Power Purchase Contract - Yangcheng International Power Generating Co. Ltd. and Jiangsu Provincial Power Co.


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


                            POWER PURCHASE CONTRACT





                     RELATED TO THE 6 X 350 MW POWER STATION
                          IN YANGCHENG, SHANXI PROVINCE







                                 BY AND BETWEEN







            YANGCHENG INTERNATIONAL POWER GENERATING COMPANY LIMITED

                                       AND

                        JIANGSU PROVINCIAL POWER COMPANY







                                TABLE OF CONTENTS

ARTICLE 1  DEFINITIONS................................................3
ARTICLE 2  OBLIGATIONS PRIOR TO THE COMMERCIAL OPERATION..............6
ARTICLE 3  COMMENCEMENT OF COMMERCIAL OPERATION.......................7
ARTICLE 4  OPERATION, DESPATCH AND EXAMINATION........................8
ARTICLE 5  ON-GRID TARIFF............................................11
ARTICLE 6  METERING OF ELECTRICITY...................................15
ARTICLE 7  PAYMENT OF ELECTRICITY FEE................................16
ARTICLE 8  BREACH OF CONTRACT AND COMPENSATION.......................17
ARTICLE 9  INSURANCE.................................................19
ARTICLE 10 FORCE MAJEURE.............................................19
ARTICLE 11 ASSIGNMENT................................................20
ARTICLE 12 CONTRACT TERM & TERMINATION...............................21
ARTICLE 13 GOVERNING LAWS AND SETTLEMENT OF DISPUTES.................21
ARTICLE 14 EFFECTIVENESS OF THE CONTRACT AND AMENDMENTS..............22
ANNEX 1..............................................................24
POWER STATION OR PROJECT.............................................24
ANNEX 2..............................................................25
DEDICATED TRANSMISSION FACILITIES....................................25
ANNEX 3..............................................................27
PERFORMANCE INDICES AND TESTING RESULTS FOR THE UNITS................27
ANNEX 4..............................................................28
RETURNS ON REGISTERED CAPITAL (ANTICIPATED REVENUE) OVER THE YEARS---26
ANNEX 5..............................................................29
METHOD OF ACCOUNT SETTLEMENT FOR THE AMOUNT OF  POWER GENERATED 
     BY THE POWER STATION............................................29
ANNEX 6..............................................................33
INSURANCE............................................................33





Parties to the Contract:

         Yangcheng International Power Generating Company Limited ('Party A'), a
Sino-foreign cooperative joint venture enterprise of limited liability which is
registered with the State Administration for Industry and Commerce of the
People's Republic of China and which possesses the legal status of a legal
person with its legal address at No.151 Shuangtashi Street in Tai Yuan City,
Shanxi Province, the People's Republic of China and its legal representative is
Bian Xuehai [Chinese characters].


         Jiangsu Provincial Power Company ('Party B'), a national enterprise of
the People's Republic of China owned by the entire people, which is registered
with Jiangsu Provincial Administration for Industry and Commerce and possesses
the legal status of a legal person with its registered address at #20 Beijing
Xilu, Nanjing, Jiangsu Province and its legal representative is Gu Zhipeng 
[Chinese characters].


         WHEREAS, Party A is planning to build, own and operate a power station
of 6 X 350MW capacity in Yangcheng County of Shanxi Province, and in
association with that Party B is planning to build, own and manage a 500KV
Dedicated Transmission Facilities for the delivery of electricity. Party A shall
sell to Party B the On-Grid Electricity of the Power Station and Party B shall
agree to purchase the aforementioned electricity.


         Party A and Party B, on the basis of equality and mutual benefit, have
undertaken negotiations on the sale and purchase of electricity that is
available from the 6 X 350MW Power Station, and have concluded this Power
Purchase Contract (this 'Contract').


         Upon its effectiveness, this Contract shall be binding on both Parties,
and the Parties shall strictly adhere to this Contract.


                              Article 1    Definitions



1.1      'Yangcheng International Power Generating Company Limited' shall be a
         limited liability company established by North China Electric Power
         Group Corporation, Jiangsu Province Investment Corporation, Shanxi
         Energy Enterprise (Group) Company, Shanxi Provincial Power Company,
         Jiangsu Provincial Power Company and AES China Generating Co. Ltd. in
         accordance with the 'Company Law of the People's Republic of China' and
         'Law of the People's Republic of China on Sino-Foreign Co-operative
         Joint Venture Enterprises' and other relevant Chinese laws,
         regulations, rules and the Joint Venture Contract of the Company.



1.2      'Property Right Boundary Point' shall refer to the area within 2 meters
         from the Connecting Point A located at the terminal tower of the
         electricity transmission line of the Dedicated Transmission Facilities
         outside to the enclosing wall of and next to the Power Station as
         illustrated in Drawing No. 0-3 in Annex 2.


1.3      'Power Station' or 'Project' shall refer to the 6 X 350MW
         coal-fired generating units and related ancillary facilities including
         the step-up substation and all the electrical equipment, water supply,



         coal supply and ash disposal systems within the Property Right Boundary
         Point which shall be invested and constructed by Party A in Yangcheng
         County of Shanxi Province. For details, refer to Annex 1.


1.4      'Dedicated Transmission Facilities' shall refer to the 500KV power
         transmission and transformation facility extended from the Property
         Right Boundary Point to the Huaiyin substation in Jiangsu Province. For
         details, refer to Annex 2.


1.5      'Units' shall refer to any of the six 350MW generating units designated
         as Unit 1 to Unit 6 with each of the Units numbered in accordance with 
         the design drawings.


1.6      'Connecting Point' shall be the Property Right Boundary Point which is
         designated as Point A in Drawing No. 0-3 of Annex 2.


1.7      'Unit Supply Capacity' with reference to any Unit of the Power Station
         shall be the maximum continuous output capacity in kilowatts (that is
         the gross generating capacity less consumption for the auxiliaries and
         station use, and transmission losses in the main transformer and
         busbar) of such Unit of the Power Station available at the Connecting
         Point as determined by tests carried out pursuant to Annex 3 before
         going into Commercial Operation of such Unit. Refer to Annex 3 for
         specific indices.


1.8      'On-Grid Electricity' shall mean for any period, the electricity
         generated and delivered by the Power Station to the Connecting Point
         that is qualified in accordance with the electricity quality standards
         of the state and is measured, in kilowatt hour ('KWH'), by the electric
         energy metering equipment provided for under Article 6.1 at the 500KV
         side near the Connecting Point.


1.9      'Effective On-Grid Electricity' shall refer to the on-grid electricity
         in KWHs which is derived from deducting the electricity counted as 'no
         metering of electricity and no payment' stipulated in Article 3.4 of
         Annex 5 from the On-Grid Electricity stipulated in Article 1.8.


1.10     'Normal Take' shall refer to the minimum amount of Effective On-Grid
         Electricity in KWHs in each year during the effective term of this
         Contract that Party B agrees to purchase from Party A after the Units
         have gone into Commercial Operation and shall equal to:

          6
         SIGMA Supply Capacity of Unit i  x  Annual Utilization Hours of 
         i=1                                 Unit i in the Year

         Where:


         i =1 to 6, referring respectively to Unit 1 through Unit 6


         Annual Utilization Hours for the Unit shall be:


         (1)      For the calendar Year in which the Unit goes into Commercial 
                  Operation,



                  [***] hours x (A/365)


         in which:


         A is the number of the days counting from the day on which the Unit is
         put into Commercial Operation to 31st December of that Year.


         (2)  For each calendar Year before 31st December 2010,  [***] hours;


         (3)  For the Year 2011, [***] hours;


         (4)  For each calendar Year from 2012 to 2015, [***] hours;


         (5)  For the Year 2016, [***] hours x (B/365)


         in which:


         B is the number of the days counting from 1st January of that year to
         the day on which the Joint Venture Term expires.


1.11     'On-Grid Tariff' shall mean the various On-Grid Tariff expressed in RMB
         Yuan per KWH corresponding to the On-Grid Electricity as defined in
         Article 1.8, calculated in accordance with the principles, methods and
         procedures set forth in Article 5, and approved by relevant competent
         pricing authorities of the State.


1.12     'Sales Tariff' shall mean the sales tariff expressed in RMB Yuan per
         KWH and approved by relevant competent pricing authorities of the
         State, corresponding to the On-Grid Electricity which Party B shall
         purchase from Yangcheng Power Station pursuant to the On-Grid Tariff
         stipulated in Article 1.11 and shall be delivered to the consumers in
         the Province through electricity supply networks.


1.13     'Electricity Fee' shall mean the payments expressed in RMB Yuan to be
         made by Party B to Party A pursuant to Article 7 in respect of the
         On-Grid Electricity purchased at the Connecting Point by Party B
         pursuant to Article 6, and to be calculated pursuant to the On-grid
         Tariff as stipulated in Article 5 of this Contract.


1.14     'Interconnection and Despatch Agreement' shall mean the Interconnection
         and Despatch Agreement executed between Party A and the State
         Electricity Despatch and Communication Centre for the Yangcheng Power
         Station.


1.15     'Despatch Agreement' shall mean the Despatch Agreement executed between
         Party B and the State Electricity Despatch and Communication Centre for
         the delivery of electricity through the Dedicated Transmission
         Facilities of Yangcheng Power Station.


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



1.16     'Commercial Operation' shall mean, for each Unit, the formal
         commencement of electricity generation acknowledged by Party A after
         the satisfactory completion of performance tests for the Unit executed
         in accordance with Article 3.


1.17     'Registered Capital' shall mean the total equity capital contributions
         actually made by the joint venture partners of Party A in accordance
         with the Joint Venture Contract.


1.18     'Joint Venture Contract' shall mean the Joint Venture Contract executed
         on 22nd August 1996 under which Party A was established and any of its 
         subsequent amendments.


1.19     'Joint Venture Term' shall mean the period of time from the date (10th
         October 1996) on which Party A has obtained its business license from
         the State Administration for Industry and Commerce until the expiration
         of the Joint Venture Contract.


1.20     'Completion Exchange Rate' shall mean the exchange rate (expressed in
         RMB per USD) used in converting the US Dollars expenditure in the total
         investment of the Power Station into RMB value for final account
         settlement in order to determine the original value of the assets of
         the Power Station at the completion of the construction of the Power
         Station, but before Unit 6 is put into Commercial Operation, it shall
         be equal to the Budgeted Exchange Rate.


1.21     'EPC Contract' shall mean the Engineering, Procurement and Construction
         Services Contract entered into by and between Party A (as the Owner)
         and Shanxi Provincial Power Company (as the EPC Contractor).


1.22     'Excess On-Grid Electricity' shall have the definition as stipulated in
         Article 7.5 herein.


1.23     'Party A's Liability for Short Generation' shall have the definition as
         stipulated in Article 4.6 herein.

1.24     'Party B's Liability for Short Purchase' shall have the definition as
         stipulated in Article 4.6 herein.


1.25     'State Despatch Center's Liability for Short Despatch of Electricity'
         shall have the definition as stipulated in Article 4.6 herein.


1.26     'Budgeted Exchange Rate' shall have the definition as stipulated in 
         Article 5.2 herein.


1.27     'Income Tax Rate' shall refer to the tax rates applicable to the
         enterprise income tax and the local income tax that Party A is liable
         to pay in accordance with the Income Tax Law for Foreign Invested
         Enterprises.


            Article 2 Obligations Prior to the Commercial Operation


2.1      Prior to Party A's issuance of the Notice to Proceed under the EPC
         Contract to the EPC Contractor:



(1)      Party A shall execute the EPC Contract.


(2)      Party A shall execute the Coal Supply Contract for coal needed by the 
         Power Station.


(3)      Party B shall co-operate fully with Party A in providing required
         information and convenience during Party A's negotiations with third
         party lenders.


(4)      Party B shall provide Party A with acceptable comfort letters issued by
         Jiangsu Provincial Government or provincial organs for Party B's
         performance of all the provisions of this Contract.


2.2      Party A shall cause Unit 1 to go into Commercial Operation within 
thirty five (35) months after the Ministry of Electric Power grants approval to
Party A for the issuance of the Notice to Proceed under the EPC Contract to the
EPC Contractor, and thereafter Unit 2, Unit 3, Unit 4, Unit 5 and Unit 6 to go
into Commercial Operation respectively at an interval of every five months.


2.3      Party A shall cooperate fully with Party B in providing required 
information and convenience during Party B's negotiations with third party 
lenders.


2.4       When the conditions are mature for the construction commencement of
Dedicated Transmission Facilities, Party B shall submit the commencement of
construction of the Project to the Ministry of Electric Power for approval, but
Party B shall guarantee to complete the Dedicated Transmission Facilities 3
months ahead of the date as stipulated in Article 2.2 on which the first Unit of
the Power Station goes into Commercial Operation in order to satisfy the testing
and interconnection requirements of the Power Station.


2.5       The Parties shall strive to ensure the concurrent construction of the 
Power Station, Dedicated Transmission Facilities and provincial transmission
facilities.


                 Article 3 Commencement of Commercial Operation


3.1       Party A shall conduct performance tests (See Annex 3 for major 
performance indices and test results) on each Unit in accordance with the EPC 
Contract. The date on which Party A issues the Commercial Operation Acceptance 
Certificate for any Unit to the EPC Contractor in accordance with the EPC 
Contract shall be the Date of Commencement of Commercial Operation of such Unit.


3.2       Party B shall agree to accept and purchase all the electricity 
generated by each Unit during the testing period and prior to the Commercial 
Operation.


3.3       Upon the Commencement of Commercial Operation of the Units, the 
Effective On-Grid Electricity which Party B shall agree to purchase from Party A
in each Year shall not be less than the Normal Take.



                  Article 4 Operation, Despatch and Examination


4.1       The Power Station and the Dedicated Transmission Facilities shall obey
the unified despatch of the State Power Despatch and Communication Centre 
('State Despatch Centre').  The Interconnection and Despatch Agreement and the 
Despatch Agreement shall be concluded separately.


4.2       Refer to Annex 3 for the range of electricity output of the Units that
is despatchable. (The design value of the range of electricity output of the 
Units that is despatchable is 50-100% of the rated capacity). With reference to
generating units of similar type in the East China and Jiangsu Power Grids, and
taking into account the economic factors and special characteristics of a
mine-mouth unit using anthracite as fuel, the Power Station shall reasonably
undertake the tasks of base load, peaking, frequency modulation and voltage
regulation of the power grid and shall be operated in accordance with the
generation despatch plans and despatch orders issued by the State Despatch
Centre.


         The annual, monthly and daily generation despatch plans of the Power
Station shall, pursuant to Party B's power purchase plan and the operating
status of the equipment of the Power Station, ensure that Party A and Party B
are able to satisfy the Normal Take and to leave an appropriate margin for
unseen circumstances within the annual planned despatchable hours of the Units.


         The equipment maintenance plans of the Power Station which shall take
into consideration the status of the equipment of the power grid and the Power
Station and the requirement to satisfy the Normal Take, and, in accordance with
the maintenance cycle and time stipulated under 'The Maintenance Regulations of
the Power Station' promulgated by the Ministry of Electric Power, shall be
arranged by the State Despatch Centre after overall co-ordination together with
Party A, Party B and relevant authorities.


4.3       In mid-July each Year, Party A shall submit to the State Despatch 
Centre the proposed operation plans and equipment maintenance plans of the Power
Station for the following Year. At the end of August each Year, Party B shall 
submit to the State Despatch Centre the proposed power purchase plan for the 
following Year. The State Despatch Centre shall issue to Party A with a copy to 
Party B, a prearranged plan for the following Year in December of each Year 
after co-ordinating and reaching a balance with Party A and Party B.


Before the 15th of each month, Party A shall submit to the State Despatch Centre
the proposed operation plan and equipment maintenance plan of the Power Station
for the following month; before the 20th of each month, Party B shall submit to
the State Despatch Centre the power purchase plan for the following month; the
State Despatch Centre shall issue to Party A with a copy to Party B, a
generation despatch plan and equipment maintenance plan for the following month
before the 25th of each month after co-ordinating and reaching a balance with
Party A and Party B.


4.4       Together with Party A and Party B, the State Despatch Centre shall 
formulate a typical daily load curve of the Power Station for the current month 
in accordance with the monthly generation despatch plan.


4.5       Party A shall ensure that the Annual Planned Despatchable Hours of the
Power



                                
          Station is equal to:

             N
         [(SIGMA) (Annual Planned Despatchable Hours of the Unit x Di/8760)]/N 
            i=1        

          In the above formula, the Annual Planned Despatchable Hours of the 
Unit shall be 7,350 hours for the Year(s) of and before the Commencement of
Commercial Operation of Unit 6 (assuming that during such Year the Commercial
Operation hours of the Units that have gone into operation are 8760 for each
Unit) and 7,400 hours for each Year subsequent to the Year of Commencement of
Commercial Operation of Unit 6.





                                                                  N
                                                               (SIGMA) Di
                                                                 i=1
       Annual Actual Despatchable Hours of the Power Station = -----------   -
                                                                   N

       Reduction in Despatchable Capacity of the Power Station in Equivalent 
       Annual Hours


          Where:


          Di shall mean the total number of hours of Commercial Operation of 
          Unit i during such Year;


          N shall mean the number of Units which have already been put into
          Commercial Operation in such Year.


          Reduction in Despatchable Capacity of the Power Station in Equivalent
          Annual Hours shall mean the annual cumulative and equivalent hours of
          outages owing to the reduction in Supply Capacity Available for
          Despatch during the despatch and operation of the Power Station,
          namely:


          Reduction in Despatchable Capacity of the Power Station in Equivalent 
          Annual Hours =


         (SIGMA) {[(Supply Capacity Available for Despatch of the Power Station
         - Actual Supply Capacity Available for Despatch of the Power Station) /
         Supply Capacity Available for Despatch of the Power Station] x Number
         of Continuing Hours in Such Period}


          Where:


          Supply Capacity Available for Despatch of the Power Station is the sum
          of the Supply Capacity Available for Despatch of the various Units of
          the Power Station which have already been put into Commercial 
          Operation (see Annex 3).



          Actual Supply Capacity Available for Despatch of the Power Station is
          the sum of the Supply Capacity Available for Despatch actually 
          provided by the various Units of the Power Station which have already 
          been put into Commercial Operation when the reduction in Supply 
          Capacity Available for Dispatch occurs in such Units.


          Number of Continuing Hours in Such Period shall mean the Number of
          Continuing Hours during which the reduction in Supply Capacity
          Available for Dispatch occurs in the various Units of the Power 
          Station which have already been put into operation.


4.6       If in any Year within the term of the Contract the annual cumulative 
total quantity of On-Grid Electricity fails to reach the Normal Take, when the
difference is caused by the failure of the Actual Annual Despatchable Hours of
the Power Station to meet the Annual Planned Despatchable Hours of the Power
Station, the electricity not generated shall be recorded as a short generation
for which Party A shall be liable and which shall be handled in accordance with
Article 8.2.


         Party A's Liability for Short Generation = Annual Normal Take x
         [(Annual Planned Despatchable Hours of the Power Station - Annual
         Actual Despatchable Hours of the Power Station) / Annual Planned
         Despatchable Hours of the Power Station]


         If, pursuant to stipulations in the 'Interconnection and Despatch
Agreement', the reduction in electricity generation and purchase is determined
as being attributable to despatch reasons of the State Despatch Centre, it shall
be recorded as the State Despatch Center's liability for a short despatch of
electricity.


         The reduction in electricity generation by the Power Station due to
reasons caused by Party B's power purchase plan and the downward adjustment of
the output of the Units as required by the power grid, and the failure of the
Units to generate the expected output because of the breakdown of the Dedicated
Transmission Facilities shall be adjusted and compensated as far as possible in
the plans of the current Year. After the above adjustment is made, the portion
of electricity generation falling short of the Normal Take shall be recorded as
Party B's Liability for Short Purchase and shall be handled in accordance with
Article 8.1.


4.7       Before 0930 hours each day, the Power Station shall submit to the 
State Despatch Center a forecast of the Supply Capacity Available for Despatch 
of each Unit for the following day. Pursuant to the monthly generation despatch 
plan and upon liaison with Party B, the State Despatch Centre shall issue before
1700 hours of each day the daily generation despatch plan of the Power Station 
for the following day with a copy to Party B.


4.8       The Power Station shall be operated in compliance with the daily 
generation despatch curves (including such curves as revised in accordance with 
Article 2 of Annex 5) issued by the State Despatch Centre with the active power
fluctuations within the permissible variation range of +/-3%.



          Examinations shall be executed in accordance with the daily generation
despatch curves (including such curves as revised in accordance with Article 2
of Annex 5) on the basis of the real time data which Party A transmits to the
State Despatch Centre. Refer to Annex 5 for the actual method adopted in the
settlement of accounts on the amount of power generated by the Power Station,
and the State Despatch Centre shall record such data at intervals on a daily
basis.


          In the event that any Party discovers at any time the transmitted real
time data inaccurate, such Party may request for examination and calibration and
the real time data shall be corrected in accordance with the results of the
examination and calibration.


4.9       The State Despatch Centre shall inform Party A and Party B in writing 
of the examination results regarding the status of the Power Station's execution
of the generation despatch curves in the preceding month on the fifth working 
day of each month. Any disagreement relating to the examination results raised
by Party A and Party B shall be submitted to the State Despatch Centre before
the 12th of the month. When the said deadline expires and no query is raised, 
the original notice of the examination results shall be deemed to be correct.


          The State Despatch Centre shall send the finalised and audited
generation examination notice of the preceding month to Party A and Party B
before the 20th of each month as the basis for settlement of accounts between
both Parties.


                            Article 5     On-Grid Tariff


5.1       The On-Grid Tariff shall be estimated by Party A in accordance with 
the formulae stipulated in Article 5.4 and Article 5.5 on the basis of the
principles of the Power Supply Costs of the Power Station, timely repayment of
principal and interest on loans, payment of taxes, collection of funds and
guaranteeing of Party A's reasonable profits, on the basis of the FIRR of [***]
on Party A's anticipated Registered Capital during the
Joint Venture Term and on the basis of the Normal Take. The average On-Grid
Tariff during the Joint Venture Term as specified in the Feasibility Study
Report approved by the State Planning Commission is [***] on the
basis of [***] utilisation hours while the actual tariff in
each Year shall be submitted for examination and approval year by year pursuant
to Article 5.6.


5.2       Party A and Party B shall jointly fix the Budgeted Exchange Rate 
(the US Dollar Selling Price set by the People's Bank of China) on the basis of
the trend of the USD/RMB exchange rate fluctuations of the preceding Year and 
use such Budgeted Exchange Rate for the conversion of the USD component of the
On-Grid Tariff into RMB in the estimation of the On-Grid Tariff fully
denominated in RMB. The USD component of the On-Grid Tariff shall constitute the
principal and interest on the foreign currency loans paid by Party A for the
Year and the return on Party A's Registered Capital during the Year. Any
exchange loss or gain due to the difference between the actual exchange rates
during the Year and the Budgeted Exchange Rate shall be adjusted in the next
estimation of the On-Grid Tariff.


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


5.3       The On-Grid Tariff for the electricity generated and delivered to the
Connecting Point prior to the Commercial Operation of any Unit, including the
period of testing and commissioning of the Unit, shall be settled on the basis
of [***].

5.4       After the commencement of Commercial Operation of any Unit, the 
On-Grid Tariff for the On-Grid Electricity generated each Year within the Normal
Take shall be expressed in RMB per KWH, estimated in accordance with the
following formula:

                                          
                            
     On-Grid Tariff                   
     during Commercial  =          [***]
     Operation                                
                                       





         Where:


         (A)  A is the Power Supply Cost of the Power Station (not including
         purchase value added tax), including:


         A1, fuel cost: refers to all the annual budgeted expenses related to
         the purchase of fuels (including coal and oil) for the Power Station,
         including among others management fee, transportation expenses,
         insurance costs, handling charges, transhipment costs and other costs,
         and the gain or loss due to the difference between the budgeted price
         and the actual price for the fuels for the previous year. The coal
         price shall follow the price for coal used in electricity generation in
         Shanxi Province.


         A2, water rate: refers to the annual budgeted expenses for water 
         consumed in power generation by the Power Station.


         A3, electricity purchase cost: refers to the cost for the electricity
         that the Power Station is required to purchase from outside each year
         on the basis of its rated design capacity.


         A4, material costs: refers to the costs of operation and maintenance
         materials consumed each Year for maintaining the operation of the Power
         Station.


         A5, wages and welfare expenses: refers to the wages and welfare
         expenses paid by Party A each Year to its employees.


         A6, depreciation and amortization costs: refers to the depreciation
         cost of the fixed assets and amortization cost of intangible assets and
         other assets, allocated each Year according to relevant stipulations
         after any Unit of the Power Station goes into Commercial Operation.


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


         A7, major repair cost: refers to the annual budgeted cost for major and
         minor repairs of the Units of the Power Station.


         A8, other business management costs: refers to other expenses and costs
         related to the operation, maintenance and management of the Power
         Station each Year, including but not being limited to insurance costs,
         staff education and training costs, business management costs of Party
         A, the adjustment amount for exchange loss or gain for the previous
         Year, costs resulting from changes in law, etc.


         (B)   B is the Financial Expenses, referring to: the sum of interest
         charges, on-lending fees, handling fees, other financial management
         costs according to relevant financial regulations and foreign currency
         exchange loss or gain, incurred each Year on the construction loans and
         the working capital loans of the Power Station.


         The exchange loss or gain shall be: USD Loan Principal repayable by
         Party A for the Year x (Budgeted Exchange Rate - Completion Exchange 
         Rate)


         (C)   C is all relevant taxes, other than the income tax and the value
         added tax, which are payable during the business operation of the Power
         Station according to relevant regulations (State-stipulated taxes or
         local taxes). These taxes shall be incorporated into the Power Supply
         Costs of A1 to A8.


         (D)   D is the Return on Registered Capital and shall be equal to the
         product of (i) during the Joint Venture Term, the anticipated US
         Dollars amount of return over the years calculated on the basis of the
         Normal Take and [***] on Party A's Registered Capital,
         and (ii) the Budgeted Exchange Rate. Such anticipated returns on Party
         A's Registered Capital for each Year are listed in Annex 4.


         (E)   E is the Loan Repayment Profit and shall mean that during the
         repayment of loans by Party A, the portion of the after-tax profit used
         to pay the shortfall in the repayment of the principal of loans payable
         for the Year which the above A6, to be used for loan repayment, is not
         sufficient to cover.


         Loan Repayment Profit = [US Dollar Loan Principal Repayment Payable by
         Party A for the Year x Completion Exchange Rate + RMB Loan Principal
         Repayment Payable by Party A for the Year] - [Depreciation and
         Amortization set forth in Item A6 above]


         The Loan Repayment Profit shall be no less than zero.


         (F)   F is the Fund Allocation and shall mean the accumulation fund,
         the public welfare fund, and other funds for the Power Station
         allocated by Party A in accordance with relevant regulations of the
         People's Republic of China.


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


5.5       The On-Grid Tariff for Excess On-Grid Electricity: In the event that
during the term of this Contract, the total actual purchase and sales of 
electricity for any one Year exceeds the Normal Take, that portion of the 
On-Grid Electricity exceeding the Normal Take shall be paid for on the basis of 
the On-Grid Tariff for Excess On-Grid Electricity.


         The formula for the On-Grid Tariff for Excess On-Grid Electricity shall
be as follows:




On-Grid Tariff
for Excess     =      [***]
On-Grid
Electricity


         The definitions of the terms A, A6, A7, D and F shall be the same as
those provided in Article 5.4.


5.6       The On-Grid Tariff shall be fully denominated in RMB and shall be set
once a year. Party A shall calculate the On-Grid Tariff for the following Year 
in October of each Year; Party A and Party B shall raise through consultation a
proposal on the subject and submit the proposal in mid-November in accordance
with relevant state stipulations to Chief Commodity Prices Administrative
Authorities of the State Council for examination and approval. Party B shall put
forward a proposal on the corresponding Sales Tariff based on the On-Grid Tariff
which Parties A and B have agreed on for submission and submit the proposal in
mid-November in accordance with the same application procedures to Chief
Commodity Prices Administrative Authorities of the State Council for examination
and approval.


5.7       In order to forecast the On-Grid Tariff during the Joint Venture Term,
Party A and Party B shall, promptly following the execution of this Contract and
pursuant to the principles and contents set forth in the above articles, agree
on a financial model and a mechanism to obtain and adjust quantified figures on
factors affecting the calculation of the tariff which shall serve as the basis
for calculating the On-Grid Tariff. Six months prior to the expected Commercial
Operation of the first Unit, Party A shall estimate the On-Grid Tariff for
Commercial Operation of such Unit which, upon approval through the approving
procedures under Article 5.6, shall be the On-grid Tariff for settlement of the
Electricity Fee between Party A and Party B.


5.8       If the On-Grid Tariff calculated on the basis of current external 
factors such as the price level, exchange rate and tax rates during any Year 
exceeds the approved On-Grid Tariff for that Year by more than 2%, which results
in that the approved On-Grid Tariff cannot meet the repayment of either 
(i) principal and interest (including both RMB and US Dollars loans) or (ii) 
anticipated Return on Party A's Registered Capital, Party A and Party B shall 
promptly submit an application for adjustments to the On-Grid Tariff and Sales 
Tariff for the Year and submit it to the state pricing authorities for approval.
Upon approval, such adjustments shall be implemented.



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


                        Article 6 Metering of Electricity


6.1       Party A shall install dedicated energy metering equipment, including 
main meters and check meters on each 500KV outgoing line at the inner side near 
the Connecting Point for the measurement of the On-Grid Electricity that Party B
purchases from Party A. The energy metering equipment installed by Party B at
the incoming side of each 500KV line at San Bao Switchgear Station in Jiangsu
Province shall be used as reference for checking the dedicated energy
measurement.


6.2       The accuracy of the dedicated energy metering equipment shall be no
lower than the accuracy standards related to electric energy meters promulgated
by the State Technology Inspection Bureau as follows:


         Active energy meter :      Grade 0.2


         Reactive energy meter:     Grade 0.5


         Associated current transformer and potential transformer:  Grade 0.2


6.3       The Dedicated energy metering equipment shall be inspected and 
calibrated by an inspection and calibration team established jointly by Shanxi 
Provincial Electrical Testing Centre and Jiangsu Provincial Electrical Testing 
Centre on a regular basis and within a time period as required by the codes of 
electrical metering. The inspection and calibration results shall be sent to 
Party A and Party B respectively. The costs incurred shall be borne by the two 
Parties in relation to the ownership of assets.


6.4      The readings of the aforesaid meters shall be taken and recorded
jointly by Party A and Party B on the first day of each month. The On-Grid
Electricity that Party A transmits to Party B during the preceding month shall
be the sum of the new increments in the readings of the applicable main energy
meters during that month. Such metered number shall be final if no fault or
omission exists. In case that the main energy meters fail to measure the On-Grid
Electricity accurately, the main energy meters and the check energy meters shall
be inspected separately. If the check energy meters prove to be accurate, the
readings of the check energy meters shall be the data used for calculating the
On-Grid Electricity.


6.5       Party A shall notify Party B promptly of the failure of the Dedicated 
energy metering equipment. If both main meters and check meters fail at the same
time, the measurement of On-Grid Electricity during the failure period can be 
resolved through consultation between both Parties by referring to other energy 
meters or be resolved through consultation with State Power Despatch and 
Communication Centre in accordance with despatch records.


6.6       If any Party finds out at any time that the readings of a Dedicated
energy metering equipment are not accurate, such Party may propose an interim
inspection and calibration.



6.7       Party A shall install telemetry equipment in the Power Station and 
make them having the function of transmitting real time information about the 
on-grid capacity and On-Grid Electricity of the Power Station to Party B and 
State Power Despatch and Communication Centre.


                            Article 7 Electricity Fee


7.1       Within the first five (5) working days of each month, Party A shall 
deliver to Party B the first invoice, which shall specify the following items:


         (1)   40% of the On-Grid Electricity, read according to Article 6.4,
         which Party A has transmitted to Party B in the preceding month.


         (2)   the applicable On-Grid Tariff.


         (3)   Electricity Fee payable by Party B to Party A = (1) x (2).


         Prior to the twentieth (20th) day of each month, Party A shall deliver
         to Party B the second invoice which shall specify the following items:


         (1)   30% of the On-Grid Electricity, read according to Article 6.4,
         which Party A has transmitted to Party B in the preceding month.


         (2)   the applicable On-Grid Tariff.


         (3)   Electricity Fee payable by Party B to Party A = (1) x (2).


         Before the end of each month Party A shall deliver to Party B the
month-end invoice in accordance with the notice of verification of power
generation in the proceeding month examined and verified by the State Despatch
and Communication Centre and, the account settlement notice of the Power Station
in the preceding month issued by Party B. The amount payable in such invoice
shall be:


         (The Effective On-Grid Electricity which Party A transmitted to Party B
in the preceding month - the electricity already paid for in the first and
second invoices) x the applicable On-Grid Tariff pursuant to Article 5 +/-
the amount stipulated in Article 7.6.


7.2      The Electricity Fee shall be paid in three instalments in each month:


         (1)  on the 5th working day of each month, Party B shall remit the
         Electricity Fee payable by Party B that is specified in the first
         invoice provided by Party A for the preceding month to the China
         Construction Bank account designated by Party A.


         (2)  on the 20th day of that month, Party B shall remit the Electricity
         Fee payable by Party B that is specified in the second invoice provided
         by Party A to the China Construction Bank account designated by Party
         A.



         (3)  before the end of the month, Party B shall remit the Electricity
         Fee payable by Party B that is specified in the month-end settlement
         invoice provided by Party A to the China Construction Bank account
         designated by Party A .


7.3       Party B shall pay Party A the Electricity Fee in accordance with 
Article 7.2. In the event that Party B disputes the Electricity Fee in the 
month-end settlement invoice provided by Party A, Party B shall nevertheless pay
the non-disputed amount; upon resolution of the dispute, Party B shall pay the
disputed amount immediately. Party B shall pay Party A late payment fee in
accordance with Article 8.4 for the delayed amount payable because of the
dispute.


7.4       Party A shall issue to Party B the value added tax invoice following 
the payment schedule and in accordance with tax laws.

7.5       When the actual cumulative Effective On-Grid Electricity that
Party A transmits to the Connecting Point during the current year exceeds the
Normal Take for such Year ('Excess On-Grid Electricity'), Party B shall pay the
Electricity Fee to Party A calculated on the basis of the On-Grid Tariff for
Excess Electricity as stipulated in Article 5.5, but after deduction of the
amount payable to Party B calculated according to the following formula:



The Amount
Payable to =     [***]
Party B
                                    


         Where:


         D and F shall have the same definitions as in Article 5.5.


7.6       After the Units of the Power Station enter into Commercial Operation, 
the results of verification of generation for account settlement of the Power
Station as stipulated in Annex 5 shall be settled together with the Electricity
Fee by Parties A and B on a monthly basis. Refer to Annex 5 for specific methods
of account settlement.


                  Article 8 Breach of Contract and Compensation


8.1       During the term of this Contract, Party B shall guarantee that the 
Effective On-Grid Electricity procured by Party B at the Connecting Point in 
every Year shall be no less than the Normal Take. In the event that at the last 
day of any Year within the Contract term, the actual cumulative Effective 
On-Grid Electricity procured by Party B for the whole Year is less than the 
Normal Take, Party B shall pay Party A within forty five (45) days after the end
of such Year an amount as follows:


                                      [***]


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


                                      [***]


8.2       During the term of this Contract, Party A shall guarantee that the
Effective On-Grid Electricity delivered by Party A to Party B each Year shall be
no less than the Normal Take. In the event that at the last day of any Year 
within the Contract term, the total cumulative Effective On-Grid Electricity for
the whole Year is less than the Normal Take, and Party A's Liability for Short 
Generation is finalized pursuant to Article 4.6, Party A shall pay Party B 
within forty five (45) days after the end of the Year a compensation equal to 
the portion of the shared costs for principal and interest repayment on the 
Dedicated Transmission Facilities and for the Power Supply Costs, 
(after deduction of the transmission line loss and relevant taxes), 
corresponding to Party A's Liability for Short Generation; the compensation to
be allocated to the provincial transmission facilities shall be exercised in 
accordance with the replies from relevant government authorities.


8.3       In case of any of the following events, Party A or Party B shall pay 
each other the liquidated damages for late completion. Both Parties have 
covenanted that the liquidated damages shall be on a reciprocal basis and shall 
be equal in amount. If the insurance is covered, the insurance indemnity shall
be deducted.


(1)      In the event that Party B fails to complete the construction of
         Dedicated Transmission Facilities before the date provided for in
         Article 2.4, which causes the failure of the Units to carry forth the
         interconnected commissioning as scheduled, Party B shall, for each day
         of delay, indemnify Party A the 'Loan Interest Payment Amount' as
         stipulated in Article 8.3 (3) (a), and pay in advance for Party A the
         'Loan Principal Repayment Amount' as stipulated in Article 8.3 (3) (b)
         together with interest thereof;


(2)      In the event that Party A fails to complete the construction of a Unit
         in accordance with the schedule provided for in Article 2.2, which
         causes a delay in the delivery of electricity to Party B (but not due
         to the delay in the completion of Dedicated Transmission Facilities and
         Provincial Transmission Facilities), Party A shall, for each day of
         delay of Commercial Operation of such Unit, be liable to indemnify
         Party B the 'Loan Interest Payment Amount' as stipulated in Article 8.3
         (3) (a), and pay in advance for Party A the 'Loan Principal Repayment
         Amount' as stipulated in Article 8.3 (3) (b) together with interest
         thereof.


(3)      Methods of calculation and payment of the liquidated damages:


         a, The 'Loan Interest Payment Amount' shall mean the total amount of
         interest payable for each day of delay on all the loans to such delayed
         Unit;


         b, The 'Loan Principal Repayment Amount' shall mean the total amount of
         principal due and payable for each day of delay on all the loans to
         such delayed Unit;


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


         c, The Loan Interest Payment Amount and the Loan Principal Repayment
         Amount shall be established pursuant to the loan principal repayment
         and interest payment component included in the On-Grid Tariff
         corresponding to the Year of Commencement of Commercial Operation of
         the Unit as estimated and submitted by Party A;


         d, The indemnified Party shall repay in full the Loan Principal
         Repayment Amount paid in advance to the defaulting Party at the latest
         within one (1) year after the Date of Commencement of Commercial
         Operation of Unit Six;


         e, The liquidated damages provided for in this Article shall be paid on
         a weekly basis on the first business day of the bank of each week
         following the guaranteed completion dates as stipulated in Article 2.2
         and Article 2.4, with the last such payment to occur on the actual
         completion date.


8.4       In the event that Party B fails to pay Party A the Electricity Fee in
accordance with the schedule provided for in Article 7.3, Party B shall pay
Party A the late payment fee calculated from the next day following the due day
to the day on which the bank remits the fund. The late payment fee shall be
calculated at a rate of [***] per day on the delayed amount.


                               Article 9 Insurance


9.1       Party A shall purchase and maintain all types of insurance related 
with the operation, maintenance and management of the Power Station. Annex 6 
details the types of insurance required.


                            Article 10 Force Majeure


10.1     Definition of Force Majeure:


         In this Contract an Force Majeure Event refers to any event which can
not be controlled, predicted, and the occurrence and consequences of which can
not be overcome by the affected Party to the Contract. Such events prevent the
affected Party from performing its obligations under the Contract, or makes the
performance of such obligations impossible, such events including war, strike,
flood, windstorm, fire, earthquake, thunderbolt, epidemic diseases, etc.


10.2      The failure of a Party to fulfill any of its obligations hereunder 
shall not be considered to be a breach of, or default under this Contract and 
the Party concerned shall not be liable to any liquidated damage insofar as such
inability arises from an event of Force Majeure, provided that the Party
affected by such an event has taken reasonable measures to mitigate effects of
such event of Force Majeure, all with the objective of carrying out the terms
and conditions of this Contract.


10.3      Notification obligation


(1)      The Party claiming Force Majeure shall give notice to the other Party
         of any event of Force Majeure as soon as practical, but no later than
         seven (7) days after the date on which such Party gets aware or should
         have reasonably got aware of the commencement of such event, and shall


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


         provide the other Party with valid evidences of the Force Majeure event
         within a reasonable period of time after cessation of such Force
         Majeure event. Such evidences shall be issued by a notary organization
         or relevant authority at the location of the Force Majeure event.
         Notwithstanding the above, if the event of Force Majeure results in a
         breakdown of communication rendering it not reasonably practicable to
         give notice within the applicable time limit specified herein, then the
         Party claiming Force Majeure shall give such notice as soon as
         reasonably practicable after the reinstatement of the communications,
         but no later than one day after such reinstatement .


(2)      The Party claiming Force Majeure shall give notice to the other Party 
         of


                  1.     event of Force Majeure;


                  2.     the commencement and cessation time of the event of 
                  Force Majeure; and


                  3.     the scope,  content and duration of the effects of such
                  event of Force  Majeure on the  enjoyment  by such  affected 
                  Party of its rights or  performance  of its  obligations
                  hereunder.


10.4     Obligations to Mitigate the Damages


         The Parties shall use all their reasonable efforts to mitigate the
effects of any event of Force Majeure and to jointly develop and implement a
plan of reasonable measures (in accordance with ownership of property) to remove
the effects of such event of Force Majeure. The Parties shall continue to
perform other obligations as provided for in this Contract that are not affected
by the event of Force Majeure.


                              Article 11 Assignment


11.1      Party B shall be entitled to transfer this Contract to a third Party,
subject to such third Party providing a financial guarantee stating that its
financial status is at least as good as that of Party B and, subject also to the
approval of Party A and its lenders. That third Party shall be the successor to
all of Party B's rights and obligations under this contract.


11.2      Party A shall obtain Party B's agreement to the assignment of its 
rights and obligations under this Contract to a third party other than the 
Project lenders.


11.3      When Party A proposes to transfer the ownership of all the assets of 
the Power Station at any time after the Unit 6 has been completed, Party B shall
have the first right of refusal as equally as the Project lenders do.


11.4      Upon the assignment by any one Party of its rights and obligations 
under this Contract, the transferor shall guarantee that the transferee shall
continuously perform this Contract, and shall not impose 





on the other Party any additional legal obligations or obligations beyond this
Contract. Such assignment shall be subject to the approval of the original
examination and approval authority.


                     Article 12 Contract Term & Termination


12.1      The term of this Contract shall be twenty (20) years starting from the
date of issuance of business license to Party A. Should the Joint Venture Term
of Party A be extended, both Party A and Party B may choose to:


(1)      agree to extend the term of this Contract;


(2)      negotiate new terms and conditions for this Contract.


12.2      Should the purchase and sale of electricity be interrupted due to an 
event of Force Majeure during the term of this Contract, either Party shall have
the right to extend the term of this Contract and the corresponding period for
the calculation of Normal Take pursuant to Article 1.9, with the terms and
conditions of this Contract unchanged. The extension of the term of this
Contract shall be equal to the period that the purchase and sale of electricity
was interrupted due to the event of Force Majeure.


12.3      In case of extension of this Contract pursuant to Article 12.1 and
Article 12.2, it shall be submitted to the original examination authority or
competent examination authority for approval. No Party shall declare to
terminate this Contract unilaterally.


              Article 13 Governing Laws and Settlement of Disputes


13.1      This Contract shall be governed and interpreted by the laws of 
People's Republic of China.


13.2      Settlement of Dispute: Party A and Party B shall pursue the following
procedures in the event of any dispute between the Parties concerning the
performance of this Contract:


(1)      Disputes shall be resolved through a conciliation and mediation
         committee. Party A and Party B shall each recommend two mediators to
         form a joint conciliation and mediation committee with the aim of
         seeking resolution through friendly consultation. Within one month
         after the dispute is submitted to the conciliation and mediation
         committee, the conciliation and mediation committee shall provide a
         resolution opinion to the Parties. Should either of the Parties not
         accept the resolution proposal provided, the dispute shall be submitted
         for arbitration in accordance with provisions of this Article.


(2)      In the event that the dispute is not resolved in accordance with
         Article 13.2 (1) above within sixty (60) days after any Party notifies
         the other Party of the dispute in writing, either party may submit the
         dispute in question to the China International Economic Trade
         Arbitration Committee for arbitration in Beijing pursuant to the
         arbitration rules prevailing at the time the application for
         arbitration being filed. In the event that China International Economic
         Trade arbitration Committee has no power of jurisdiction over such
         dispute, the dispute shall be submitted to Beijing Municipal





         Arbitration Committee for arbitration in Beijing pursuant to the
         prevailing arbitration rules. The arbitration award from either of the
         two said arbitration committees shall be final and binding upon the two
         Parties.


             Article 14 Effectiveness of the Contract and Amendments


14.1      This Contract shall become effective upon approval by relevant state
examination and approval authorities to which Party B shall submit this Contract
upon execution and seal by the validly authorised representative of the two
Parties.


14.2      Changes in national and local laws and regulations shall not be 
regarded as a Force Majeure event. In the event of any change in national or
local laws or regulations, this Contract shall be amended accordingly. Any
amendment of this Contract shall first have the unanimous agreement of Party A
and Party B through consultation and be executed and sealed by the validly
authorised representatives of the two Parties and come into effect upon the
approval of the original examination and approval authority.


14.3      This Contract shall be written in Chinese and English, with both 
language texts being equally authentic. In case of any conflict between the
Chinese and English versions, the Chinese version shall govern. This Contract
shall have ten originals with Party A and Party B each keeping five. There shall
be twenty duplicates.






Party A: Yangcheng International Power Generating Co. Ltd.





Representative: [Signature Illegible]


Position:








Party B: Jiangsu Provincial Power Company.





Representative:  [Signature Illegible]


Position:





Venue of Signing:   Beijing, the People's Republic of China


Date:               January _____, 1997








                                     Annex 1


                            Power Station or Project


         Yangcheng Power Station is located in Beiliu Township of Yangcheng
County, Shanxi Province, 25 kilometres to the east of Jincheng City and 10
kilometres to the west of Yangcheng city and just 0.4 kilometres to the south of
Beiliu Township.


         The natural elevation of the ground of the Power Station is 648-693 m.


         The first phase of the Power Station is to build a 6x350MW anthracite
fired Units with a total installed capacity of 2100 MW and, with room for
further expansion. The turbine island and the boiler island of the main plant
house of the Power Station are respectively imported from Siemens Company of
Germany and the Foster Wheeler company of United States. The BOP portion of the
Power Station is locally designed and uses local equipment (except for
pneumatic ash handling equipment and water supply pump station equipment),
including mainly coal conveying, oil supply, ash disposal, water supply,
recycling water, chemical water, electrical step-up substation, start-up power
source, parasitic load, communication, repair, monitoring and other auxiliary
production facilities.


         Offsite project mainly includes the following: water source, make-up
water pump and pipelines, ash handling and ash water recovery pipelines, ash
yard, Dedicated railway, coal transporting and access road to the Power Station,
start-up power source transmission and transformation facilities, residential
quarters (external to the Power Station) in Jincheng city, administrative area
in the front part of the Power Station and offsite communication and remote
control system, etc.


         For the Property Right Boundary Line of the Power Station and the 500KV
transmission facilities, see Annex 2.







                                     Annex 2


                        Dedicated Transmission Facilities


         The electricity produced by the Power Station shall be totally
transmitted to Jiangsu Province in the form of Dedicated station, Dedicated
lines and Dedicated supply. The Dedicated Transmission Facilities in association
with the Power Station shall start from the Property Right Boundary Point and
pass through the provinces of Shanxi, Henan, Shandong and Anhui to Huaiyin of
Jiangsu Province (a distance of about 755 kilometers). Details of the whole
transmission line project of the Power Station are as follows:


1.        Two switching stations to be newly constructed: the mid-way switching
station (for three incoming lines and two outgoing lines, total five circuits)
at the crossing point of the Yellow River and the Sanbao Switching Station, at
Xuzhou city of Jiangsu province (with two incoming lines and three outgoing
lines, total five circuits);


2.        A substation to be expanded in Huaiyin, Jiangsu Province with one 750
MVA main transformer;


3.        The extension for one 500 kV panel at the Runzhuang Substation in 
Jiangsu Province.


4.        Three circuits from the Power Station to the mid-way switching
station to be constructed, approximately 3 x 262 km long on one double circuit
tower and one single circuit tower;


          Two circuits from the newly constructed mid-way switching station to
Sanbao Switching Station to be constructed, 2 x 268 km long on a double circuit
tower, with serial compensation equipment of 2 x 500 MVAR;


          One single circuit from the newly constructed Sanbao Switching Station
to Runzhang Substation, 50 km long single circuit;


          Two circuits on a double circuit tower from the newly constructed
Sanbao Switching Station to Huanyin Substation, 2 x 230 km long on a double
circuit tower;


          One crossing over the Yellow River with a circuit length of 2 x 4 km;


5.        Associated parallel resistors, reactive power compensation equipment
and corresponding remote control, communication and protective relay equipment
to be built;


          Drawing No. 0-1 shows the one-line diagram of the Transmission 
Facilities.


          Drawing No. 0-2 shows the one-line diagram of the stations and 
substations.


          Drawing No 0-3 shows the Property Right Boundary Point between the
Power Station and Transmission Facilities.




                                [GRAPHIC OMITTED]

Point A to the direction of the transmission line falls within the scope of 
construction of the dedicated transmission facilities including the terminal
tower, while the others fall within the scope of the Power Station.





                                     Annex 3


              Performance Indices and Testing Results for the Units





Relevant performance test items, indices and test results of the Units are shown
as follows:




------ ------------------------------------------------------- ------------------- -----------------------

       Performance Test items                                  Design Value        Actual Test Value
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

                                                                         

1      maximum continuous output of the Unit (MW)              369.6
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

2      rated capacity (MW) of the Unit                         350
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

3      minimum non-oil stable burning load (MCR) of the Unit   50%


       non-oil stable burning Load (ECR) of the Unit           --


------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

4      load adjustment rate of the Unit                        5% /MIN


                              50%~100%MCR
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

                              below 50% MCR                    3% /MIN
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

5      Parasitic loan of the Unit under ECR working condition  less than or equal
                                                               to 6%
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

6      rated  power  factor  of the Unit  under  ECR  working  0.85
       condition
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

7      coal  consumption  (kilogram / KWH)  of the  Unit in    330
       power generation
------ ------------------------------------------------------- ------------------- -----------------------
------ ------------------------------------------------------- ------------------- -----------------------

8      Unit supply capacity (MW):


       Rated power factor of the Unit x (1 - parasitic load
       of the Unit under ECR working conditions) - main 
       transformer and busbar power loss
------ ------------------------------------------------------- ------------------- -----------------------








                                     Annex 4


       Returns on Registered Capital (Anticipated Revenue) Over the Years



Unit: ten thousand US Dollars


Year       Registered Capital Contributions       Returns on Registered Capital


 1                     [***]                                    [***]
 2                     [***]                                    [***]
 3                     [***]                                    [***]
 4                     [***]                                    [***]
 5                     [***]                                    [***]
 6                     [***]                                    [***]
 7                     [***]                                    [***]
 8                     [***]                                    [***]
 9                     [***]                                    [***]
10                     [***]                                    [***]
11                     [***]                                    [***]
12                     [***]                                    [***]
13                     [***]                                    [***]
14                     [***]                                    [***]
15                     [***]                                    [***]
16                     [***]                                    [***]
17                     [***]                                    [***]
17                     [***]                                    [***]
18                     [***]                                    [***]
19                     [***]                                    [***]
20                     [***]                                    [***]

Note:


(1) The financial internal rate of return (FIRR) on the above Registered Capital
contribution and Returns on Registered Capital shall be [***] on the
basis of the Normal Take. If the amount and timing of Registered Capital
actually contributed are different from the figures listed in the above table,
the returns on Registered Capital shall be adjusted, while the financial
internal rate of return remains at [***].


(2) The Returns on Registered Capital (Anticipated Revenue) in the table are
applicable to the formula in the calculation of On-Grid Tariff set forth in
Article 5.4.



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




                                     Annex 5


              Method of Account Settlement for the Amount of Power
                         Generated by the Power Station



Article 1. Account settlement for monthly generated amount of power which
deviates from the plan.


a.       the monthly generation plan (including amendments) as issued by the
         State Despatch Centre shall prevail.


b.       Factors leading to the revision of the monthly generation plan are as 
         follows:


1.       Factors regarding the variation of the planned maintenance schedule of
         the generating units shall be based on the monthly planned maintenance
         schedule as issued by the State Despatch Centre, any change in the
         maintenance schedule shall be submitted to the State Despatch Centre
         for approval and the monthly generation plan shall be adjusted as
         determined by the State Despatch Center.


2.       The amount of power  generated  which is affected by the outage of  
         generating units as required by the grid shall be adjusted.


3.       Other adjustment factors: reduced power generation resulting from 
         the  disconnection of the Power Station or failure to generate the 
         expected amount of electricity which is caused by transmission line
         breakdown not attributable to the Power Station.


c.      In the event of any accident in any month in the generating units of the
Power Station or any maintenance of electrical equipment (including emergency
maintenance and maintenance extension without the approval of the State Despatch
Centre) which is not included in the monthly generation plan and which affects
power generation, it shall be recorded as monthly unplanned outage hours of the
Power station.


         Monthly Unplanned outage Hours = (SIGMA) (Unit accident outage hours +
         Unit interim maintenance outage hours + Unit planned maintenance
         extended outage hours).


         The Monthly Unplanned Outage Hours shall be added up cumulatively month
by month, if the Annual Actual Equivalent Despatchable Hours of the Power
Station fail to reach the requirement as stipulated in Article 4.5 herein, so
that the annual cumulative Effective On-Grid Electricity in such Year fails to
reach the annual Normal Take, then Party A shall compensate Party B pursuant to
Article 8.2 herein.


d.       If the Power Station finds it difficult to execute the verified peaking
quota, it shall submit a written application to the State Despatch Centre and
shall solicit consent from Party B so that the State Despatch Centre can make
necessary arrangement in the monthly and daily generation plans, but the Power
Station 





shall pay to the Jiangsu Power Grid a peaking compensation fee of RMB
5,000 Yuan for less generation of 10 MW each day during the valley period.


Article 2. The daily generation despatch curve (including amendment) issued by
the State Despatch Centre is the basis for the amount of electricity generated
by the Power Station and accounts settlement for the amount of electricity
generated. The State Despatch Centre may revise, after having consulted with
Party B, the daily generation despatch curve of Yangcheng Power Station in the
light of the following different conditions:


1.       the requirement for frequency modulation, peaking and planned power  
allocation on the part of the Jiangsu Power Grid.


2.       the communication line between the Jiangsu Power Grid and other 
provincial grids is not capable of taking the expected power load, nor is the 
out-going line of Yangcheng Power Station.


3.       temporary maintenance of approved equipment during valley load and 
mid-range load periods.


4.       temporary maintenance of approved generation units (including 
auxiliaries).


5.       accident outage of the Power Station


6.       extension of the approved planned maintenance of the generating units.


7.       in the event of force majeure.


8.       other causes acknowledged by the State Despatch Centre.


Article 3. Economic settlement of daily output rate and amount of electricity
which deviates from the plan.


a.       the planned daily  generation  despatch curve (including  amendments)
issued by the State Despatch Centre shall govern the planned daily generation 
of the Power Station.


b.       The active power output rate of the Power Station shall be sampled at
an interval of every 15 minutes, totaling 96 sampling points per day, an error
exceeding +/- 3% shall be recorded as an unqualified point if compared with the
corresponding planned value (when the values recorded during the two hours
prior to and after the planned value are different, then the quartering of the
differential value shall be taken and be progressively increased to or decreased
from the hour values).


c.       The unqualified points for the active power output of the Power Station
shall  be  settled economically in accordance with the following standards:


1.       if the number of unqualified points is less than the number of monthly
         examination points by 5%, the Jiangsu Power Grid shall pay the Power
         Station a bonus at the rate of RMB 600 per bonus point.





         Bonus points = monthly examination points x 5% - unqualified points.


2.       if the unqualified points exceed the examination points by 5-10% 
         inclusive,  the Power Station shall compensate the Jiangsu Power Grid
         at the rate of RMB 100 per unqualified point.


3.       if the  unqualified  points exceed the  examination  points by 10-20% 
         inclusive, the Power Station shall compensate Jiangsu Power Grid at the
         rate of RMB 200 per unqualified point.


4.       if the unqualified points exceed the examination points by over 20%,
         the Power Station shall compensate the Jiangsu Power Grid at the rate
         of RMB 400 per unqualified point.


d.       The actual generation of the Power Station shall be sampled at an
interval of five minutes, totaling 288 sampling points per day, the error
exceeding +/- 3% shall be regarded as a deviation from the daily generation plan
which shall be settled economically in accordance with the following standards:


1.       If the error is within +/-3%, the excess and deficit generation may be
         offset in the corresponding periods that day; if there is still excess
         generation after offsetting excess and deficit generation in the valley
         and mid-range periods, the electric energy is not counted and the
         Electricity Fees are not paid; if there is still deficit generation
         after offsetting in the peak period, the Power Station shall compensate
         Jiangsu Power Grid in accordance with the mutually allocating tariff
         for the peak period between provincial grids of the East China Power
         Grid.


2.       If the excess generation deviates from the plan by more than +3% in the
         valley period, in addition to not counting the electric energy and not
         paying the Electricity Fees, the Power Station shall compensate the
         Jiangsu Power Grid in accordance with the tariff which is 150% as much
         as the mutually allocating tariff for the valley period between
         provincial grids of the East China Power Grid.


3.       if the excess generation deviates from the plan by more than +3% in the
         mid-range period, in addition to not counting the electric energy and
         not paying the Electricity Fees, the Power Station shall compensate the
         Jiangsu Power Grid 100% as much in accordance with the mutually
         allocating tariff for the mid-range period between provincial grids of
         the East China Electric Power Grid.


4.       If the short generation deviates from the plan by more than -3% in the
         peak period, the Power Station shall compensate the Jiangsu Power Grid
         in accordance with the tariff which is 200% as much as the
         mutually-allocating tariff for the peak period between provincial grids
         of the East China Power Grid.


Article 4. The division of generation periods


a.       It is only divided into the peak period and the valley period from 1st
July to 30th September each year.





         where,


         the peak period : 0800 - 2200 hours


         the valley period : 2200 - 0800 of the following day


b.       It is divided into the peak period, the mid-range period and the valley
period from 1st January to 30th June and from 1st October to 31st December.


         where,


         the peak period : 0800 - 1100 hour and 1700 - 2200 hour


         the mid-range period : 1100 - 1700 hour


         the valley period : 2200 - 0800 of the following day


Article 5. The document published by the East China Power Administration shall
be taken as the standard for the inter-provincial mutually-allocating power
price of East China Power Grid for the peak load, the mid-range load and the
valley load periods.


Article 6. Prior to 25th of each month, Jiangsu Provincial Power Company shall
deliver to the Power Station the Bill of Account Settlement on Power Generation
of the Power Station in the preceding month and shall settle the accounts when
it pays the On-Grid Electricity Fees to the Power Station before the end of the
month in accordance with this Method and the Power Purchase Contract entered
into by and between the Yangcheng International Power Generating Company and the
Jiangsu Provincial Power Company.


Article 7. If the change in the method of check out in the East China Power Grid
leads to modifying the method for economic settlement of dispatching power
generation of the Power Station by the Jiangsu Provincial Power Company, this
method shall be correspondingly revised.






                                     Annex 6


                                    Insurance


         Party A shall purchase or cause to be purchased the following insurance
for each Unit and shall maintain the insurance at full effectiveness from the
commencement of Commercial Operation of Unit 1 until the expiration of the Joint
Venture Term:


1.       Property All risks insurance:


         Scope of Coverage:         tangible losses or damages to buildings, 
         machinery, inventories, fixed installation, spare parts and all other
         personal properties which are structured together to form the Power
         Station, including but not being limited to the losses or damages
         resulting from the risks listed below: fire, lightning, explosion,
         self-ignition, thunderstorm, snow-storm, flooding, typhoon, damage by
         water, riot, strikes, willful damage, earthquakes, tsunamis, collapse
         and/or the loss of stored goods in storage tanks.


         Insured Amount:            the full value for a repurchase of the 
                                    insured items.


2.       Insurance for outage due to breakdown of machinery


         Scope of Coverage:         sudden and unforeseen tangible losses or 
                                    damages to all machinery, plant house,
                                    boilers, ancillary equipment which are
                                    structured to form the Power Station due to
                                    the following causes, including but not
                                    being limited to breakdown of machinery and
                                    electrical equipment, collapse and explosion
                                    of boiler and pressurized vessel, electrical
                                    short-circuit, improper vibration and
                                    calibration, overloading and over-voltage,
                                    abnormal tension, centrifugal force,
                                    breakdown in protection and regulation
                                    equipment, overheating or collision or other
                                    similar causes.


         Insured Amount:            The value for the repurchase of the insured
                                    machines, station houses, boilers and
                                    others.


3.       Third Party Liability Insurance


         Scope of Coverage:         property losses or personnel casualties  
                                    to third parties that Party A is required to
                                    be liable legally in the business operation
                                    and maintenance of the Power Station by the
                                    JV Company.


         Insured amount:            The maximum insurance amount for each 
                                    accident is RMB 200,000 Yuan. The number of
                                    accidents insured is not limited.


         Insured Person:   The Joint Venture Company