the
         event any of the  conditions  have not been met  ninety  days after the
         Company has been issued the  Business  License,  and the Parties do not
         agree in writing to waive such conditions  precedent or extend the time
         for their fulfillment, any Party shall have the right to terminate this
         Contract, should any Party terminate this Contract, no Party shall have
         the right to require  that party to made  further  contribution  to the
         registered  capital  nor shall  any  Party  have the right to claim any
         damage from that party.

         If  within  thirty  (30)  days  after  satisfaction  of the  conditions
         precedent,  any Party has not made its  contribution  to the registered
         capital  of  the  company,  or  fails  to  make  its  contributions  in
         accordance  with the schedule  approved by the Board of Directors,  the
         party or  Parties  failing to make such  contribution  shall be changed
         with a penalty  equal to 0.05% of the  delinquent  part of payment on a
         daily basis, from the date of the scheduled contribution until the date
         of  the  actual  contribution,  and  shall  be in  default  under  this
         contract.

6.06     Drawdown of Loans

         The Loans shall be deposited on time to the bank account of the Company
         in  accordance  with the  financial  arrangements  of the  construction
         schedule.  The  specific  dates  shall  be set in the  Loan  Contracts.
         Failure to make  payments on time shall be treated in  accordance  with
         the provisions of the Loan Contracts.

         In case of financing  requirement,  the Company establish a RMB reserve
         account so as to ensure the repayment of loans.

6.07     Investment Certificate

         After  any Party has made its  contribution  in full to the  registered
         capital,  an  accounting  firm  registered  in China  shall  verify the
         contribution and issue a contribution  verification report.  Thereupon,
         an investment  certificate  signed by the Chairman and Vice-Chairman of
         the Board shall be issued to such Party by the Company.

6.08     Assignment and security of Registered Capital and Ownership Interest

         (a) Approval of the Board of Directors and Right of First Refusal:  Any
         Party to this  Contract may assign,  sell or otherwise  transfer all or
         part  of its  ownership  interest  in the  Company  (such  Party  being
         hereinafter referred to as 'the Transferring Party') to any Third Party
         (hereinafter  referred to as 'the Transferee'),  provided such transfer
         gets a unanimous approval from the Board of Directors.  Meanwhile, such
         transfer  will be allowed  provided  the other  Parties have a right of
         first refusal to purchase the  ownership  interest in the Company being
         transferred  under the same terms and  conditions  agreed  between  the
         Transferring  Party and the Transferee.  The  Transferring  Party shall
         notify the other parties in writing of the terms and  conditions of the
         transfer.  If the other  Parties do not  exercise  their right of first
         refusal within thirty (30) days after receipt of such notice, they will
         be deemed to have consented to the transfer. The Transferring Party may
         then  transfer  its  ownership  interest  in the Company  provided  the
         Transferee  executes  a  document  by which it  becomes a Party to this
         Contract and expressly  assumes the  Transferring  party's  obligations
         herein.

         The requirement for unanimous approval by the Board of Directors do not
         apply if a Party is  assigning  its  rights to  distributions  from the
         Company as  security  to obtain  loans for itself or an  affiliate  nor
         shall the Company take any collateral responsibility for it. If a Party
         is assigning,  selling or otherwise transferring all or any part of its
         rights,  title and  ownership  interest in the Company to an Affiliate,
         the right of first refusal shall not apply.

         (b) Government Approval:  The sale or assignment shall become effective
         only after the approval in received.  Upon receipt of the approval from
         such Examining and Approving Authority,  the Company shall register the
         change in ownership  with the local branch of the state  Administration
         for Industry and Commence.

         (c) Subject to the connect of Creditors and after going through China's
         applicable legal proceedings,  the Parties agree to mortgage and pledge
         the Company's  assets and ownership rights of the Contract to Creditors
         in Accordance with financing requirements in order to obtain loans.

6.09     Increase of Registered Capital

         Any increase in the  registered  capital must be first agreed to by the
         Parties and unanimously approval by the Board of Directors before being
         submitted to the original  Examining  and  Approving  Authority of this
         Contract for approval.  In principle,  increases in registered  capital
         will  be met by the  Parties  in  proportion  to  their  then  existing
         ownership interest in the Company's  registered capital.  Upon approval
         by such Examining and Approving  Authority,  the Company shall register
         the increase in  registered  capital with the local branch of the State
         Administration for Industry and Commence.

6.10     Failure to Make Registered Capital Contributions

         In  the  event  any  Party  fails  to  make  its   registered   capital
         contribution  or any  portion  thereof as  provided  herein or fails to
         provide its share of any increase in the Company's  registered  capital
         as  described  in Article  6.09  above,  then in  addition to any other
         rights the Company may have against the  defaulting  Party as described
         in Article 6.05, the Company shall offer such  unsubscribed  portion of
         registered  capital to the non-defaulting  Parties.  The non-defaulting
         Parties will be offered the unpaid portion of the  defaulting  Party in
         proportion to each Party's registered capital contribution. Such change
         in each Party's  investment ratio and transfer in ownership interest of
         registered  capital as described in this paragraph  shall be subject to
         the approval of the Examining and Approving Authority of this contract.


ARTICLE 7.        ANNUAL CAPITAL RETURN

7.01 The  investment  return rate for the Parties is  calculated on the basis of
the Power Plant operating at full load with an annual equivalent  operation hour
of [***] hours. After all taxes and contributions to required funds according to
relevant  regulations are paid, the USD financial internal Return Rate (FIRR) on
equity for the Parties shall be [***].  Based on an annual  equivalent full load
operation hour of [***] hours and an FIRR of [***],  the annual capital  returns
of the Parties calculated in USD are calculated and listed in Appendix 1.

[***] Filed separately with the Commission pursuant to a request for 
confidential treatment.

7.02 In the  event  that the  annual  equivalent  full load of  operating  hours
exceeds  [***]  hours,  the  exceed  net  profit  will be met by the  Parties in
proportion to their existing interest in the Company's registered capital.

[***] Filed separately with the Commission pursuant to a request for 
confidential treatment.


ARTICLE 8.        RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES

8.01     Responsibilities and Obligations of Party A

         In addition to other  obligations  under this  Contract,  Party A shall
         have the following responsibilities:

         (a) Be responsible for obtaining all necessary  approvals,  permits and
         licenses for the  establishment  of the Company and have the obligation
         to use its best efforts to obtain all  necessary  approvals and permits
         for the ongoing operation of the Company,  including but not limited to
         assisting  the  Company in  obtaining  approval  from Anhui  Provincial
         Pricing Bureau in connection with the estimated  initial tariff and the
         principle of tariff  adjustment  as  stipulated  in the  Operation  and
         Offtake Contract;

         (b)  Assist  the   Company  in   conducting   negotiations   with  land
         administration  authority and other  relevant  government  authority in
         connection  with the  Company's  use of the site and assist in handling
         all necessary formalities so as to ensure the Company's use of the site
         in  accordance  with its scope of  business  during  the  entire  joint
         venture term (including the extension of the term thereafter);

         (c)  Assist  the  Company  in  obtaining  all  infrastructure   needed,
         including external water supply,  power supply,  fuel,  transportation,
         communications  and  other  services  on the most  favorable  terms and
         conditions available;

         (d) Assist the Company in applying for  preferential  tax treatment and
         other  investment   incentives  available  under  applicable  laws  and
         regulations;  (e) Assist the Company in obtaining  necessary  approvals
         for  importing raw  materials  and  machinery  equipment,  in importing
         machinery equipment, fuel, materials,  supplies and office equipment on
         preferential  terms,  in procuring  import  licenses,  in  facilitating
         customs  formalities  and in arranging for  transportation  of imported
         equipment and materials between Chinese ports and the site;

         (f) Assist the  Company's  expatriates  to obtain all  necessary  entry
         visas and work permits;

         (g)  Assist  the  Company  in opening  RMB and  foreign  currency  bank
         accounts as well as loan reserve account;  assist the Company to obtain
         necessary  approvals to utilize various methods permitted under Chinese
         laws to balance its foreign  exchange  as needed,  including  assisting
         Party C to convert its capital  returns into US dollars for  remittance
         overseas;

         (h) Arrange financings for the Company pursuant to relevant  provisions
         of this  Contract and assist the Company in obtaining  working  capital
         loans in business operation;

         (i) Be responsible for drafting  feasibility  study report of the Power
         Plant, submitting necessary engineering and technical documents for the
         proposal and examination and approval of the project;

         (j)  Facilitate  the execution of the  Operation  and Offtake  Contract
         between the Anhui  Provincial  Electric  Power Company and the Company,
         ensure to purchase yearly minimum  Offtake  electricity and ensure safe
         and stable  generation  of  electricity  in  accordance  with  designed
         capability  during the term of the joint venture and their adherence to
         the obligations thereunder;

         (k) Handle other reasonable  matters entrusted from time to time by the
         Company.

8.02     Responsibilities and Obligations of Party B

         In addition to its other obligations under this Contract, Party B shall
         have the following responsibilities.

         (a) Be responsible for obtaining all necessary  approvals,  permits and
         licenses for the  establishment  of the Company and have the obligation
         to use its best efforts to obtain all  necessary  approvals and permits
         for the ongoing operation of the Company,  including but not limited to
         assisting  the  Company in  obtaining  approval  from Anhui  Provincial
         Pricing Bureau in connection with the estimated  initial tariff and the
         principle of tariff  adjustment  as  stipulated  in the  Operation  and
         Offtake Contract;

         (b)  Assist  the   Company  in   conducting   negotiations   with  land
         administration  authority and other  relevant  government  authority in
         connection  with the  Company's  use of the Site and assist in handling
         all necessary formalities so as to ensure the Company's use of the Site
         in  accordance  with its scope of  business  during  the  entire  joint
         venture term (including the extension of the term thereafter);

         (c)  Assist  the  Company  in  obtaining  all  infrastructure   needed,
         including external water supply,  power supply,  fuel,  transportation,
         communications  and  other  services  on the most  favorable  terms and
         conditions available;

         (d) Assist the Company in applying for  preferential  tax treatment and
         other  investment   incentives  available  under  applicable  laws  and
         regulations;

         (e) Assist the Company in obtaining  necessary  approvals for importing
         raw  materials  and  machinery   equipment,   in  importing   machinery
         equipment,   fuel,   materials,   supplies  and  office   equipment  on
         preferential  terms,  in procuring  import  licenses,  in  facilitating
         customs  formalities  and in arranging for  transportation  of imported
         equipment and materials between Chinese ports and the Site;

         (f) Assist the  Company's  expatriates  to obtain all  necessary  entry
         visas and work permits;

         (g)  Assist  the  Company  in opening  RMB and  foreign  currency  bank
         accounts as well as loan reserve account;  assist the Company to obtain
         necessary  approvals to utilize various methods permitted under Chinese
         laws to balance its foreign  exchange  as needed,  including  assisting
         Party C to convert its capital  returns into US dollars for  remittance
         overseas;

         (h) Assist the Company in obtaining  working  capital loans in business
         operation;

         (i) Handle other reasonable  matters entrusted from time to time by the
         Company.

8.03     Responsibilities and Obligations of Party C

         In addition to its other obligations under this Contract, Party C shall
         have the following responsibilities.

         (a) Assist the Company in purchasing equipment,  supplies and materials
         inside or outside China to ensure that they are of the proper  quantity
         and quality;

         (b) Introduce  modern  management  techniques and financial  management
         expertise to the Company;

         (c) Assist the Company staff and  representatives  in arranging foreign
         visas  for  overseas   training  as  required  for  the  operation  and
         management of the Power Plant;

         (d) Assist the Company in recruiting qualified expatriate personnel and
         international consultants as required by the Company;

         (e) Arrange  financing for the Company pursuant to relevant  provisions
         hereof;

         (f) Handle other reasonable  matters entrusted from time to time by the
         Company.


ARTICLE 9.        BOARD OF DIRECTORS

9.01     Formation of the Board

         (a)  The  Board  of  Directors  shall  be  established  on the  date of
         registration of the Company.

         (b) The Board  shall  consist  of seven  (7)  Directors  including  the
         Chairman of the Board,  two (2) of whom shall be  appointed by Party A,
         one (1) by Party B and four (4) by Party C. At the time  this  Contract
         is executed and at any time a Director is  appointed  or removed,  each
         Party shall send  written  notice to the other  Parties of the names of
         its appointed or removed Directors.

         (c) In general,  each  Director  shall be appointed for a term of three
         (3)  years  and may  serve  consecutive  terms  if  reappointed  by the
         original appointing Party. Each Director shall serve and may be removed
         by the Party  who  appointed  that  Director.  In the event a  Director
         vacates the Board through retirement,  resignation, illness, disability
         or  death,  or in the  event a  Director  is  removed  by the  original
         appointing  Party that Party may appoint a  successor  to serve out the
         departing Director's remaining term.

         (d) Directors will serve without remuneration, but all reasonable costs
         incurred by the Directors in  performance of their duties as members of
         the Board will be borne by the Company.

         (e) Each Director may concurrently be appointed by the Board as General
         Manager or Deputy General  Manager.  When a Director is  concurrently a
         managerial  staff  of the  Company,  he may only  carry  on  day-to-day
         managerial  activities  of the  company  in  the  capacity  of  General
         Manager,  Deputy  General  Manager,  and may not  exercise his director
         functions in dealing with day-to-day managerial activities.

         (f) The  Chairman of the Board shall be  appointed by Party A. He shall
         be the legal  representative  of the  Company,  and will  exercise  his
         authority  within the limits  prescribe by the Board and in  compliance
         with the  Sino-Foreign  Cooperative  Enterprise  Law and its  Rules for
         Implementation  and the Corporation Law of P.R. China. He may not under
         any circumstance  contractually  bind the Company or otherwise take any
         action on behalf of the Company  without  prior  approval of the Board.
         Whenever he is unable to perform his  responsibilities  for any reason,
         one Vice Chairman may be designated by him or the Board to  temporarily
         assume his duties until he is able to resume his duties.

         (g) There shall be two Vice Chairmen,  one appointed by Party B and the
         other appointed by Party C.

         (h) The Company  hereby  indemnifies  each Director  against any claims
         arising  from that  Director's  action in his capacity as a Director of
         the Company, except for such acts in violation of criminal laws.

9.02     Power of the Board.

         (a) The  Board of  Directors  shall  be the  highest  authority  of the
         Company;

         (b) Resolutions  involving the following matters may only be adopted at
         a duly  constituted  and convened  meeting of the Board  whereupon such
         resolution  receives the unanimous  affirmative  vote of each and every
         Director of the Board voting in person or by proxy at such meeting;

              (i)  Amendment  of the Joint  Venture  Contract  and  Articles  of
              Association;

              (ii)Merger   and   integration   of  the  Company   with   another
              organization, or establishment of subsidiaries of the Company;

              (iii)Dissolution of the Company;

              (iv)Any  increase  or transfer  of the  registered  capital of the
              Company;

              (v)Execution, supplement, modification,  termination, substitution
              or   assignment   by  the  Company  of  any  credit  or  financing
              agreements,   any  Operation  and  Offtake  Contract,   and  major
              construction contract or material contract;

              (vi)Additional  capital  requirement  or financing  amounts  above
              total investment amounts as set forth in Article 6.01;

              (vii)Appointment of General Manager and Deputy General Managers of
              the Company;

         (c) All other  issues  that  require a  resolution  by the Board may be
         raised at a duly convened meeting of the Board. Such resolution must be
         adopted by the  affirmative  vote of a 2/3 of the Directors  present at
         such meeting in person or by proxy;

         (d) Any  matter to be  decided  by the Board may be  decided  without a
         meeting  if all  Directors  consent in  writing  to such  matter.  Such
         written   consent  shall  be  filed  with  the  minutes  of  the  Board
         proceedings  and shall have the same  force and  effect as a  unanimous
         vote taken by the Directors physically present.

9.03     Meetings

         (a) Annual Meetings:  The first meeting of the Board of Directors shall
         be held  within  thirty (30) days from the date the Company is issued a
         Business License pursuant to this Contract. Thereafter, the Board shall
         meet at least once every year. Meetings shall be held at the registered
         address of the  Company or such other  address in China or abroad as is
         designated  by the  Board.  The  Chairman  of the  Board  shall set the
         meeting's  agenda  after  consultation  with the Vice  Chairmen  of the
         Board. The Chairman is responsible for convening and presiding over all
         Board meetings.

         (b) Proxy:  Meeting may be attended by Directors in person or by proxy.
         If a Director is unable to participate in a Board meeting, he may issue
         a proxy and entrust a  representative  to participate in the meeting on
         his behalf.  The  representative so entrusted shall have the rights and
         powers as stated in the proxy.

         (c)  Interim  Meetings:  Interim  meetings  of the  Board  may be  held
         provided three (3) or more of the Directors submit written requests for
         such meetings  specifying  the matters to be  discussed.  Within thirty
         (30) days upon  receipt of such  written  notice,  the  Chairman  shall
         convene an interim  meeting of the Board.  If the Chairman is unable to
         participate  in an interim  meeting,  in his absence the Vice  Chairman
         taking his place shall  decide on the time and location of such interim
         meetings.

         (d)  Quorum:  Five (5)  Directors  present in person or by proxy  shall
         constitute  a quorum  necessary  for the  conduct  of  business  at any
         meeting of the Board. If at any properly convened meeting, no quorum is
         constituted  because less than five (5) Directors are present in person
         or by proxy, then the meeting shall be canceled,  the Chairman may call
         another meeting with seven (7) days' notice. Any Director absent from a
         meeting without giving a reason therefor and without having appointed a
         proxy shall be considered to have abstained  from voting.  Resolutions,
         except those concerning the issues prescribed in Article 9.02(b), shall
         be valid if passed by a majority of the Directors present.

         (e) Notice of Meeting:  The notice of a Board  meeting shall be sent to
         all  directors  ten (10) days in  advance of each  meeting.  The notice
         shall state the time,  venue and main agenda of the meeting,  including
         relevant documents and information.

         (f) Minutes:  The Board will cause  complete  and  accurate  summary of
         minutes  (in  both  English  and  Chinese)  to be kept of all  meetings
         (including  a  copy  of the  notice  of the  meeting)  and of  business
         transacted at such meetings. Minutes of all meetings of the Board shall
         be distributed  to all the Directors as soon as practicable  after each
         meeting but not later than ten (10) days from the date of such meeting.
         Any  director who wishes to propose any  amendment or addition  thereto
         shall submit the same in writing to the Chairman and the Vice  Chairmen
         within one (1) week after receipt of the proposed minutes.  The minutes
         shall be finalized  by the  Chairman  and Vice  Chairman not later than
         thirty  (30) days  after the  relevant  meeting  and  signed by all the
         directors within one (1) week after receipt of the final minutes.


ARTICLE 10.       MANAGEMENT ORGANIZATION

10.01    Management Organization;

         The Company shall adopt a general manager  responsibility  system under
         the leadership of the Board of Directors.  The Company management shall
         include a General Manager and two Deputy General Managers.  The General
         Manager  shall  be  nominated  by  Party C and  each of the two  Deputy
         General Managers nominated  respectively by Party A and Party B and the
         Board of Directors needs to unanimously  approve the appointment of the
         General Manager and the two Deputy General Managers for a term of three
         (3) years.  The General Manager and the Deputy General  Managers may be
         removed  only by a majority  resolution  of the Board.  If the  General
         Manager  or the  Deputy  General  Manager is removed by Board or if his
         term of office  expires a successor  shall be nominated by the original
         nominating Party for approval by the Board of Directors.

10.02    Responsibilities and Power of the General Manager

         The General  Manager shall at all times be  responsible to the Board of
         Directors and shall carry out all matters  entrusted by the Board.  The
         General  Manager  shall be in charge of the  financial  affairs and the
         day-to-day  operation  and  management  of the Company.  And the Deputy
         General  Managers  shall  assist the General  Manager in his work.  The
         General Manager and the Deputy General Managers shall meet regularly to
         deal with important issues arising from the operation and management of
         the Company.


ARTICLE 11.       SITE

11.01    Site

         The area of the  Site  for the  Power  Plant  is  approximately  80 MU.
         Details  regarding  the Site are set forth in the  Project  Feasibility
         Study Report.

         The use of the Site shall include full access to all  necessary  public
         roads in the vicinity, so that the Company staff and relevant personnel
         of parties concerned may have full access to the Site, which shall also
         include  the  right  to  use  external   connecting  points  to  public
         utilities.

         Party A and Party B are duty bound to assist the  Company in  obtaining
         the  lawful  land use  right of the Site  during  the term of the Joint
         Venture  Contract so as to conform with the  requirement of Chinese law
         and to ensure the construction and normal operation of the Power Plant.


ARTICLE 12.       SALE OF ELECTRICITY

12.01    Sale of Electricity

         The sale of  electricity  generated  by the Power  Plant  shall be made
         pursuant to the  Operation  and Offtake  Contract  entered  into by and
         between the Company and the Anhui Provincial Electric Power Company.

12.02    Tariff Determination

         The tariff of the  electricity  generated  by the Power  Plant shall be
         determined  and  adjusted  in  accordance  with the  provisions  of the
         Operation and Offtake  Contract entered into by and between the Company
         and the Anhui Provincial Electric Power Company,  the estimated initial
         tariff  and the  principle  of tariff  adjustment  are  subject  to the
         approval of relevant pricing authority.


ARTICLE 13.       CONSTRUCTION

13.01    Construction Management

         The Company will select an  experienced  Chinese or foreign  company as
         EPC  contractor  through  public  bidding.  The EPC  Contract  shall be
         comparable to  internationally  accepted parties in similar projects in
         the areas of construction  schedules,  quality and others. The detailed
         clauses  shall be specified  in the EPC  Contract.  The EPC  Contractor
         shall appoint  designing and  construction  consultants who are rich in
         constructing and managing  gas-steam  combined cycle generating set and
         agreed to by the company.

13.02    Owner's Engineer

         The Company  will appoint an owner's  engineer to exercise  supervision
         and management over the construction of the Power Plant.


ARTICLE 14.       OPERATION AND MAINTENANCE OF THE POWER PLANT

14.01    Operation and Maintenance

         The Company will enter into an Operation and Offtake  Contract with the
         Anhui  Provincial  Electric Power Company which will be responsible for
         the  operation,  maintenance  and  repair  of the  Power  Plant and for
         providing,  on a long-term  and stable  basis,  fuel whose quality must
         cater to the operational requirement of the Power Plant.

         The manager of the Power  Plant is  appointed  by the Anhui  Provincial
         Electric  Power  Company  after  having  consulted  the Company and the
         appointment shall be submitted to the Board of Directors of the Company
         for the record.


ARTICLE 15.       LABOR MANAGEMENT

15.01    Labor Management

         The Company shall be  responsible  for its own labor  management and is
         responsible for recruitment,  employment, dismissal, resignation, wages
         and  welfare of its working  personnel  in  accordance  with the 'Label
         Management  Regulations of the PRC for Foreign Investment  Enterprises'
         (the  'Labor   Regulations')  and  other  relevant   regulations.   The
         organization  chart,  qualifications  and number of employees  shall be
         determined by the Board of Directors in  accordance  with the operating
         needs of the Company.


ARTICLE 16.       FINANCIAL AFFAIRS AND ACCOUNTING

16.01    Financial Principles

         (a) The General  Manager of the company  shall be  responsible  for the
         financial management of the Company.

         (b) The Company  shall  prepare  the  Company's  accounting  system and
         procedures in accordance  with the  'Accounting  System of the People's
         Republic  of  China  for  Foreign   Investment   Enterprises'  and  the
         'Financial  Management  System of the  People's  Republic  of China for
         Foreign  Investment  Enterprises'.  The Company  shall also conduct its
         accounting  in   accordance   with  such   internationally   recognized
         accounting  standards as any foreign lender to the Company may require.
         The Company shall  practice the accrual system and the debit and credit
         accounting system. The Company's accounting system and procedures shall
         be submitted to the Board for approval. Once approved by the Board, the
         accounting system and procedures shall be filed for the record with the
         higher  competent  authority and with the relevant local  department of
         finance and tax authorities.

         (c) The Company shall adopt RMB. as its bookkeeping base currency.

         (d) All accounting records,  vouchers and books of the Company shall be
         made and kept in  Chinese.  At the request of Party C, some part of the
         records  and books will be provide to Party C in  English.  All Company
         accounting statements shall be made and kept in English and Chinese.

16.02    Auditing

         (a) The Company will engage an independent  accounting  firm registered
         in China as its  auditor  to examine  and  verify the annual  financial
         report.  Such  accounting firm shall be of  international  standard and
         shall be  entrusted  by the  Board.  The  Company  shall  submit to the
         Parties an annual  statement of final  accounts  (including the audited
         profit and loss  statement  and the balance  sheet for the fiscal year)
         within  two  (2)  months  after  the  end  of  the  fiscal  year.  Such
         documentation  will be submitted together with an audit report prepared
         by the accounting firm registered in China.

         (b) Each Party may, at its own expense,  appoint an  accountant  who is
         either an accountant  registered  abroad or in China.  On behalf of the
         Party,  the  independent  accountant may audit the Company's  accounts.
         Such  accountants  shall be given  reasonable  access to the  Company's
         financial records and shall keep confidential all documents under their
         auditing.

         (c) The Company shall present to the Parties balance sheets, profit and
         loss statements and other  supplementary  information  requested by the
         Board on a monthly  basis.  Such  information  shall be provided to the
         Parties both in English and Chinese.

16.03    Bank Accounts and Foreign Exchange Control

         The  Company  shall  open a foreign  exchange  account  and a  Renminbi
         account at banks within or outside  China;  such bank shall be approved
         by the State  Administration of Exchange Control. The Company's foreign
         exchange   transactions   shall  be  handled  in  accordance  with  the
         regulations of China relating to foreign exchange control.

16.04    Foreign Exchange Balance

         (a) In the event the Company borrows foreign  currency from lenders not
         located in China,  the Company  shall,  in accordance  with  applicable
         foreign exchange  regulations of the People's  Republic of China,  open
         USD cash  accounts at a bank approved by relevant  authorities  for the
         repayment  of  principal  of and the  payment  of  interest  on foreign
         currency loans.

         (b) Funds in the Company's  foreign  exchange  account shall be used as
         determined by the Board of Directors to satisfy foreign  exchange debt,
         expenses,  remittances  of profit and other  remittances  in accordance
         with relevant  foreign  exchange  control  regulations  of the People's
         Republic of China.

         (c) All remittances to Party C due in accordance with the provisions of
         this  Contract  shall be made to a foreign bank account  designated  by
         Party C in US  Dollars  or in  accordance  with  the  foreign  exchange
         control  regulations  of China  and the  commitment  of  local  foreign
         exchange control authority.  The Company shall pay for the fee incurred
         in the conversion.

16.05    Fiscal Year

         The Company  shall adopt the calendar  year as its fiscal  year,  which
         shall begin on January 1 and end on  December 31 of the same year.  The
         first  fiscal year of the Company  shall  commence on the date when the
         Company is established and granted a Business License, and shall end on
         December 31 of the same year.

16.06    Revenues and Their Distribution

         (a) The revenues due to the Company shall be  distributed in accordance
         with the following priority of payment

              (i)Operation and fuel costs of the Power Plant;

              (ii)Financial expenses (loan interest, exchange loss and financing
              cost);

              (iii)Cost of the Joint Venture Company,  including  administrative
              expenses,   insurance   expenses,   fees   payable  to   auditors,
              consultants and advisors and all other such expenses;

              (iv)Income tax and other taxes;

              (v)Repayment of loan principal;

              (vi)Approved  by the  Board of  Directors  to cover  losses of the
              previous year;

              (vii)Statutory funds;

              (viii)Distributable profit;

         (b) After the payment of any  applicable  related taxes and fees by the
         Company,  the  Board  will  determine  the  annual  allocations  to the
         statutory funds as required by Chinese laws and regulations. The sum of
         the annual allocations to the statutory funds shall be less than 15% of
         the after-tax profit of the year under consideration  (unless otherwise
         required by law).  Any  increase or decrease in the  percentage  to the
         statutory  funds shall be determined by the Board of Directors,  in the
         light of annual business operation.

         (c) All distributable  profits shall be distributed pursuant to amounts
         as specified in Appendix 1 hereto.  In view of the provision of Article
         20 hereto  that the fixed  assets of the Company  will be  gratuitously
         owned by Party A and Party B upon the  expiration  of the Joint Venture
         term, if the  distributable  profit in a certain fiscal year during the
         Joint Venture term (including the approved  extension  period) fails to
         reach the  estimated  amount as listed in Appendix 1, the  distribution
         among the Parties shall be carried out in accordance with the following
         priorities: (I) Party C (ii) Party A and Party B

         (d)  If  the  company  carries  losses  from  the  previous  year,  the
         development  and  reserve  funds  (the  amounts  of  drawdown  will  be
         determined by the Board) from the cumulative statutory funds will first
         be used to compensate  for the losses in the previous  year, if that is
         still insufficient, then the profits of the current year shall first be
         used to cover  the  losses in the  previous  year.  No profit  shall be
         distributed by the company unless the deficit from the previous year is
         made up. The profits carried out from previous year and retained by the
         Company may be distributed  together with the  distributable  profit of
         the current year.

         (e) Profits shall be  distributed in accordance  with the  distribution
         plan  formulated in accordance with Appendix 1 of this Contract and the
         above stipulation,  without the necessity of being unanimously approved
         by the  Board  of  Directors.  After  having  received  the  applicable
         approval, the Company may predistribute profits every half a year.


ARTICLE 17.       TAXATION AND INSURANCE

17.01    Taxes

         (a) The Company and its Chinese and expatriate  employees shall pay tax
         under the relevant tax laws of China.

         (b) Following  approval of this Contract by the Examining and Approving
         Authority,  the Company will submit an application for  confirmation of
         the Company as a technically advanced enterprise in accordance with the
         'Implementing measures of the Ministry of Foreign Cooperation Trade and
         Economic  on  the  Confirmation  and  Examination  of  Foreign-Invested
         commodity Export Enterprises and Technologically  Advanced Enterprises'
         in order to obtain the most favorable tax rates.

17.02    Insurance

         The  insurance  for the  Company  for  various  kinds of risks shall be
         purchased from insurance  companies  registered within PRC. The Company
         shall  undertake  to procure  the types of  insurance  as  required  by
         overseas creditors which include but are not limited to the following;

         (a) Property All Risks Insurance,  Construction All Risks Insurance and
         Erection  All  Risks  Insurance   (including  domestic   transportation
         insurance for  equipment)  before and after the completion of the Power
         Plant and thereafter in respect of any upgrading or  maintenance  works
         to the Power Plant;

         (b)  Property  All  Risks  Insurance,  Machinery  Breakdown  Insurance,
         Business   Interruption   Insurance,   Machinery   Breakdown   Business
         Interruption  Insurance,  Bodily Injury  Insurance,  Personal  Accident
         Insurance  and  Additional  Cover for Medical  Expenses  for the period
         after the completion of the Power Plant; and

         (c) Other  necessary  insurance  coverage  which the Board of Directors
         decides on.


ARTICLE 18.       JOINT VENTURE TERM

18.01    Joint Venture Term

         The term of the Joint Venture  established  under this  Contract  shall
         commence  on the date the  Company is granted a Business  Licensed  and
         shall terminate  sixteen (16) years  thereafter  (including one year of
         construction).  The fixed  assets of the Company  will be  gratuitously
         owned  by  Party  A and  Party  B upon  the  expiration  of  the  Joint
         Venture.(including  the  expiration  of  the  extended  term  of the JV
         pursuant to Article 18.02)

18.02    Extensions to the Joint Venture Term

         If it is estimated  six months prior to the  expiration  of the term of
         this Contract that if the non-fixed assets are liquidated in accordance
         with Article 20.03 upon  expiration of the term, the Parties can hardly
         recover all their investments  pursuant to Appendix 1 hereto,  then the
         directors of the Parties shall  unanimously  agree upon  postponing the
         Joint  Venture  term  until  the full  recovery  of  investment  by the
         Parties, and application for approval in respect of extending the Joint
         Venture term shall be promptly submitted to the Examining and Approving
         Authority.


ARTICLE 19.       DEFAULT

19.01    Default

         In the event the Company is unable to continue its operation or achieve
         the established  objectives  stipulated in this Contract due to failure
         of a Party to  fulfill  its  obligations  under this  Contract  and its
         Appendices,   the  non-defaulting  Parties  shall  have  the  right  to
         terminate  this Contract in  accordance  with Article 20 herein and the
         liabilities arising from default shall be borne by the defaulting Party
         as provided for in this Contract and its Articles of  Association.  The
         defaulting Party shall make the consequent payment arising therefrom to
         the non-defaulting Parties.


ARTICLE 20.       TERMINATION AND LIQUIDATION

20.01    Termination

         No Party shall have the right to terminates  this Contract  advanced if
         the  repayment of the  principal  and payment of interest on loan under
         the  Loan  Contract  have not  been  completely  paid  off.  After  the
         completion of the payable period, the Party may terminate this Contract
         advanced only under the following circumstances.

              (i)The  Parties  unanimously  agree in writing to  terminate  this
              Contract;

              (ii)A Party  materially  breaches  this  Contract or violates  the
              Articles of Association, and such breach or violation is not cured
              within thirty (30) days of written notice to the defaulting  Party
              by a non-defaulting Party;

              (iii)The  conditions or consequences of Force Majeure as hereafter
              defined  in  Article 21  significantly  interfere  with the normal
              functioning of the company for a period in excess of eighteen (18)
              months and the  Parties are unable to find an  equitable  solution
              pursuant to Article 21 hereof;

              (iv)The  Operation and Offtake  Contract and other major contracts
              are terminated;

              (v)The change of law causes  significant  adverse  consequences to
              the Company or any Party,  while the economic benefits  stipulated
              in Article 23.02 hereof are not adjusted accordingly.

20.02    Notification Procedure

         Mere  submission  by any  Party of a  notice  indicating  a  desire  to
         terminate this Contract shall not by itself constitute a termination of
         this  Contract.  In the event that any Party gives  notice  pursuant to
         Article  20.01  hereof  of a desire to  terminate  this  Contract,  the
         Parties  shall,  within a two (2) month  period  after  such  notice is
         given, conduct negotiations and endeavor to resolve the situation which
         resulted in the giving of such notice.  In the event that the situation
         which  resulted  in the  giving  of such  notice  is not cured and that
         matters are not resolved to the  satisfaction of the Parties within two
         (2) months of such notice,  the notifying Party may follow the relevant
         procedures  and laws and apply to the original  Examining and Approving
         Authority for the  termination of the Contract.  In the event a default
         is  committed  by a  Party  to  this  Contract  which  results  in  the
         termination  of this  Contract,  the  defaulting  Party shall bear full
         responsibility and costs associated with such default.

20.03    Liquidation

         The  Company  shall carry out the  procedures  for  liquidation  of the
         Company in accordance  with the law of the People's  Republic of China,
         if this  Contract  is  terminated  earlier  pursuant  to Article  20.01
         hereof.

         Liquidation Committee:  The Board of Directors shall form a Liquidation
         Committee,  comprising  two (2) members  appointed  by Party A, one (1)
         member appointed by Party B and four (4) members  appointed by Party C.
         The Liquidation  Committee shall conduct a thorough  examination of the
         assets and liabilities of the Company and develop a liquidation plan in
         compliance  with this Contract and relevant laws and regulations of the
         People's  Republic  of China for the  liquidation  of the  Company.  No
         member of the  Liquidation  Committee  shall have the power to take any
         action binding on the Liquidation Committee, or the Board of Directors,
         or the  Company  without the express  authorization  and the  unanimous
         consent of the entire Liquidation  Committee.  All actions taken by the
         Liquidation  Committee  shall  require  the  unanimous  approval of the
         entire Liquidation Committee.  The Liquidation Committee will value and
         liquidate the Company's assets based on the actual circumstances of the
         Company  valued as an ongoing  concern,  so as to cause the  Parties to
         receive the then market value for the assets.

         Liquidation Plan: Upon earlier termination of this Contract pursuant to
         paragraphs  (a),(c),and  (d) of Article 20.01 hereof,  the  liquidation
         plan  shall  provide  first  for  payment  of the  Company's  debts and
         expenses.  Following  such  payments,  the  Company's  assets  shall be
         distributed  to the  Parties  proportionally  in  accordance  with each
         Party's registered capital share of the Company. Upon early termination
         of the Contract  pursuant to section 2 of Article 20.01, the defaulting
         Party can participate in the  aforementioned  distribution only when it
         has undertaken its  responsibility  for breach and  indemnified the non
         defaulting Party for the loss.

         In the event of a situation as  mentioned  in paragraph  (d) of Article
         20.01,  the Purchaser shall compensate an amount of termination cost to
         the Company,  pursuant to the Operation and Offtake Contract, the total
         assets  (including  but not  limited to fixed  assets  and  circulating
         assets) of the Company and the termination cost shall be distributed to
         Party C on a priority  basis,  so that  Party C can obtain  anticipated
         returns as estimated in Appendix I hereof,  the remaining part shall be
         distributed proportionally to Party A and Party B.

20.04    Normal Termination of Contract Upon Expiration of Joint Venture Term.

         In addition to the  extension of this contract as stipulated in Article
         18.02 hereof,  this Contract  shall  terminate  upon  expiration of the
         joint venture term as designated in Article 18.01 hereof.

         Upon the  expiration of the joint venture term as stipulated in Article
         18 without being  extended,  the total fixed assets of the Company will
         be  gratuitously  turned  over to Party 'A' and  Party  'B'  registered
         capital  which  the  cash  from  converted  non-fixed  assets  shall be
         distributed in accordance with the following Priorities:

         (a) Repayment of the Company debts;

         (b) To  compensate  for  the  difference  between  the  actual  returns
         obtained by Party C and the estimated  amounts as specified in Appendix
         1 hereof;

         (c) The residual  amounts  shall be  distributed  in  proportion to the
         ratio of investment made by the Parties;


ARTICLE 21.       FORCE MAJEURE

21.01    Force Majeure

         (a) 'Force Majeure' includes but is not limited to any of the following
         events:

              (i)War, hostilities or rebellion;

              (ii)Plague or other contagious diseases;

              (iii)Fire not caused by negligence or deliberateness;

              (iv)Lightening;

              (v)Earthquake;

              (vi)Other forces of nature, including natural disasters.

         The  aforesaid  events  shall have  simultaneously  the  following  six
         characteristics:

              (i)  Arising after the signing of this Contract;

              (ii) Unforeseen or unavoidable;

              (iii)Beyond the control of a Party concerned;

              (iv) Occurring within the Plant Site;

              (v)  Directly preventing a Party from performing this Contract;

              (vi) Cannot  be prevented in spite of utmost  efforts being 
              exerted by that Party.

         (b) If occurrence  of an event of Force  Majeure  prevents a party from
         fulfilling its obligations  (excluding capital contribution and payment
         obligations)  under  this  Contract,  the Party may be  suspended  from
         performing such obligations provided;

              (i)Suspension  of performance is of no greater scope and no longer
              duration  than is  reasonably  required  to  correct  consequences
              caused by the event of Force Majeure; and

              (ii)Suspension  of performance will not apply to any obligation to
              make payments under this Contract.

         (c) In the event any Party is unable to fulfill  its  obligation  under
         this Contract as a result of Force  Majeure,  the Party  claiming Force
         Majeure shall  promptly  inform the other two Parties in writing within
         15 days of such occurrence. Such notification shall state the nature of
         the  event,  the  anticipated  duration  and any  action  taken  by the
         affected  party to mitigate the effect.  In the event of Force Majeure,
         the Parties shall immediately  consult with each other in order to find
         an  equitable  solution  and  shall  use all  reasonable  endeavors  to
         minimizes the consequences of such Force Majeure.


ARTICLE 22.       SETTLEMENT OF DISPUTES

22.01    Conciliation and Mediation

         Any dispute in connection  with this  Contract will be settled  through
         friendly consultation or conciliation among the Parties.  Consultations
         shall  occur  immediately  upon the  request  of one Party to the other
         Parties  regarding  disputes.  Disputes may also be mediated by a third
         party  designated by the Parties to this Contract.  If mediation is not
         successful  within 30 days,  disputes may also be submitted to binding,
         non-appealable arbitration for settlement.

22.02    Arbitration

         The following  rules and  procedures  shall apply to an  arbitration of
         disputes between the Parties under this Contract.

         (a)  Arbitration  under this  Contract will be conducted by an arbitral
         tribunal in accordance  with UNCITRAL  arbitration  rules  contained in
         Resolution  31/98  adopted by the United  Nations  General  Assembly on
         December 15, 1976 and entitled 'Arbitration Rules of the United Nations
         Commission on International Trade Law' or its amendments as in force at
         the time such  arbitration  is  commenced.  Should  there be a conflict
         between the rules and  provisions of this Contract and the  arbitration
         rules, the rules and provisions of this Contract shall govern.

         (b) The  arbitral  tribunal  shall have three (3)  members.  Each Party
         shall designate one arbitrator within 30 days after giving or receiving
         request for arbitration. The third arbitrator shall be appointed by the
         other two  arbitrators  within 10 days of the appointment of the second
         arbitrator. If any of the arbitrators are not appointed within the time
         limits set forth in this section, arbitrators will be designated by the
         Secretary General of the International Arbitration Center.

         (c)  All  arbitrators  must be  fluent  in  Chinese  and  English.  The
         arbitration  shall be conducted in Chinese and English.  Any subsequent
         arbitration award shall also be written in Chinese and English.

         (d)  The  venue  and   organization   for   arbitration   is  Singapore
         International  Arbitration Centre or other  international  locations or
         arbitration organizations agreed to by the Parties.

         (e) The  Parties  agree to accept  the  arbitration  award as final and
         binding.  The Parties  renounce  their right to  appealing  against the
         arbitration award.

         (f) The Parties agree to bear all costs as determined  and allocated in
         the arbitration award.

22.03    Continuing Rights and Obligations

         The  Parties  shall  continue to exercise  their  remaining  respective
         rights, and fulfill their remaining  respective  obligations under this
         Contract except in respect of those matters under dispute.

22.04    Waiver of Immunity

         To the extent the Parties may claim for  themselves or their assets and
         revenues,  immunity  from suit  execution,  attachment  or other  legal
         process,  the  Parties  agree not to claim such  immunity  and agree to
         irrevocably  waive such  immunity to the fullest  extent  permitted  by
         applicable law.


ARTICLE 23.       APPLICABLE LAW

23.01    Applicable Law

         The validity,  interpretation and implementation of this Contract shall
         be  governed  by the laws of the  People's  Republic of China which are
         published  and  publicly  available.  In the  event  that  there  is no
         published and publicly  available  law in China  governing a particular
         matter  relating to this Contract,  reference  shall be made to general
         international commercial practices.

23.02    Economic Adjustment for Change of Law

         As used herein 'Change of Law' means the  promulgation of any new laws,
         rules or regulations in China or the amendment or interpretation of any
         existing laws, rules or regulations in China relating to taxes,  custom
         duties, environmental issues or other matters concerning this Contract.
         In the event that a Change of Law  adversely and  materially  affects a
         Party's  economic  benefit  under  this  Contract,  the  Parties  shall
         promptly  consult  with  each  other and use their  best  endeavors  to
         implement  adjustments  necessary  to maintain  each  Party's  economic
         benefits derived from this Contract. The basis of this adjustment shall
         be no less favorable  than the economic  benefits it would have derived
         if such laws,  rules or regulations had not been promulgated or amended
         or so interpreted.

23.03    Preferential Treatment

         The Company and the Parties shall be entitled to any tax, investment or
         other benefits or preferences  that become  available or publicly known
         after the signing of this  Contract and which are more  favorable  than
         those set forth in this Contract.


ARTICLE 24.       MISCELLANEOUS PROVISIONS

24.01    Environmental

         The  Company  shall  undertake  environmental  protection  measures  in
         accordance  with  the  'Law  of  the  People's  Republic  of  China  on
         Environmental Protection' and other relevant laws and regulations.

24.02    Waiver

         To the extent permitted by Chinese Law, failure or delay on the part of
         any Party  hereto to exercise a right,  power or  privilege  under this
         Contract  and the  Appendices  hereto  shall  not  operate  as a waiver
         thereof or other rights, powers or privileges;  nor shall any single or
         partial  exercise of a right,  power or  privilege  preclude  any other
         future exercise thereof.

24.03    Binding Effect

         This  Contract  is made  for  the  benefit  of the  Parties  and  their
         respective  lawful  successors and assignees and is legally  binding on
         them.  This Contract may not be changed  orally,  but only by a written
         instrument  signed  by all  Parties  and  approved  by the  appropriate
         Examining and Approving Authority.

24.04    Language

         This  Contract is executed in the Chinese  language  and in the English
         language. Both language versions shall be equally effective.

24.05    Entire Agreement

         This Contract and the Appendices  attached to this Contract  constitute
         the entire  agreement  between the Parties  with respect to the subject
         matter  of  this  Contract  and   supersede   all  prior   discussions,
         negotiations and agreements  between them. In the event of any conflict
         between  the terms and  provisions  of this  Contract  and those of the
         Articles of  Association,  the terms and  provisions  of this  Contract
         shall prevail.

24.06    Notices

         Any notice or written  communication  provided for this Contract by any
         Parties or the others, including but not limited to any and all offers,
         writings,  or notices to be given thereunder,  shall be in writing made
         in English and Chinese, and shall be sufficiently given if addressed as
         set  forth  below  and sent by  registered  mail or an  internationally
         recognized  overnight courier  services,  hand delivered or transmitted
         clearly by  facsimile,  however all  facsimile  shall be  confirmed  by
         courier service delivered letter,  promptly transmitted or addressed to
         the  appropriate  Party.  The date of  actual  receipt  of a notice  or
         communication  thereunder shall be deemed to be the effective date. All
         notices and communications shall be sent to the appropriate address set
         forth  below,  until the same is changed by notice  given in writing to
         the other Parties.

                  Party A:                  Anhui Liyuan Electric Power
                                            Development Company Limited

                  Address:                  No. 415 Wuhu Road
                                            Hefei, Anhui province
                                            China

                  Telephone No:             86-551-3642775
                  Facsimile No:             86-551-3637642
                  Attention:                Cheng Guangjie
                  Zip Code:                 230061

                  Party B:                  Hefei Municipal Construction and
                                            Investment Company

                  Address:                  No. 186 Suzhou Road
                                            Hefei, Anhui province
                                            China

                  Telephone No:             86-551-2617410
                  Facsimile No:             86-551-2649751
                  Attention:                Shen Dequan
                  Zip Code:                 230001

                  Party C:                  AES-Anhui Power Company Ltd.

                  Address:                  3/F, Golden Bridge Building No. 1
                                            Jianguomenwai Street, Beijing
                                            China

                  Telephone:                86-10-5089619
                  Facsimile No:             86-10-5089628
                  Attention:                Paul T. Hanrahan
                  Zip Code:                 100020

24.08  Appendices

         The Appendices  listed below are made an integral part of this Contract
and are equally binding with Article 1 through Article 24 herein.


         SIGNATURES

         IN  WITNESS  WHEREOF,  each of the  Parties  hereto  have  caused  this
Contract  to be executed by their duly  authorized  representatives  on the date
first set forth above.

         PARTY A:  Anhui Liyuan Electric Power Development Company Ltd.

         Name:[Signature Illegible]
         Title:
         Nationality: Chinese



         PARTY B:Hefei Municipal Construction and Investment Company.

         Name:[Signature Illegible]
         Title:
         Nationality: Chinese



         PARTY C:  AES Anhui Power Company Limited.

         Name:[Signature Illegible]
         Title:
         Nationality:  U.S.A.




APPENDIX 1.

THE PROJECTED RETURN ON EQUITY PRINCIPAL OF THE PARTIES OVER THE YEARS.
UNIT:  USD

                                     [***]


[***] Filed separately with the Commission pursuant to a request for 
confidential treatment.