Support Contract - AES Tian Fu Power Co. Ltd. and Chengdu AES Kaihua Gas Turbine Power Co. Ltd.


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



                                SUPPORT CONTRACT



                                     BETWEEN



                       AES TIAN FU POWER COMPANY (L) LTD.



                                       AND



                 CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.





                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.  Definitions and Principles of Construction.................................1

2.  Amount and Terms Of Loans..................................................1
         2.1.  Loans ..........................................................1
         2.2.  Notes ..........................................................1
         2.3.  Interest Payments ..............................................2
         2.4.  Mandatory Repayments of Principal ..............................2
         2.5.  Optional Term Loan Prepayments .................................3
         2.6.  Other Amounts ..................................................3
         2.7.  Payments to the Arranger; Application of Proceeds ..............3

3.  Loans .....................................................................3
         3.1.  Method of Borrowing; Transfer of Funds .........................3
         3.2.  Conditions to all Loans ........................................4
         3.3.  Conditions to First Construction Loan ..........................4
         3.4.  Conditions to Additional Construction Loans ....................5
         3.5.  Conditions to the Term Loan ....................................5

4.  Representations and Warranties of the Company .............................6
         4.1.  Corporate Existence and Power ..................................6
         4.2.  Authorization; Contravention ...................................6
         4.3.  Binding Effect .................................................6
         4.4.  Financial Information ..........................................6
         4.5.  Litigation .....................................................7

5.  Covenants of the Company ..................................................7
         5.1.  Existence ......................................................7
         5.2.  Notice of Certain Events .......................................7
         5.3.  Delivery of Financial Statements and Other Reports .............7
         5.4.  Insurance ......................................................8
         5.5.  Government Rules and Governmental Approvals ....................8
         5.6.  Performance of Project Documents ...............................8
         5.7.  Construction and Operation of the Power Station ................8
         5.8.  Environmental Compliance .......................................8
         5.9.  Use of Proceeds ................................................9
         5.10. Payment of Taxes and Claims ....................................9
         5.11. Event of Loss ..................................................9
         5.12. Maintenance of Books and Records; Inspection by the Arranger ...9
         5.13. Recording of Financing Documents ...............................9
         5.14. Instruments of Further Assurance ...............................9
         5.15. Issuance of Additional Debt ....................................9


         5.16. Liens .........................................................10
         5.17. Nature of Business ............................................10
         5.18. Modification of Agreements ....................................10
         5.19. Guarantees ....................................................10
         5.20. Prohibition on Fundamental Changes ............................10
         5.21. Prohibition on Disposition of Assets ..........................11
         5.22. Transactions With Affiliates ..................................11
         5.23. Power Purchaser's Assignment ..................................11
         5.24. Notice to the Arranger ........................................11

6.  Events of Default:  Remedies .............................................11
         6.1.  'Event of Default' Defined ....................................11
         6.2.  Exercise of Remedies ..........................................14
         6.3.  Collection of Indebtedness by the Arranger; 
                 Deficiency Judgment .........................................14
         6.4.  Application of Proceeds of Collateral .........................14

7.  Intercreditor Arrangements................................................15
         7.1.  Borrowings and Repayments......................................15
         7.2.  Pari Passu.....................................................15
         7.3.  Amendment or Assignment........................................15

8.  Miscellaneous ............................................................15
         8.1.  Benefit of Agreement; Partial Invalidity ......................15
         8.2.  Governing Law .................................................16
         8.3.  Friendly Consultations ........................................16
         8.4.  Arbitration ...................................................16
         8.5.  Continuing Rights and Obligations .............................16
         8.6.  Enforcement of Award ..........................................17
         8.7.  Waiver of Sovereign Immunity Defense ..........................17
         8.8.  Remedies Cumulative; Delay or Omission Not to Impair Remedies .17
         8.9.  Amendment or Waiver ...........................................17
         8.10. Notices .......................................................17
         8.11. No Oral Agreement .............................................18
         8.12. Counterparts ..................................................18
         8.13. Verification and Approval by the Chengdu SAEC .................18

Annex A    DEFINITIONS
Annex B    COMMITMENTS

Exhibit 1  Form of Construction Note
        Schedule A
Exhibit 2  Form of Term Loan Note
        Schedule A
Exhibit 3  Request for Borrowing






            This SUPPORT CONTRACT, dated as of August 12, 1996 (the 'Contract'),
is between AES Tian Fu Power  Company (L) Ltd.,  a company  organized  under the
laws of Labuan (the  'Arranger'),  and Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd., a Sino-foreign joint venture company established under the laws of the PRC
(the 'Company').

                                    RECITALS

            WHEREAS,  the  Company  desires  to  borrow  funds  to pay  for  the
construction and operation of the Power Station; and

            WHEREAS,  the  Arranger  pursuant to the Joint  Venture  Contract is
willing,  subject to the terms and conditions contained herein, to make loans to
the Company;

NOW THEREFORE,  in consideration of the mutual promises and covenants  contained
herein,  the  receipt  and  sufficiency  of which is  hereby  acknowledged,  the
Arranger and the Company hereby agree as follows:


            1. Definitions and Principles of  Construction.  For all purposes of
this Contract, (i) capitalized terms used but not otherwise defined herein shall
have the  meanings  set  forth in Annex A  hereto,  and (ii) the  principles  of
construction set forth in Annex A shall apply for purposes of this Contract.


            2.   Amount and Terms Of Loans.

            2.1. Loans.

                 (a) Construction  Loans.  The Arranger  agrees,  subject to and
upon the terms and  conditions  set forth  herein,  to make loans to the Company
from time to time on any  Business  Day  during  the  Construction  Period in an
aggregate amount not to exceed at any time outstanding the Arranger's Commitment
(each such loan, a 'CONSTRUCTION  LOAN').  Each borrowing of Construction  Loans
hereunder shall be in an aggregate amount of US$500,000 or an integral  multiple
of  US$100,000 in excess  thereof.  Once repaid,  Construction  Loans may not be
reborrowed.

                 (b) Term Loan.  The  Arranger  agrees,  subject to and upon the
terms and  conditions  set forth  herein,  to make a loan to the  Company on the
Mandatory  Repayment  Date in an aggregate  amount not to exceed the  Arranger's
Commitment  (the 'Term  Loan').  The Term Loan  borrowing  shall be in an amount
equal to the aggregate  outstanding  principal amount of Construction Loans plus
accrued and unpaid interest thereon,  subject to the limitation in the preceding
sentence. Once prepaid or repaid, Term Loans may not be reborrowed.

            2.2. Notes.

                 (a)  The  Company's  obligation  to pay  the  principal  of and
interest on the  Construction  Loans shall be  evidenced  by a  promissory  note
substantially  in the  form of  Exhibit  1  hereto  in an  amount  equal  to the
Commitment,  completed in  accordance  with the terms of this  Contract and duly
executed, issued and delivered by the Company (the 'Construction Loan Note').

                 (b)  The  Company's  obligation  to pay  the  principal  of and
interest on the Term Loan shall be evidenced by a promissory note  substantially
in the form of Exhibit 2 hereto,  completed in accordance with the terms of this
Contract and duly executed,  issued and delivered by the Company (the 'Term Loan
Note').

            2.3. Interest Payments.

                 (a) Interest  shall accrue on the  aggregate  unpaid  principal
amount of each  Construction Loan during each calendar month at a rate per month
equal to [***] (or a pro-rata portion thereof for amounts  outstanding  during a
portion of the month).  Interest on the  Construction  Loans shall be compounded
monthly,  and  accrued  interest  on the  outstanding  principal  amount  of the
Construction  Loans shall be payable by the Company on the  Mandatory  Repayment
Date.

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

                 (b) Interest  shall accrue on the  aggregate  unpaid  principal
amount of the Term Loan during each quarter at a rate per quarter equal to [***]
(or a pro-rata portion thereof for amounts  outstanding  during a portion of the
quarter).  Interest on the Term Loan shall be compounded quarterly,  and accrued
interest on the outstanding  principal  amount of the Term Loan shall be payable
by the Company on each Term Loan Repayment Date.

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

                 (c)  Interest  on each Loan shall be computed on the basis of a
360-day year consisting of twelve 30-day months.  Interest shall accrue from the
most recent  date to which  interest  has been paid or, if no interest  has been
paid,  from the date  requested  by the  Arranger  to its bank to  transfer  the
proceeds of the respective Loan to the Company.

                 (d) If the Company shall fail to make any payment  hereunder or
on the Notes when due, it shall pay on demand  interest on such  amounts (to the
extent  permitted by law) to the date of actual payment (after as well as before
judgment)  at a rate per annum equal to the rate  provided in Section 2.3 (a) or
(b), as the case may be, plus 2%.

            2.4. Mandatory Repayments of Principal.

                 (a) Principal of the Construction Loans shall be repaid in full
by the Company,  together with any outstanding  accrued interest thereon, on the
Mandatory Repayment Date.

                 (b)  Principal  of the Term Loan shall be repaid by the Company
in 20 consecutive  semi-annual  installments  of equal amounts  beginning on the
date  occurring six months after the Mandatory  Repayment  Date and on each date
occurring six calendar months thereafter (each such date, a 'Term Loan Repayment
Date'),  provided that if any such date is not a Business Day, the relevant Term
Loan Repayment Date shall be the next following  Business Day. On the final Term
Loan  Repayment  Date,  all  outstanding  principal  amounts  of the Term  Loan,
together with any outstanding accrued interest thereon, shall be paid in full to
the  Arranger.  The Parties shall  complete  Schedule A to the Term Loan Note to
reflect actual Term Loan Repayment  Dates prior to the issuance of the Term Loan
Note.

            2.5. Optional Term Loan Prepayments.  The Company may, upon at least
five (5) Business  Days prior written  notice to the  Arranger,  prepay the Term
Loans,  in whole or in part, in an aggregate  principal  amount of US$250,000 or
integral  multiples of US$50,000 in excess  thereof,  together  with all accrued
interest thereon to the date of prepayment. Upon receipt by the Arranger of such
a notice of  prepayment  in  accordance  with this  section,  such notice  shall
thereafter not be revocable by the Company.  Any such  prepayments  shall reduce
pro-rata amounts owing on any remaining Term Loan Repayment Dates.

            2.6. Other Amounts. All payments of principal,  premium, if any, and
interest  in respect  of the Notes  will be made free and clear of, and  without
withholding or deduction for, any Withholding  Taxes.  If any Withholding  Taxes
are so imposed, the Company will pay such additional amount ('Additional Company
Amounts')  as will result in receipt by the  Arranger  of such  amounts as would
have been received by it had no such Withholding Taxes been imposed.

            2.7.  Payments to the  Arranger;  Application  of Proceeds.  (a) All
payments to the Arranger of interest, principal,  Additional Company Amounts and
any other  amounts  owing  hereunder  shall be made in  Dollars  in  immediately
available  funds and shall be made to a bank account  designated by the Arranger
in a written notice to the Company.

                 (b) Except as provided in Section 6.4, all payments received by
the  Arranger  hereunder  shall be  applied,  as promptly  as  possible,  in the
following  order:  (i) first,  to the payment of costs and  expenses  hereunder,
including  those from the  enforcement  of the Contract and the other  Financing
Documents,  (ii) second, to the payment of Additional  Company Amounts,  if any,
and accrued but unpaid interest, including default interest, and (iii) third, to
the payment of  principal,  premium and all other  obligations  owing under this
Contract and the other Financing Documents.


            3.   Loans.

            3.1. Method of Borrowing; Transfer of Funds.

                 (a) The Company may request a Loan by making a written  request
to the  Arranger  no less than seven (7) days prior to the date of the  proposed
Loan.  Each such  request  shall be in the form of  Exhibit 3 hereto,  with such
blanks  appropriately  completed.  All such  written  requests for a Loan by the
Company  shall be  irrevocable  unless the Company  provides the  Arranger  with
written notice of its  cancellation  of a request no later than two (2) Business
Days prior to the date specified for the making of the Loan.

                 (b)  Subject  to the terms  and  conditions  contained  in this
Contract,  the  Arranger  shall make Loan  amounts  available  to the Company in
Dollars  in  immediately  available  funds  in  accordance  with  the  Company's
instructions set forth in the relevant request for a Loan.

            3.2. Conditions to all Loans. The Arranger's  obligation to make any
Loan is subject to  performance by the Company of all of its  obligations  under
this Contract and the  fulfillment  (or waiver in writing by the Arranger in its
sole discretion) of the following conditions precedent:

                 (a) receipt by the  Arranger of the written  request for a Loan
as required by Section 3.1 (a) hereof;

                 (b) no Default shall have occurred and be continuing  hereunder
and no Default  under any agreement to which the Company is a party would result
from the making of the Loan or the application of the proceeds therefrom;

                 (c) the representations and warranties of the Company contained
in this  Contract,  the Financing  Documents  and each of the Project  Documents
shall be true and correct on as of the date of such Loan;

                 (d) such  Loan  will not  contravene  any  provision  of law or
regulation of any Governmental Authority;

                 (e) (i) all Clearances for the Power Station, for the Financing
Documents,  and for each of the Project Documents, and (ii) the Liens created by
the Security  Documents in the  Collateral,  on and as of the date of such Loan,
shall be in full force and effect;

                 (f) receipt by the Arranger of a certificate  dated the date of
the Loan, duly executed by an Authorized  Officer of the Company,  certifying as
to the effect set forth in Section 3.2(b), (c), (d), and (e) hereof; and

                 (g) the  Company  shall  have  duly  authorized,  executed  and
delivered  to  the  Arranger  the  Security  Documents  in  form  and  substance
satisfactory to the Arranger;

                 (h) the  shareholders  of the  Company  shall  have made  their
initial  contributions to the registered  capital of the Company pursuant to the
terms of the Joint Venture Contract; and

                 (i)  receipt  by the  Arranger  of all  such  other  documents,
instruments,  or opinions of counsel it deems necessary or advisable in order to
make the Loans.

            3.3.   Conditions  to  First   Construction   Loan.  The  Arranger's
obligation  to  make  the  first   Construction   Loan  shall,  in  addition  to
satisfaction  of the  requirements  of  Section  3.2  hereof,  be subject to the
fulfillment (or waiver in writing by the Arranger in its sole discretion) of the
following conditions precedent:

                 (a)  receipt by the  Arranger of a duly  executed  Construction
Loan Note of the Company, dated the date of the making of the first Construction
Loan;

                 (b)  receipt by the  Arranger  of an  opinion of the  Company's
counsel,  in form and substance  satisfactory  to the Arranger,  with respect to
certain  matters  relating  to the  Construction  Loan  to be  indicated  by the
Arranger;

                 (c)  receipt by the  Arranger of all  documents  it may request
with respect to (i) the existence of the Company,  (ii) the corporate  authority
of the Company and the validity of each of the Financing Documents and (iii) any
other matters  related  thereto,  all in form and substance  satisfactory to the
Arranger;

                 (d) receipt by the  Arranger of executed  copies of all Project
Documents entered into by the Company;

                 (e)  receipt  by  the   Arranger  of  copies  of  all  required
Clearances  for the Power Station,  for the Financing  Documents and for each of
the Project Documents;

                 (f) receipt by the Arranger of evidence,  in form and substance
satisfactory  to the  Arranger,  that the Company is required to make payment of
Project Costs and that it does not possess the funds, either by way of equity or
debt, to make such payment of Project Costs; and

                 (g)  evidence,  in  form  and  substance  satisfactory  to  the
Arranger,  that all filings and registrations of each of the Security  Documents
have been made and that,  as a  consequence,  the  Security  Documents  create a
legally valid  perfected first priority  security  interest in the Collateral in
favor of the Arranger and the Other  Arrangers,  securing the Arranger's and the
Other Arrangers' rights under this Contract and the Other Contracts.

            3.4.  Conditions to Additional  Construction  Loans.  The Arranger's
obligations  to make  additional  Construction  Loans shall,  in addition to the
satisfaction  of the  requirements  of  Section  3.2  hereof,  be subject to the
fulfillment (or waiver in writing by the Arranger in its sole discretion) of the
following conditions precedent:

                 (a) receipt by the Arranger of evidence,  in form and substance
satisfactory  to the  Arranger,  that the Company is required to make payment of
Project Costs and that it does not possess the funds, either by way of equity or
debt, to make such payment of Project Costs.

            3.5. Conditions to the Term Loan. The Arranger's  obligation to make
the Term Loan shall, in addition to satisfaction of the  requirements of Section
3.2 hereof,  be subject to the fulfillment (or waiver in writing by the Arranger
in its sole discretion) of the following conditions precedent:

                 (a)  receipt by the  Arranger of a copy of the  Certificate  of
Performance Acceptance of the Power Station;

                 (b) receipt by the Arranger of a duly  executed  Term Loan Note
of the Company dated the date of the making of the Term Loan;

                 (c)  receipt by the  Arranger  of an  opinion of the  Company's
counsel,  in form and substance  satisfactory  to the Arranger,  with respect to
certain matters relating to the Term Loan to be indicated by the Arranger; and

                 (d) receipt by the Arranger of evidence,  in form and substance
satisfactory to the Arranger,  reconfirming that the Security Documents continue
to create a legally valid perfected first priority security interest and Lien in
the  Collateral in favor of the Arranger and the Other  Arrangers,  securing the
Arranger's  and the Other  Arrangers'  rights under this  Contract and the Other
Contracts.


            4.   Representations and Warranties of the Company.

            The Company represents and warrants as follows:

            4.1.  Corporate  Existence  and Power.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the PRC,
and has all  corporate  powers  and all  Clearances  required  to  carry  on its
business as presently conducted.

            4.2.  Authorization;  Contravention.  The  execution,  delivery  and
performance  by  the  Company  of  each  of  the  Financing  Documents  and  the
consummation of the transactions  contemplated  thereby are within the Company's
corporate powers, have been duly authorized by all necessary corporate and joint
venture action,  require no further action by or in respect of any  Governmental
Authority and do not contravene, or constitute a Default under, any provision of
applicable law or regulation or of any  agreement,  judgment,  order,  decree or
other instrument binding upon the Company and will not result in the creation or
imposition of any Lien on any asset of the Company (other than a Lien created by
the Security Documents).

            4.3.  Binding Effect.  This Contract has been, and each of the other
Financing  Documents when delivered will have been,  duly executed and delivered
by the Company.  Upon filing with the Chengdu  SAEC,  this Contract will be, and
each of the other Financing  Documents when delivered will be, the legal,  valid
and  binding  obligations  of the  Company,  enforceable  against the Company in
accordance with their terms.

            4.4.  Financial  Information.  All financial  information  heretofor
provided  by the  Company to the  Arranger  fairly  present in  conformity  with
People's  Republic of China  Accounting  Rules the  financial  condition  of the
Company as of its date.

            4.5. Litigation. There is no action, suit, or proceeding pending, or
threatened,  against or affecting the Company  before any court or arbitrator or
any Governmental Authority.


            5. Covenants of the Company.

            So long as any Loan shall remain  unpaid or the Arranger  shall have
any Commitment hereunder, the Company covenants as follows:

            5.1. Existence.  The Company shall maintain its legal existence as a
Sino-foreign joint venture established under the laws of the PRC.

            5.2. Notice of Certain Events.  The Company shall give notice to the
Arranger,  promptly following an Authorized Officer's learning of the occurrence
thereof,  of (a) any Default (other than an immaterial  Default that such Person
reasonably anticipates will be cured on or before the seventh Business Day after
an  Authorized   Officer  becomes  aware  thereof)  or  any  Event  of  Default,
specifically stating that such event or condition has occurred and describing it
and any action  being or  proposed  to be taken with  respect  thereto,  (b) the
occurrence  of an Event  of Loss (or  threat  of an  Event of  Eminent  Domain),
together with the details  thereof and the action which the Company is taking or
proposes to take with respect thereto,  (c) any action, suit or proceeding by or
before any Governmental Authority, arbitral tribunal or other body which has had
or could reasonably be expected to have a Material Adverse Effect, together with
the details  thereof,  (d) receipt of any notice from the Power Purchaser of any
circumstance,  act or condition which has had or would reasonably be expected to
have a Material Adverse Effect, together with the details thereof and the action
which the  Company  is taking or  proposes  to take with  respect  thereto,  (e)
written notice of any material Default by it under, or material breach by it of,
the  Security  Documents  or  relating  to the  Collateral,  and (f)  any  other
circumstance,  act or condition which has had or would reasonably be expected to
have a Material Adverse Effect, together with the details thereof and the action
which the Company is taking or proposes to take with respect thereto.

            5.3. Delivery of Financial Statements and Other Reports. The Company
shall furnish to the Arranger:

                 (a) as soon as available and in any event within 120 days after
the end of each of its fiscal  years  (commencing  with the fiscal  year  ending
December 31,  1996),  copies of its audited  balance sheet as of the end of such
fiscal  year and copies of its audited  statements  of income and cash flows for
such fiscal year (in each case,  in accordance  with People's  Republic of China
Accounting  Rules)  setting  forth in each case  corresponding  figures from the
preceding  fiscal  year,  and  accompanied  by an  opinion  thereon of a firm of
independent public accountants of recognized international standing;

                 (b) as soon as available  and in any event within 60 days after
the end of each of its first  three  fiscal  quarters,  copies of the  unaudited
balance  sheet of the  Company as of the end of such  quarter  and copies of its
unaudited  statements  of income and cash flow for such  quarter and fiscal year
through such quarter (in each case,  in  accordance  with  People's  Republic of
China  Accounting  Rules)  setting  forth in each  case,  in  comparative  form,
corresponding  unaudited  figures  from  the  preceding  fiscal  year,  prepared
consistently with the annual statements described in Section 5.3(a) (but subject
to year end  adjustments  and such other  adjustments as are applicable  and, in
each case,  consistent  with  People's  Republic of China  Accounting  Rules and
necessary for  meaningful  comparison),  and  accompanied by a certificate of an
Authorized  Officer of the Company to the effect that such financial  statements
fairly represent its financial  condition and results of operations at and as of
their respective dates, subject to such adjustments; and

                 (c) a copy of each annual  operating budget and fuel management
plan,  if any,  as soon as  available,  but in any event not later  than 30 days
prior to the beginning of the period covered by such annual operating budget and
fuel management plan, respectively.

            Notwithstanding  the  foregoing,  the  Arranger  shall  be  under no
obligation  to review or to take any action with respect to the  information  or
documents provided to it pursuant to this Section 5.3.

            5.4.  Insurance.  The Company  shall  procure at its own expense and
maintain in full force and effect at all times  insurance in form and  substance
acceptable to the Arranger.

            5.5. Government Rules and Governmental Approvals.  The Company shall
comply with all Government Rules applicable to it and the Power Station,  except
where the failure to do so could not have a Material Adverse Effect.

            5.6. Performance of Project Documents. The Company shall perform all
of its covenants, agreements and obligations under each of the Project Documents
to which it is a party,  except  where  the  failure  to do so could  not have a
Material Adverse Effect.  The Company shall take such reasonable steps as may be
necessary  to  enforce  the  material  obligations  of the other  parties to the
Project Documents.

            5.7.  Construction  and Operation of the Power Station.  The Company
shall (a) construct, operate, and maintain the Power Station, or cause the Power
Station to be  constructed,  operated,  and  maintained,  in accordance with the
terms of the Project Documents and prudent operating  practices and (b) promptly
invoice,  and use commercially  reasonable efforts to collect, all payments owed
by the Power Purchaser.

            5.8.  Environmental  Compliance.  The Company  shall comply with all
Environmental  Laws  applicable  to it and to the Power  Station,  except  where
failure to do so could not have a Material Adverse Effect. The Company shall use
reasonable  efforts to prevent  any  physical  condition  from  existing  on any
property  owned  or  operated  by the  Company  or on any  property  that may be
impacted  by the  Company's  operations  which  could give rise to any  remedial
obligation under any  Environmental  Laws or which could result in any liability
to any  third  party  claiming  damage  to  person  or  property  as a result or
consequence of said physical condition, in each case which could have a Material
Adverse Effect.

            5.9. Use of Proceeds.  The Company  shall use the proceeds  from the
Construction  Loans solely to pay for Project  Costs.  The Company shall use the
proceeds from the Term Loan solely to repay the  Construction  Loans,  including
accrued interest thereon.

            5.10.  Payment of Taxes and Claims.  The Company  shall duly pay and
discharge  or cause to be paid or  discharged  prior to  delinquency  all taxes,
assessments and governmental and other charges lawfully levied and assessed upon
it, the Power Station and the Collateral,  or upon the franchises,  earnings and
business of it, the Power  Station and the  Collateral,  including all penalties
and interest thereon,  other than any such taxes,  assessments,  or charges that
are the subject of a Good Faith Contest. The Company shall promptly pay or cause
to be paid any valid, final judgment enforcing any such tax, assessment, charge,
levy or claim and cause the same to be satisfied of record  unless such judgment
is the subject of a Good Faith Contest.

            5.11. Event of Loss. If an Event of Loss shall occur with respect to
any portion of the  Collateral,  the Company shall,  to the extent  commercially
reasonable,  diligently  pursue all of its rights to  compensation  against  the
applicable Governmental Authority or any other Person with respect to such Event
of Loss,  and deposit in a trust account  subject to the control of the Arranger
and the Other  Arrangers all Loss Proceeds  received in respect of such Event of
Loss  (after  deducting  all  reasonable  costs and  expenses  incurred by it in
pursuing such compensation against such Governmental Authority or other Person).

            5.12. Maintenance of Books and Records;  Inspection by the Arranger.
The  Company  shall  keep  proper  books and  records  of all its  business  and
financial affairs in accordance with People's Republic of China Accounting Rules
and  shall,  upon  the  reasonable  written  request  of  the  Arranger,  permit
representatives  of the Arranger to inspect its properties  (including the Power
Station),  books,  records,  reports  and other  papers  and to take  copies and
extracts therefrom.

            5.13. Recording of Financing  Documents.  The Company will cause the
Financing  Documents  at all times to be duly  registered,  recorded or filed in
such  manner and in such places as may in the  reasonable  opinion of counsel to
the  Arranger  be  required by  applicable  law in order to  preserve  fully and
maintain the Liens  intended to be created under the Financing  Documents to the
extent  attainable  under  applicable  law. The Company  shall from time to time
execute  or cause to be  executed  any and all  further  instruments  reasonably
required to maintain  and preserve  the Liens  intended to be created  under the
Financing Documents.

            5.14.  Instruments of Further Assurance.  The Company will, upon the
Arranger's reasonable request,  execute and deliver such further instruments and
do such further acts as may be necessary or proper to carry out more effectually
the purposes of this Contract.

            5.15.  Issuance of Additional  Debt.  The Company shall not incur or
suffer to exist any Indebtedness, except for Permitted Indebtedness.

            5.16.  Liens.  The  Company  shall not  create or suffer to exist or
permit  any Lien upon or with  respect to any of its  properties  except for (a)
Liens securing  Indebtedness  arising under this Contract,  the other  Financing
Documents or any Project  Document,  (b) mechanics' or materialmen's  Liens that
are subject to a Good Faith Contest, (c) Liens for taxes not yet due and payable
or taxes that are the subject of a Good Faith Contest,  (d) Permitted Liens, and
(e) Liens relating to Permitted Indebtedness.  Prior to granting any Lien on any
Collateral in connection with the incurrence of Permitted Indebtedness permitted
pursuant  to clause (e) above,  the  Company  shall  furnish to the  Arranger an
opinion of counsel reasonably  satisfactory to the Arranger stating that, in the
opinion  of such  counsel,  such  action has been  taken as is  necessary  under
applicable  law to maintain the Lien  intended to be created under the Financing
Documents or stating that no such action is necessary to maintain such Lien. All
references  herein  to  maintaining  a Lien  include,  but are not  limited  to,
maintaining the intended  priority of such Lien to the extent  attainable  under
applicable law.

            5.17.  Nature of  Business.  The  Company  shall  not  engage in any
business  other  than the  ownership  and  operation  of the  Power  Station  as
contemplated or allowed by the Project Documents and the Financing Documents.

            5.18.  Modification  of  Agreements.   (a)  The  Company  shall  not
terminate  or  amend,  modify or waive any  provision  under any of the  Project
Documents  to which it is a party or  assignee  unless the  Arranger  shall have
received a certificate of an Authorized  Officer of the Company  certifying that
(i) such termination,  amendment, modification or waiver could not reasonably be
expected to have a Material  Adverse Effect taken as a whole either currently or
in the future,  and (ii) such  termination,  amendment,  modification  or waiver
could not  reasonably  be expected to materially  increase the  likelihood of an
occurrence of a future Material Adverse Effect.

                 (b) The Company shall not terminate, amend, modify or waive any
rights under the Letter(s) of Undertaking;  provided,  however, that the Company
may confirm the continued  validity of such Letters of  Undertaking,  obtain new
letters  with  provisions  no less  favorable  to the Company  than the existing
letters or extend the effectiveness of such letters.

            5.19.  Guarantees.  Except as contemplated by the Project Documents,
the Company shall not contingently or otherwise be or become liable, directly or
indirectly, in connection with any Guarantee except (a) indemnities with respect
to unfilled materialmen's,  mechanics',  workmen's,  repairmen's,  employees' or
other  similar Liens  arising in the course of  construction  or in the ordinary
course of operations or  maintenance of the Power  Station,  (b)  indemnities to
Governmental  Authorities  relating to any expenses incurred that are incidental
to obtaining  easements for the benefit of the Power Station and (c)  Guarantees
of Permitted  Indebtedness  the proceeds of which result in a direct  benefit to
Company.

            5.20.  Prohibition  on  Fundamental  Changes.  The Company shall not
enter  into any  transaction  of merger or  consolidation,  change  it's form of
organization,  liquidate  or  dissolve  itself  (or suffer  any  liquidation  or
dissolution). Except as contemplated in the Project Documents, the Company shall
not purchase or otherwise  acquire all or substantially all of the assets of any
Person.

            5.21.  Prohibition on Disposition of Assets.  Except as contemplated
by the Project Documents or permitted pursuant to the Financing  Documents,  the
Company  shall not  lease (as  lessor)  or  dispose  of,  sell or  transfer  (as
transferor)  any  property  or assets  material  to the  operation  of the Power
Station,  except (a) in the ordinary  course of business to the extent that such
property  is worn out or no  longer  useful or  usable  in  connection  with the
operation of the Power Station or (b) to the extent such property is replaced by
property  having a similar  purpose and having a fair  market  value equal to or
greater than the fair market value of the property  being leased or  transferred
and upon which the Arranger has an equivalent Lien.

            5.22. Transactions With Affiliates. Other than the Project Documents
and the Financing  Documents,  the Company shall not enter into any transactions
with Affiliates,  unless the terms of such transactions are no less favorable to
the Company than terms which the Company could obtain in comparable transactions
entered into on an arm's-length basis with a Person which is not an Affiliate of
the Company.

            5.23. Power Purchaser's  Assignment.  The Company shall not, without
the prior written  consent of the Arranger,  approve any assignment of the Power
Purchaser's obligations under the Power Purchase Contract.

            5.24. Notice to the Arranger.  The Company shall notify the Arranger
in  writing  of any  discrepancies  between  the  Services  (as  defined  in the
Construction  Contract) and all requirements of the Power Purchaser of which the
Company is aware.


            6.   Events of Default: Remedies.

            6.1. 'Event of Default'  Defined.  The term 'Event of Default' means
any of the following  events  (whatever the reason for such event and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to or in  compliance  with any  applicable  Government  Rule) and any such event
shall continue to be an Event of Default if and for so long as it shall not have
been remedied;

                 (a) failure by the Company to pay  principal of or premium,  if
any, or interest on a Loan for a period of five days after any such amount shall
have become due and payable,  whether by scheduled maturity,  required repayment
or redemption, acceleration or otherwise;

                 (b) failure by the Company to perform in any  material  respect
any covenant of the Company in this Contract (other than the default referred to
in Section 6.1(a)) or in any other Financing  Document following notice from the
Arranger, and such failure remains unremedied for 30 days;

                 (c)  any  representation,  warranty  or  certification  made or
deemed  made in this  Contract  or any other  Financing  Document by the Company
shall prove to have been incorrect in any material  respect as of the time made,
confirmed or  furnished  and remains  incorrect in any material  respect 30 days
after the Company becomes aware that it is incorrect;

                 (d) the Company shall:

                       (i)  apply  for  or  consent  to  the  appointment  of  a
                  receiver, custodian, trustee, liquidator or equivalent thereof
                  in  the  applicable   jurisdiction  of  it  or  of  all  or  a
                  substantial  part of its assets (other than in connection with
                  a  restructuring  for tax purposes)  which (i) has no Material
                  Adverse  Effect  and (ii)  does not  effect  the  validity  or
                  enforceability of this Contract,  any other Financing Document
                  or any Project Document),

                       (ii) file a voluntary petition in bankruptcy, or admit in
                  writing its  inability to pay it debts as they come due (other
                  than in  connection  with a  restructuring  for tax  purposes)
                  which (i) has no  Material  Adverse  Effect  and (ii) does not
                  effect the validity or  enforceability  of this Contract,  any
                  other Financing Document or any Project Document,

                       (iii)  make a  general  assignment  for  the  benefit  of
                  creditors,

                       (iv) file a petition or an answer seeking  reorganization
                  or  arrangement  with  creditors  or to take  advantage of any
                  insolvency law,

                       (v) file an answer admitting the material allegations of,
                  or  consent  to, or  default in  answering,  a petition  filed
                  against it in any  bankruptcy,  reorganization  or  insolvency
                  proceeding, or

                       (vi) be  adjudicated  bankrupt  or  insolvent,  or be the
                  subject of an order,  judgment or decree  entered by any court
                  of  competent   jurisdiction   approving  a  petition  seeking
                  reorganization  of  such  Person  or  appointing  a  receiver,
                  trustee,  liquidator or equivalent  thereof in the  applicable
                  jurisdiction of such Person or of all or a substantial part of
                  its assets, and such order,  judgment or decree shall continue
                  unstayed and in effect for a period of 60 days;

                 (e) failure by the Company to pay,  discharge,  or provide full
reserves  against any final and  nonappealable  judgment by a court of competent
jurisdiction  against it for the payment of money in excess of US$1,000,000  (or
the equivalent  thereof in any other  currency)  within 60 days from the date of
entry thereof;

                 (f) the  failure of the  Company to make any  payment  when due
(subject to any applicable  grace period) in respect of any of its  Indebtedness
in an aggregate amount exceeding  US$1,000,000 (or the equivalent thereof in any
other currency),  which has been incurred and which remains  outstanding  (other
than any amount due under or pursuant to the Financing Documents);

                 (g) the  Power  Purchase  Contract  or any  Financing  Document
ceases for any reason to be valid and binding and in full force and effect prior
to its termination in accordance with its terms;

                 (h)  any  Project  Document  (other  than  the  Power  Purchase
Contract)  ceases for any reason to be valid and  binding  and in full force and
effect prior to its termination in accordance with its terms unless the Arranger
shall have received a certificate of an Authorized Officer of the Company to the
effect that such event will not have a Material Adverse Effect;

                 (i) at least 90 days shall  have  elapsed  since any  Clearance
necessary to construct or operate the Power  Station  shall have been revoked or
withdrawn,  if such  revocation  or  withdrawal  could have a  Material  Adverse
Effect;

                 (j) any grant of a Lien  contained in the  Financing  Documents
ceases to be effective  to grant a perfected  Lien on any of the  Collateral  or
ceases to be effective to grant a perfected Lien with the priority  purported to
be  created  thereby,  to the extent  attainable  under the law  governing  such
documents, in favor of the Arranger in the Collateral;

                 (k) the Company abandons the Project;

                 (l) any party to a Project Document fails to perform any of its
material  obligations  thereunder  or  makes  any  material   misrepresentations
thereunder, which failure or misrepresentation (i) is not cured within the later
of (A) the cure period set forth in the relevant Project Document or (B) 30 days
after the  Company's  or the  Arranger's  actual  knowledge  of such  failure or
misrepresentation and (ii) could have a Material Adverse Effect on the Company;

                 (m) the Power  Purchaser is liquidated,  except for liquidation
at the end of the term of the Power Purchase Contract;

                 (n)  Project   Completion  (as  defined  in  the   Construction
Contract) shall not have occurred by January 1, 1998;

                 (o) a Financing  Event of Default  shall have  occurred  and be
continuing;

                 (p) borrowings and repayments under the Other Contracts are not
made in accordance with Section 7.1; or

                 (q) a sale of the Collateral or any part thereof occurs without
the consent of the Arranger.

            6.2. Exercise of Remedies.

                 (a) If an Event of Default shall occur and be continuing, then,
(i) the Arranger, by notice to the Borrower and the Other Arrangers, may declare
its  obligation  to make  Loans  to be  terminated,  whereupon  the  same  shall
forthwith  terminate,  and (ii) the Arranger,  by notice to the Borrower and the
Other  Arrangers,  may declare all of the Notes,  all  interest  thereon and all
other  amounts  payable  under this  Contract to be  forthwith  due and payable,
whereupon all of the Notes,  all such interest and all such amounts shall become
and be  forthwith  due and  payable,  without  presentment,  demand,  protest or
further  notice of any kind,  all of which are  hereby  expressly  waived by the
Company; provided, however, that if an Event of Default of the kind described in
Section 6.1 (d) shall occur,  (i) the  obligation  of the Arranger to make Loans
shall  automatically  be terminated and (ii) all of the Notes, all such interest
and all such amounts shall automatically become and be due and payable,  without
presentment,  demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.

                 (b) In case one or more of the  Events of  Default  shall  have
occurred and shall be continuing, then the Arranger may also exercise all rights
and remedies which it may have under any of the Financing  Documents as provided
therein,  in addition to all other rights and remedies available to the Arranger
at law or in equity. The Arranger shall be also entitled to proceed forthwith to
protect and enforce its rights under this  Contract by a suit or suits in equity
or at law,  either for the  specific  performance  of any  covenant or agreement
contained herein, or in aid of the execution of any power herein granted, either
for interest or for principal,  or for both, or for the enforcement of any other
appropriate  legal or  equitable  remedy,  as the  Arranger,  being  advised  by
counsel,  shall  deem most  effectual  in support of any of its rights or duties
hereunder.

            6.3.   Collection  of  Indebtedness  by  the  Arranger;   Deficiency
Judgment. The Arranger shall be entitled to recover judgment against the Company
and any other obligor on the Notes and the Loans for the whole amount so due and
unpaid either before,  after or during the pendency of any  proceedings  for the
enforcement of any Lien or other provisions of the Financing  Documents,  and in
the case of a sale of the Collateral and the application of the proceeds of such
sale, the Arranger,  in its own name,  shall be entitled to enforce  payment of,
and to receive,  all amounts then  remaining due and unpaid upon the Notes,  for
the benefit of the holders  thereof,  and shall be entitled to recover  judgment
for any portion of the same  remaining  unpaid,  with interest as aforesaid.  No
recovery of any such  judgment  by the  Arranger,  and no levy of any  execution
under any such judgment upon any property of the Company, shall affect or impair
the Lien of the Financing  Documents,  or any rights,  powers or remedies of the
Arranger hereunder or under any other Financing Document.

            6.4. Application of Proceeds of Collateral. The proceeds of any sale
of the Collateral,  or any part thereof,  together with any other sums then held
by the  Arranger  as part of the  Collateral,  shall be applied as  promptly  as
possible as follows: (i) first, to the payment of the costs and expenses of such
sale, including the compensation of the Arranger and its agents and counsel, and
of all  charges,  expenses,  liabilities  and  advances  incurred or made by the
Arranger without gross negligence or bad faith;  (ii) second,  to the payment of
Additional  Company Amounts  hereunder and additional  company amounts under the
Other Contracts,  if any, and of the interest due and unpaid hereunder and under
the Other Contracts,  including default interest; (iii) third, to the payment of
principal,  premium, if any, and all other obligations owing hereunder and under
the Financing Documents;  and (iv) fourth, the surplus, if any, shall be paid to
the Company, its successors or assigns.


            7.   Intercreditor Arrangements.

            7.1.  Borrowings and Repayments.  All borrowings  hereunder shall be
made  simultaneously  with borrowings made under the Other  Contracts,  and each
borrowing  hereunder  shall be in a percentage  of the  Commitment  equal to the
percentage each simultaneous  borrowing of loans under each Other Contract bears
to the commitment  under each such Other  Contract;  provided that the foregoing
shall only apply to borrowings  under the Huaxi  Support  Contract to the extent
that the aggregate  principal amount of Loans made under this Contract and loans
made under the CNAC Support Contract exceeds U.S.$17,880,000.  All repayments or
prepayments of Loans (including principal, interest and other amounts) hereunder
shall be made  simultaneously  with  prepayments  or repayments  under the Other
Contracts,  and any such repayment or prepayment under this Contract shall be in
a percentage of Loans  outstanding  equal to the  percentage  each  simultaneous
repayment or  prepayment of loans under each Other  Contract  bears to the loans
outstanding  under each such Other  Contract,  in each case using the Dollar/RMB
exchange rate, if applicable, provided herein and in the Other Contracts.

            7.2. Pari Passu.  All rights of the Arranger  hereunder with respect
to the Loans and the  Collateral  shall be on a pari passu basis with the rights
of the Other  Arrangers  under the Other  Contracts  with  respect  to the Other
Arrangers' loans and the Collateral.

            7.3.  Amendment  or  Assignment.  This  Contract may not be amended,
changed, terminated or discharged without the prior written consent of the Other
Arrangers.  Neither this Contract nor the rights or obligations hereunder may be
assigned or transferred by either Party without the prior written consent of the
Other Arrangers.


            8.   Miscellaneous.

            8.1. Benefit of Agreement;  Partial Invalidity.  This Contract shall
be binding upon and inure to the benefit of and be enforceable by the respective
successors  and  assigns of the  Parties  hereto.  The Company may not assign or
transfer any of its rights or  obligations  hereunder  without the prior written
consent of the Arranger.  If any provision of this Contract,  or the application
of any  provision  to any  Person  or  circumstance,  shall be held  invalid  or
unenforceable,  the  remainder  of this  Contract,  or the  application  of such
provision  to  Persons  or  circumstances  other  than those to which it is held
invalid or unenforceable, shall not be affected thereby.

            8.2.  Governing  Law.  The  rights  of the  Parties  hereto  and the
validity, interpretation and implementation of this Contract and the Notes shall
be governed by and construed and  interpreted in accordance with the laws of the
People's Republic of China.

            8.3.   Friendly   Consultations.   In  the  event  of  any  dispute,
controversy,  or claim  arising  out of or  relating  to this  Contract or other
Financing Documents, or the breach, termination or invalidity hereof or thereof,
the disputing Party shall provide written notice thereof to the other Party. The
Parties  shall  attempt in the first  instance to resolve such  dispute  through
friendly consultations.

            8.4.  Arbitration.  (a) If the  dispute is not  resolved by friendly
consultation  within 60 days after notice of a dispute is given by a Party, then
any Party may submit the  dispute  for final  binding  arbitration  by the China
International  Economic and Trade Arbitration  Commission in accordance with its
rules  then in force.  The  arbitration  proceedings  shall be held in  Mandarin
Chinese and English. The site of the arbitration shall be Beijing.  Should there
exist a conflict between the rules of the China International Economic and Trade
Arbitration  Commission and the  provisions of this Contract,  the provisions of
this Contract will prevail.

                 (b) There shall be three (3) arbitrators. All three arbitrators
shall speak both  Mandarin  Chinese and  English.  The Company and the  Arranger
shall each  appoint (1)  arbitrator  within  thirty (30) days of the date of the
request to initiate arbitration. Within thirty (30) days from the appointment of
the second of the Parties' arbitrators, the Parties' arbitrators shall appoint a
third  arbitrator  who shall,  in addition to his duties as  arbitrator,  act as
chairman of the arbitration tribunal.  Arbitrators not appointed within the time
limits  set forth in this  paragraph  (b) shall be  appointed  by the  Secretary
General of the International Center for Settlement of Investment  Disputes.  The
Parties  hereby  waive  and  renounce  any  right  to  appeal  the  award of the
arbitration  panel or to have any question of law or fact referred to a court or
other forum in the People's Republic of China except in furtherance of enforcing
the award of the arbitration panel.

                 (c) The award of the  arbitration  panel  shall be  issued  not
later  than  sixty  days  following  the close of  hearings  by the  panel.  The
arbitration  award  shall be final and  binding on the  Parties and shall not be
subject to appeal to any court. The Parties agree to be bound thereby and to act
accordingly.

                 (d) The costs of  arbitration  shall be borne by each  Party as
designated in the arbitration award.

            8.5. Continuing Rights and Obligations.  When any dispute occurs and
is the subject of  friendly  consultations  or  arbitration,  the Parties  shall
continue  to exercise  their  remaining  respective  rights,  and fulfill  their
remaining  respective  obligations,  under this Contract and the other Financing
Documents.

            8.6.  Enforcement of Award.  The Parties  acknowledge that any award
rendered pursuant to Section 8.4 hereof shall be governed by the 1958 Convention
on the Recognition and Enforcement of Foreign  Arbitration  Awards of the United
Nations.  The award shall be enforceable in any court that has jurisdiction over
the losing Party or over the property of the losing Party.

            8.7.  Waiver  of  Sovereign  Immunity  Defense.  In any  arbitration
proceeding,  any legal  proceeding to enforce any  arbitration  award and in any
legal action between the Parties pursuant to or relating to this Contract or the
other Financing Documents,  each Party expressly waives the defense of sovereign
immunity and any other  defense  based on the fact or  allegation  that it is an
agency or instrumentality of a sovereign state.

            8.8. Remedies Cumulative;  Delay or Omission Not to Impair Remedies.
No delay or omission of the Arranger in exercising  any right or remedy  arising
upon the happening of any Event of Default, and no course of dealing between the
Company,  on the one hand, and the Arranger on the other hand,  shall impair any
right or remedy for, or shall be  construed to be a waiver of, any such Event of
Default or an acquiescence  therein; nor shall any single or partial exercise of
any right or remedy,  under this Contract or under any other Financing Document,
preclude any other exercise thereof or the exercise of any other right or remedy
hereunder or thereunder. To the fullest extent permitted by Government Rule, the
rights and remedies herein and in the Financing Documents are cumulative and not
exclusive of any rights or remedies  which the Arranger  would  otherwise  have.
Remedies  may be  exercised  in whatever  order the Arranger or its designee may
elect. Any rights and remedies granted to or otherwise available to the Arranger
may be exercised by the Arranger or any Person or Persons  designated in writing
by the Arranger. No notice to or demand on the Company shall entitle such Person
to any further notice or demand in similar  circumstances or constitute a waiver
of the rights of the Arranger to any other action in any  circumstances  without
notice or demand.

            8.9. Amendment or Waiver. This Contract and the terms hereof may not
be amended,  changed,  waived,  discharged or terminated  unless such amendment,
change,  waiver,  discharge or  termination  is in writing signed by each of the
Parties hereto.

            8.10. Notices.  Any notices to the Arranger by the Company under any
provision of this Contract shall be sufficiently  given if in writing and served
personally upon an Authorized Officer of the Arranger or delivered via facsimile
transmission  to  facsimile  number:  (86) (10)  508-9628  with  electronic  and
telephonic  confirmation  to the Arranger,  Attention:  Jeff Safford,  facsimile
number: (85) (2) 530-1673 or at such other address as may be designated for that
purpose in a notice delivered to the Company by the Arranger.  Any notice to the
Company  by  the  Arranger  under  any  provision  of  this  Contract  shall  be
sufficiently  given if  served  personally  upon an  Authorized  Officer  of the
Company or delivered via facsimile  transmission to facsimile number:  (86) (10)
6508-9628  with  electronic or  telephonic  confirmation  to Attention:  Paul T.
Hanrahan,  or at such other address as may be  designated  for that purpose in a
notice delivered to the Arranger by the Company.

            8.11.  No  Oral  Agreement.  This  Contract  represents  the  entire
understanding  of  the  parties  and  supersedes  all  prior   undertakings  and
agreements with respect thereto, whether written or oral.

            8.12.  Counterparts.  This  Contract  may be executed in one or more
counterparts each of which shall be deemed an original and all of which shall be
deemed one and the same Contract.

            8.13.  Verification  and Approval by the Chengdu SAEC. The repayment
of the  principal  and payment of interest  pursuant to this  Contract  shall be
verified and approved by the Chengdu SAEC.






            IN WITNESS  WHEREOF,  and intending to be legally bound, the parties
hereto have caused  their duly  authorized  officers to execute and deliver this
Contract as of the date first above written.


                                   CHENGDU AES KAIHUA GAS
                                   TURBINE POWER CO., LTD.


                                   By:[Signature Illegible]
                                      ---------------------
                                      Name:
                                      Title:


                                   AES TIAN FU POWER
                                   COMPANY (L) LTD.


                                   By:[Signature Illegible]
                                      ---------------------
                                      Name:
                                      Title:


Agreed as to Section 6.4 and Section 7:

CHINA NATIONAL AERO-ENGINE
CORPORATION


By:[Signature Illegible]
   --------------------------------
   Name:
   Title:

CHENGDU HUAXI ELECTRIC POWER
SHAREHOLDING (GROUP) COMPANY LTD.



By:[Signature Illegible]
   --------------------------------
   Name:
   Title:





                                                                         Annex A
                                                                 to the Contract


                                   DEFINITIONS

            'ADDITIONAL  COMPANY  AMOUNTS'  has the meaning set forth in Section
2.6 of the Contract.

            'AFFILIATE' of any  designated  Person means any other Person which,
directly or indirectly,  controls or is controlled by or is under common control
with such designated Person.

            'ARRANGER'  has  the  meaning  provided  in  the  preamble  to  this
Contract.

            'AUTHORIZED   OFFICER'  means,  with  respect  to  any  Person,  the
president, any vice president, the treasurer, or any assistant treasurer of such
Person,  or any other Person  granted the  relevant  authority in writing by the
board of directors or management committee, as applicable, of such Person.

            'BUSINESS  DAY'  means  any day on which  commercial  banks  are not
authorized  or required to close in the City of New York,  New York and Beijing,
PRC.

            'CERTIFICATE  OF PERFORMANCE  ACCEPTANCE' has the meaning given such
term in the Construction Contract.

            'CLEARANCE' means any authorization,  consent, clearance,  approval,
license,  ruling, permit,  exemption,  filing or registration by or with (except
any filing relating to the perfection of security interests),  or variance of or
from any Governmental Authority.

            'CNAC SUPPORT CONTRACT' means the Support  Contract,  dated the date
hereof,  between the Company China National Aero-Engine  Corporation as arranger
thereunder.

            'COLLATERAL'  means,  collectively,  all  property  and assets  with
respect to which a Lien is granted under the Security Documents.

            'COMMENCEMENT   DATE'  has  the  meaning  given  such  term  in  the
Construction Contract.

            'COMMITMENT'  of the  Arranger  means,  for each  type of Loan,  the
amount set forth opposite the Arranger's name on Annex B.

            'COMPANY' has the meaning provided in the preamble to this Contract.

            'CONSTRUCTION CONTRACT' means the Contract for Construction Services
between the  Company  and China  National  Aero-Engine  Corporation  dated as of
---------, 1996.

            'CONSTRUCTION LOAN' has the meaning provided in Section 2.1(a).

            'CONSTRUCTION LOAN NOTE' has the meaning provided in Section 2.2(a).

            'CONSTRUCTION  PERIOD'  means the period of time  commencing  on the
Commencement Date and ending on the Mandatory Repayment Date.

            'DEFAULT' means, with respect to any document, any event which, with
the giving of notice or the passing of time, or both, or the  fulfillment of any
other  applicable  condition,  would  become  an event  of  default  under  such
document.

            'DOLLARS',  '$' or US$'  means any coin or  currency  of the  United
States of America  which is legal  tender for the  payment of public and private
debts.

            'ENVIRONMENTAL LAWS' means any laws, rules,  regulations,  and other
legal  requirements  of  any  Governmental   Authority,   foreign  or  domestic,
pertaining to the release of materials  into or  protection of the  environment,
including all such legal requirements pertaining to human health and safety.

         'EVENT OF DEFAULT' has the meaning provided in Section 6.1.

            'EVENT OF EMINENT  DOMAIN' means any  compulsory  transfer or taking
(including by condemnation, confiscation, seizure or requisition of title or use
or  transfer  under  threat of  compulsory  transfer  or  taking)  of all or any
material  part  of the  Power  Station  or the  Collateral  by any  Governmental
Authority.

            'EVENT OF LOSS'  means (i) an event that  causes all or a portion of
the Power Station or the  Collateral to be damaged,  destroyed or rendered unfit
for  normal  use for any  reason or (ii) the  occurrence  of an Event of Eminent
Domain.

            'FINANCING  DOCUMENTS'  means the Contract,  the Notes, the Security
Documents and the Other Contracts.

            'FINANCING  EVENT OF DEFAULT'  means an 'Event of Default' under any
Financing Document.

            'FUEL SUPPLY  CONTRACT' means the Gas Purchase and Supply  Contract,
dated  -----------,  1996 between the Company and Chengdu  Huachuan  Petroleum & Natural  Gas  Exploration  and  Development  Company for the long term supply of
natural gas to the Power Station.

            'GOOD FAITH  CONTEST'  means the contest of an item if: (i) the item
is  diligently  contested  in  good  faith  by  appropriate  proceedings  timely
instituted  and (ii) the failure to pay or comply with the contested item during
the period of such contest  could not  reasonably be expected to have a Material
Adverse Effect.

            'GOVERNMENT   RULE'  means  any   constitution,   law,   regulation,
ordinance,  rule, directive,  judgment,  administrative  practice,  order, writ,
injunction or decree of or by any Governmental Authority.

            'GOVERNMENTAL   AUTHORITY'  means  any  governmental   authority  or
judicial,  regulatory or administrative  body, agency or  instrumentality of any
country or political subdivision thereof exercising  jurisdiction over the Power
Station,  the  Company,  the  Arranger  or any  party to a Project  Document  or
Financing Document.

            'GUARANTEE'  by any  Person  means  any  obligation,  contingent  or
otherwise,  of such Person directly or indirectly guaranteeing in any manner the
payment or  performance  of any  Indebtedness  or other  obligation of any other
Person.

            'GUARANTEED  COMPLETION DATE' has the meaning given such term in the
Construction Contract.

            'HUAXI SUPPORT CONTRACT' means the Support Contract,  dated the date
hereof, between the Company and Chengdu Huaxi Electric Power Shareholder (Group)
Company Ltd. as arranger thereunder.

            'INDEBTEDNESS'   means,  for  any  Person,  at  any  date,   without
duplication  (i)  obligations  created,  issued or  incurred  by such Person for
borrowed money;  (ii) obligations of such Person to pay the deferred purchase or
acquisition  price of property or services,  other than trade  accounts  payable
(other than for borrowed money) arising,  and accrued expenses incurred,  in the
ordinary  course of business;  (iii)  Indebtedness  of others  secured by a Lien
(other than a  Permitted  Encumbrance)  on the  property  of such  Person;  (iv)
obligations  of  such  Person  in  respect  of  letters  of  credit  or  similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person  (except to the extent such  letters of credit or similar
instruments  are  described  in any of the  Financing  Documents  or the Project
Documents (including  performance bonds)); (v) capital lease obligations of such
Person; and (vi) Indebtedness of others Guaranteed by such Person.

            'INDEMNIFICATION  CONTRACT' means the Indemnification Contract dated
---------,   1996  between  the  Company  and  Chengdu  Huaxi   Electric   Power
Shareholdering (Group) Company Ltd.

            'INTERCONNECTION  CONTRACT' means the  Interconnection  and Dispatch
Contract,  dated as of --------, 1996, between Sichuan Power Dispatch Bureau and
the Company.

            'JOINT  VENTURE   CONTRACT'  means  the  Cooperative  Joint  Venture
Contract,   dated  November  28,  1995,   among  Chengdu  Huaxi  Electric  Power
Shareholding (Group) Company Ltd., China National Aero-Engine  Corporation,  and
AES China Generating Company Limited.

            'LAND CONTRACT' means the State-Owned Land Use Rights Contract to be
entered  into between the Company and  -----------------  State Land Bureau with
respect to the use of land located at the Site.

            'LETTER(S) OF UNDERTAKING'  means the letter(s) of undertaking  from
government  entities stating that they will render all necessary  support to the
Power Purchaser so that the Power  Purchaser can perform its  obligations  under
the Power Purchase  Contract,  including without  limitation (i) the Undertaking
Letter of the Chengdu City Economic Commission dated ----------,  1996; (ii) the
Undertaking  Letter of the Chengdu City  Commodity  Price  Control  Bureau dated
----------,  1996 and  (iii)  the  Undertaking  Letter  of the  Chengdu  Foreign
Economic and Trade Commission dated ----------, 1996.

            'LIEN'  means,  with respect to any property,  any  mortgage,  lien,
pledge, charge, lease,  easement,  servitude,  security interest,  assignment or
encumbrance of any kind on or with respect to such property.

            'LOAN' means either a Construction Loan or the Term Loan and 'Loans'
means collectively the Construction Loans and the Term Loan.

            'LOSS PROCEEDS'  means all net proceeds or compensation  received in
respect of any Event of Loss.

            'MANDATORY REPAYMENT DATE' means the earlier of (i) date the Company
delivers the Certificate of Performance  Acceptance to the contractor  under the
Construction  Contract  and  (ii)  the  Guaranteed  Completion  Date;  provided,
however,  that if such date is not a Business Day, the Mandatory  Repayment Date
shall occur on the next following Business Day.

            'MATERIAL  ADVERSE  EFFECT' means a material  adverse  effect on the
financial  position,  results of  operations or business  prospects,  taken as a
whole, of the Company, including,  without limitation, a material adverse effect
on (i) the commercial  operation of the Power  Station,  (ii) the ability of the
Company to perform  any of its  material  obligations  under the  Contract,  the
Project Documents or the Financing Documents,  (iii) the validity or priority of
the  Liens  on  any  of  the  Collateral,  (iv)  the  repayment  of  either  the
Construction Loans or the Term Loan, as the case may be, or (v) the validity and
enforceability of any of the Financing Documents or the Project Documents.

            'NOTE'  means  either  the  Construction  Loan Note or the Term Loan
Note, and 'Notes' means  collectively  the  Construction  Loan Note and the Term
Loan Note.

            'OTHER  CONTRACTS'  means the CNAC  Support  Contract  and the Huaxi
Support Contract.

            'OTHER ARRANGERS' means China National  Aero-Engine  Corporation and
Chengdu Huaxi  Electric  Power  Shareholding  (Group)  Company  Ltd.,  acting as
arrangers under the Other Contracts.

            'PARTY' means each of the Arranger and the Company.

            PEOPLE'S  REPUBLIC OF CHINA ACCOUNTING RULES' means the Rules of the
People's  Republic of China on  accounting  for Chinese  Foreign  Joint  Venture
Enterprises and other relevant rules and regulations of the People's Republic of
China.

            'PERMITTED  INDEBTEDNESS'  means,  for any Person:  (i) Indebtedness
incurred  under the Financing  Documents;  (ii)  Indebtedness  arising under the
Project  Documents;  (iii) trade  accounts  payable (other than for (a) borrowed
money and operating  lease  obligations  or (b) the purchase of equipment with a
value, individually or in the aggregate, in excess of US$1,000,000) arising, and
accrued expenses  incurred,  in the ordinary course of business,  and (iv) other
Indebtedness  of such Person not to exceed in the  aggregate  US$500,000  or the
equivalent thereof.

            'PERMITTED LIENS' means (i) Liens specifically permitted or required
by or created by any of the Financing  Documents or the Project Documents;  (ii)
Liens expressly subordinated to the Liens created by the Financing Documents and
subordinated  in  right  of  payment  to  the  Loans;  (iii)  Liens  for  taxes,
assessments or  governmental  charges not due and delinquent or due, but subject
to  a  Good  Faith  Contest;   (iv)   carriers',   warehousemen's,   mechanics',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of  business  or that are the subject of a Good Faith  Contest;  (v)  easements,
rights-of-way,   reservations,   restrictions,   covenants,  and  other  similar
encumbrances  affecting any property subject to the Liens of any of the Security
Documents, granted in the ordinary course of business, which do not individually
or in the  aggregate  have a  Material  Adverse  Effect;  and  (vi)  attachment,
judgment and other similar Liens  arising in connection  with court  proceedings
that are the subject of a Good Faith Contest.

            'PERSON'  or 'PERSON'  means any  individual,  sole  proprietorship,
corporation,  partnership,  joint venture,  limited  liability  company,  trust,
unincorporated  association,  institution,  government  authority  or any  other
entity.

            'POWER  PURCHASER'  means the Chengdu  Huaxi Power  Company  (Group)
Limited, a company organized under the laws of the PRC.

            'POWER PURCHASE CONTRACT' means the Power Purchase  Contract,  dated
--------, 1996, between the Company and Power Purchaser.

            'POWER  STATION' means the 1x50 MW natural gas fired power plant, to
be  constructed  in Jintang  County,  Sichuan  Province,  the PRC, as more fully
described in Appendix A to the Construction Contract.

            'PRC' or 'CHINA' means the People's Republic of China.

            'PRICE  ADJUSTMENT  CONTRACT' means the Electric  Tariff  Adjustment
Method for Chengdu  AES Kaihua Gas Turbine  Power  Company  Limited  dated as of
---------, 1996 between the Power Purchaser and the Company.

            'PROJECT  DOCUMENTS'  means the Joint  Venture  Contract,  the Power
Purchase  Contract,  the  Construction  Contract,   Fuel  Supply  Contract,  the
Indemnification  Contract, the Land Contract, the Letter(s) of Undertaking,  the
Interconnection  Contract, the Supplemental  Interconnection Contract, the Price
Adjustment Contract,  any contract or agreement entered into in substitution for
the foregoing and any other contract or letter or instrument entered into by the
Company with respect to the Power Station.

            'PROJECT COSTS' means all costs and expenses paid, incurred or to be
incurred  by  the  Company  in   connection   with  the   development,   design,
construction, financing, start-up, ownership and operation of the Power Station,
including,  without limitation, (i) all construction costs of the Power Station,
including all amounts  payable  under the  Construction  Contract,  (ii) initial
spare parts,  start-up,  and operator  mobilization  costs,  and working capital
requirements,  (iii)  development fees and development  costs  recoveries,  (iv)
costs  related to any of the Loans or the loans under the Other  Contracts,  (v)
related  legal  and  other  transaction  and  financing  costs,  (vi)  insurance
premiums,  (vii) costs of Site, (viii) operating and maintenance expenses,  (ix)
fees and expenses payable to the Arranger and the Other  Arrangers,  (x) initial
working  capital and (xi) all other Power Station related costs and expenses for
the construction and financing of the Power Station.

            'RMB' or 'RENMINBI'  means Renminbi yuan, the lawful currency of the
PRC.

            'SECURITY  DOCUMENTS'  means the  Assignment  Contract to be entered
into among the Arranger, the Other Arrangers and the Company.

            'SITE'  means,  in the  aggregate,  the  land  subject  to the  Land
Contract.

            'SUPPLEMENTAL   INTERCONNECTION  CONTRACT'  means  the  Supplemental
Interconnection and Dispatch Contract dated ---------,  1996 between the Company
and the Sichwan Power Dispatch Bureau.

            'TERM LOAN' has the meaning provided in Section 2.1(b).

            'TERM LOAN NOTE' has the meaning provided in Section 2.2(b).

            'TERM LOAN  REPAYMENT  DATES' has the  meaning  provided  in Section
2.4(b).

            'UNITED   STATES'  or  'U.S.'   means  all  states,   commonwealths,
territories and possessions of the United States of America.

            'WITHHOLDING  TAXES'  means any  present  or future  withholding  or
deduction  for, any present or future  withholding  taxes  imposed by the PRC or
Labuan or any Governmental Authority within the PRC or Labuan.

         (a) Principles of Construction. Unless the context otherwise requires:

               (i) reference to any statute or statutory provision shall include
         any  amendment,   modification   or  reenactment  of,  any  legislative
         provisions   substituted   for  and  all   legislation   and  statutory
         instruments issued under, such statute or statutory provisions;

               (ii) words  defined as denoting  the singular  shall  include the
          plural and vice versa;

               (iii) references denoting individuals shall include corporations,
          associations,  trustees,  instrumentalities and partnerships, and vice
          versa;

               (iv) words denoting any gender shall include all genders;

               (v) references to a Section,  Schedule, Exhibit or party shall be
          construed as  references to a Section,  Schedule,  Exhibit or party to
          the document in which such reference is made;

               (vi)  references  to  any  document,  lease,  contract  or  other
          agreement of any nature shall, as appropriate, include or be construed
          as references to such document,  lease, contract or other agreement as
          amended,  modified,  extended,  renewed,  restated,   supplemented  or
          replaced from time to time;

               (vii) references to any party in any document,  deed or agreement
          shall include its successors and permitted assignees;

               (viii) headings used in any document are for convenience only and
          shall be disregarded in construing such document; and

               (ix) the  words  'include',  'includes'  or  'including'  are not
          limiting.





                                                                         Annex B
                                                                 to the Contract




                                   COMMITMENTS



                                                                      COMMITMENT
                                                                      ----------

         Construction Loans                                            US$------






         Term Loan                                                     US$------






                                                                       Exhibit 1
                                                                 to the Contract


                            Form of Construction Note

                                                                          [Date]
                                                                      [Location]

US$-------------

                  FOR VALUE RECEIVED,  Chengdu AES KAIHUA Gas Turbine Power Co.,
Ltd. (the  'Company')  hereby  promises to pay to the order of AES Tian Fu Power
Company (L) Ltd., a company organized under the laws of Labuan (the 'Arranger'),
the aggregate unpaid  principal amount of all Construction  Loans (as defined in
the Contract referred to below) not exceeding in the aggregate the principal sum
of -------------------- (U.S.$------).

                  All Construction Loans made by the Arranger to the Company and
all repayments of the principal thereof shall be recorded by the Arranger on the
Schedule attached hereto.

                  This Note shall be repaid in full on the  Mandatory  Repayment
Date (as such term is defined in the Contract).

                  This Note evidences the obligations of the Company under,  and
is referred to in, the Support Contract, dated as of -------------,  between the
Company and the Arranger (as from time to time in effect,  the 'Contract'),  and
is entitled to the benefits thereof.

                  The  Company  also  promises  to pay  interest  on the  unpaid
principal  amount hereof from the date hereof until paid at the rates and at the
times provided in the Contract.

                  Principal of, and premium,  if any, and interest on, this Note
shall be payable in immediately  available funds in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, in the manner provided in the Contract.

                  This Note is secured by the Security  Documents referred to in
the Contract and is entitled to the benefits thereof.

                  In case an Event of Default (as defined in the Contract) shall
occur and be continuing,  the principal of and accrued interest on this Note may
be declared to be due and payable in the manner and with the effect  provided in
the Contract.

                  The Company  hereby  waives  presentment,  demand,  protest or
notice of any kind in connection with this Note.

                  THIS  NOTE  SHALL  BE  CONSTRUED  IN  ACCORDANCE  WITH  AND BE
GOVERNED BY THE LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.





CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.



By:-------------------------------
   Name:
   Title:








                                                                      Schedule A
                                                                 to Construction
                                                                       Loan Note


                                    AMOUNT           PRINCIPAL          UNPAID
         DATE                       BORROWED         REPAID             BALANCE
         ----                       --------         ------             -------





                                                                       Exhibit 2
                                                                 to the Contract



                             Form of Term Loan Note


                                                                          [Date]
                                                                      [Location]

US$----------------

         FOR VALUE RECEIVED, Chengdu AES KAIHUA Gas Turbine Power Co., Ltd. (the
'Company')  hereby promises to pay to the order of AES Tian Fu Power Company (L)
Ltd.,  a  company  organized  under  the laws of Labuan  (the  'Arranger'),  the
aggregate the principal sum of ------------------- (U.S.$------).

         The amounts and dates of the repayment of this Note are as indicated on
the attached Schedule A.

         This Note  evidences  the  obligations  of the  Company  under,  and is
referred to in, the Support Contract,  dated as of --, 1996, between the Company
and the  Arranger  (as from  time to time in  effect,  the  'Contract'),  and is
entitled to the benefits thereof.

         The  Company  also  promises to pay  interest  on the unpaid  principal
amount  hereof  from the date  hereof  until  paid at the rates and at the times
provided in the Contract.

         Principal of, and premium,  if any, and interest on, this Note shall be
payable in  immediately  available  funds in such coin or currency of the United
States  of  America  as at the time of  payment  shall be legal  tender  for the
payment of public and private debts, in the manner provided in the Contract.

         This Note is  secured  by the  Security  Documents  referred  to in the
Contract and is entitled to the benefits thereof.

         In case an Event of Default  (as defined in the  Contract)  shall occur
and be  continuing,  the  principal of and accrued  interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Contract.

         The Company hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.

         THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY THE
LAWS OF THE PEOPLE'S REPUBLIC OF CHINA.


CHENGDU AES KAIHUA GAS TURBINE POWER CO., LTD.


By:-----------------------------
   Name:
   Title:






                                   Schedule A
                                to Term Loan Note


Amortization Schedule for Term Loan Note

 YEAR              MONTH                PRINCIPAL REPAYMENT SCHEDULE
                                                    U.S.$










                  [ to be completed upon issuance of the Note ]





                                                                       Exhibit 3
                                                                 to the Contract



                              Request for Borrowing


                                                                          [Date]


AES Tian Fu Power Company (L) Ltd.



Gentlemen:

                  The  undersigned,  Chengdu AES KAIHUA Gas  Turbine  Power Co.,
Ltd., refers to the Support Contract, dated as of ------------, 1996 (as amended
from time to time, the 'Contract' the terms defined therein being used herein as
therein defined),  among the undersigned and you, and hereby requests,  pursuant
to Section 3.1 of the Contract, that a borrowing be made under the Contract, and
in that connection  sets forth below the information  relating to such borrowing
(the 'Proposed Borrowing') as required by Section 3.1 of the Contract:

                  (i) The Business Day of the Proposed Borrowing is --, 19--.

                  (ii) The Proposed  Borrowing is to consist of [a  Construction
Loan in an  aggregate  principal  amount  equal  to  $---]  [a  Term  Loan in an
aggregate principal amount equal to $---].

                  (iii) The name and  account  number of the bank to which funds
are to be transferred is ----.


                                     Very truly yours,

                                     CHENGDU AES KAIHUA GAS TURBINE 
                                     POWER CO., LTD.

                                      By:--------------------------
                                         Name:
                                         Title: