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Published: 2008-03-26

Wuhu Power Plant Operation & Offtake Contract - Wuhu Shaoda Electric Power Development Co. Ltd. and Anhui Provincial Electric Power Corp.



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


                                Dated 5th July 1996




             WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED



                                       And





                   ANHUI PROVINCIAL ELECTRIC POWER CORPORATION








            PHASE IV OF WUHU POWER PLANT OPERATION & OFFTAKE CONTRACT







            This Contract has been entered into on 5th July, 1996 by and

            BETWEEN

            Anhui Provincial Electric Power Corporation ("Anhui Power"); and

            Wuhu Shaoda Electric Power Development Company Limited (hereinafter
            referred to as the "Joint Venture")

            IT IS HEREBY AGREED as follows:


            ARTICLE 1.          DEFINITIONS

                      With respect to this Contract the following expressions
                      shall have the meanings set forth below:

            1.1     "Actual Completion Date" shall mean, as defined in the EPC
                    Contract, in respect of any Unit, the date on which such
                    Unit has successfully completed its 72-hour and 24-hour
                    trial operation and other tests required by applicable laws
                    and regulations in China and such completion has been
                    certified by the engineering consultant approved by the US$
                    Creditor(s).

            1.2     "Annual Generation Plan" shall mean the annual generation
                    plan compiled in accordance with Article 6.2.

            1.3     "Approved Operating Costs" shall mean the portion of the
                    Electricity Fee deemed by the relevant price control
                    authorities to be attributable to the operating and fuel
                    costs of the Power Plant.

            1.4     "Approved Swap Agreement" means an agreement with respect to
                    the exchange of payments representing interest rates entered
                    into by the Joint Venture in compliance with and according
                    to the terms of the US$ Senior Loan Contract.

            1.5     "Responsibility of the Joint Venture" has the meaning set
                    forth in Article 8.3.

            1.6     "Cost Component of the Joint Venture" shall mean, in respect
                    of any period, the portion of the Electricity Fee
                    attributable to the payment of the administration and
                    management expenses, insurance premium and expenses, taxes
                    levied on the business transactions of the Joint Venture,
                    auditor's fees, engineering consultant fees, advisory fees
                    and all other fees of a similar nature incurred by the Joint
                    Venture for such period.

            1.7     "Contract Completion Date" shall mean in respect of any Unit
                    the date as defined in Article 5 of the EPC Contract in
                    respect of such Unit.

            1.8     "Creditor" shall mean any creditor or legal entity providing
                    financing pursuant to a Financing Contract.

            1.9     "Delivery Point" shall mean the measuring point at the high
                    voltage side of the step-up transformer.

            1.10    "Electricity Sales Tax" or "EST" shall mean the Value Added
                    Tax and surcharges levied against the Joint Venture by any
                    State or local tax authorities in accordance with the
                    Provisional Regulations of Value Added Tax of the People's
                    Republic of China and the Rules of Implementation thereof,
                    the Notice concerning the Regulations on Value Added Tax for
                    Electricity Products published by the State Tax
                    Administration, and/or other similar taxes of whatever name
                    or according to any laws or regulations which replaced the
                    above laws and regulations and/or any other value added or
                    sales taxes (i.e. all
 
                                       1

                    taxes or surcharges charged against the Joint Venture on the
                    amount of electricity sold by the Joint Venture or on the
                    amount of any payments received by the Joint Venture).

            1.11    "Electricity Fee" shall mean in respect of any Unit for any
                    12 month period the Tariff for that 12 month period as
                    approved by the pricing control authority multiplied by the
                    Minimum Purchase Quantity of such Unit for such 12 month
                    period.

            1.12    "Financing Contract" shall mean any contract entered into by
                    and between the Joint Venture and one or more Creditors by
                    which the Joint Venture is to obtain, inter alia,
                    construction funds for the Power Plant, including the US$
                    Senior Loan Contract, the US$ Subordinated Loan Contract and
                    the RMB Loan Contract.

            1.13    "FX Financing Contracts" shall mean the US$ Senior Loan
                    Contract, US$ Subordinated Loan Contract, all security and
                    other documents entered into by the Joint Venture pursuant
                    to the terms of the US$ Senior Loan Contract and all
                    Approved Swap Agreements (if any) and any other agreement
                    pursuant to which the Joint Venture incurs foreign exchange
                    obligations in connection with the planning, arrangement,
                    construction, operation or management of the Power Plant and
                    which has been entered into by the Joint Venture in
                    compliance with the terms of the US$ Senior Loan Contract
                    and US$ Subordinated Loan Contract.

            1.14    "Joint Venture Contract" shall mean the contract entered
                    into on 12 February 1996 for the establishment of the Joint
                    Venture and the development of the Power Plant, as amended
                    from time to time.

            1.15    "KWH" shall mean Kilowatt Hour.

            1.16    "Minimum Purchase Quantity" or "MPQ" shall mean, unless
                    otherwise specified, the Minimum Purchase Quantity of each
                    Unit of the Power Plant for a 12 month period and shall have
                    the meaning stipulated in Article 2.2.

            1.17    "Month" shall mean calendar month.

            1.18    "Power Grid" shall mean the electricity transmission grid in
                    Anhui Province.

            1.19    "Operation Services" shall mean the services in respect of
                    the management, operation and maintenance of the Power Plant
                    to be performed pursuant to Article 4.

            1.20    "Power Plant" shall mean the Power Plant which will be
                    built, designed, constructed, commissioned and completed in
                    Wuhu City, Anhui Province, People's Republic of China,
                    consisting of 2 x 125 MW coal-fired generating units and all
                    buildings, equipment and machines, including but not limited
                    to the transmission facilities linking the Power Plant to
                    the Power Grid, office and other auxiliary buildings, coal
                    and ash handling facilities, civil works and marine works in
                    accordance with the terms and conditions of the Joint
                    Venture Contract and the EPC Contract.

            1.21    "Power Plant Force Majeure" shall have the meaning as
                    defined in Article 12.1.

            1.22    "EPC Contract" shall mean the contract entered into by and
                    between the Joint Venture and Anhui Power for the purpose of
                    the overall engineering, procurement and construction of the
                    Power Plant.

            1.23    "Pre-Operation Services" shall mean the services to be
                    performed in relation to each Unit before such Unit comes
                    into operation as detailed in Article 4 and Appendix III.

            1.24    "Renminbi" and "RMB" shall mean the lawful currency of the
                    People's Republic of China.

                                       2

            1.25    "RMB Equity Return Portion" shall mean the portion of the
                    Electricity Fee attributable as profits payable to Parties C
                    and D under the Joint Venture Contract in respect of the
                    relevant 12 month period.

            1.26    "RMB Financing Portion" shall mean the portion of the
                    Electricity Fee to enable the Joint Venture to repay the
                    principal and interest due and payable on any RMB debt of
                    the Joint Venture in respect of the relevant 12 month
                    period.

            1.27    "Tariff" shall mean the on-grid tariff per KWH of
                    electricity purchased by Anhui Power and approved by
                    relevant Chinese authorities. The tariff shall be adjusted
                    in accordance with Article 7.

            1.28    "Tariff Commencement Date" for Unit I shall mean the earlier
                    of (a) the Actual Completion Date of Unit I and (b) the date
                    falling six months after the date of the US$ Senior Loan
                    Contract and for Unit II shall mean the earlier of (a) the
                    Actual Completion Date of Unit II and (b) the date falling
                    twelve months after the date of the US$ Senior Loan
                    Contract.

            1.29    "Termination Payment" shall mean an amount in RMB which,
                    when received by the Joint Venture and (where relevant)
                    converted into US$ (and net of any associated costs payable
                    by the Joint Venture) shall be the greater of (i) the
                    expected revenue of the Power Plant net of operating and
                    fuel costs over the period from the date of termination to
                    the original scheduled expiry date of this Contract
                    discounted for early receipt using a discount rate of ten
                    per cent. per annum and (ii) an amount sufficient to
                    discharge in full all obligations and liabilities (actual
                    and contingent) of the Joint Venture in respect of (a)
                    operating expenses of the Power Plant, (b) US$ Senior Debt
                    Costs and (c) any other debt or liability of the Joint
                    Venture which has not been effectively subordinated to the
                    US$ Senior Debt Costs.

            1.30    "Termination Event" shall mean any Event of Default (as
                    defined in the US$ Senior Loan Contract).

            1.31    "Unit" shall mean either Unit I or Unit II.

            1.32    "Unit I" shall mean the first unit of the Power Plant to be
                    completed, together with the common facilities and all
                    essential, auxiliary and service facilities.

            1.33    "Unit II" shall mean the second unit of the Power Plant to
                    be completed, together with the common facilities and all
                    essential, auxiliary and service facilities.

            1.34    "Unit Commissioning" shall mean, in respect of any Unit, the
                    commissioning and bringing into operation and service of
                    such Unit until the relevant Unit has successfully completed
                    its 72-hr. and 24-hr. tests.

            1.35    "US Dollars" and "US$" shall mean the lawful currency of the
                    United States of America.

            1.36    "US$ Equity Return Portion" shall mean the portion of the
                    Electricity Fee attributable as profit to Parties A and B
                    under the Joint Venture Contract in respect of the relevant
                    12 month period.

            1.37    "US$ Financing Component" shall mean the portion of the
                    Electricity Fee to enable the Joint Venture to make all
                    payments of principal, interest, indemnity amounts, fees,
                    costs and expenses and other amounts due and payable under
                    the FX Financing Contracts in respect of the relevant 12
                    month period.

            1.38    "US$ Senior Debt Costs" means all and any sums (whether
                    principal, interest, indemnity amounts, fees, costs,
                    expenses or other amounts) which are or will be at any
                    relevant

                                       3

                    time due and payable, whether on their due date, on
                    demand or howsoever, under any FX Financing Contract in each
                    case as conclusively determined by the Facility Agent (as
                    defined in the US$ Senior Loan Contract).

            1.39    "US$ Subordinated Loan Contract" means the agreement between
                    the Joint Venture and AES China Holding (L) Company Limited
                    for the provision of a loan of US$18,000,000 to the Joint
                    Venture.

            1.40    "US$ Senior Loan Contract" means the agreement between the
                    Joint Venture and certain Creditors for the provision of a
                    loan of US$65,000,000 to the Joint Venture.

            1.41    "Year" shall mean a calendar year (from January 1st to
                    December 31st).

            1.42    "Pre-Commercial Operation Period" shall mean in respect of
                    each Unit the first 185 days after the Actual Completion
                    Date of that Unit.

            1.43    "IIR" means the rate of interest which discounts the flow of
                    revenue received by an investment so that the net present
                    value of the cash flow is equal to the capital sum invested.

            1.44    "Interconnection Contract" means the contract dated the date
                    hereof between the Joint Venture and Anhui Power providing
                    for the Power Plant to be connected to the Power Grid.


            ARTICLE 2.          SALE AND PURCHASE OF ELECTRICITY

            2.1     Minimum Generation Quantity

                      2.1.1    In the first 365 days starting from the Actual
                               Completion Date of each Unit, the Minimum
                               Generation Quantity (MGQ1) for that Unit shall be
                               125,000 X 5,000 KWH

                      2.1.2    Thereafter the Minimum Generation Quantity
                               (MGQ2)for each Unit subsequent to the first 365
                               days (reduced pro rata if less than one year) is:

                               125,000 X 5,500 KWH

            2.2     Minimum Purchase Quantity

                      2.2.1    The Minimum Purchase Quantity (MPQ1) of each Unit
                               for the first 365 days starting from the Actual
                               Completion Date of that Unit is:

                               MGQ1 x (1-7.6%)

                      2.2.2    The Minimum Purchase Quantity (MPQ2) for each
                               Unit thereafter (reduced pro rata if less than
                               one year) is:

                               MGQ2 x (1-7.6%)

            2.3       Obligation to Take Electricity

                      Anhui Power shall:

                      (a)      Take all electricity generated and available to
                               be taken off from the Delivery Point by each Unit
                               during the Unit Commissioning and interconnection
                               thereof as and when it is generated in accordance
                               with the program for Unit Commissioning of the
                               Joint Venture;

                                       4

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


                      (b)      from the Actual Completion Date of Unit I to the
                               Actual Completion Date of Unit II, take
                               electricity generated by Unit 1 in accordance
                               with the Annual Generation Plan agreed under
                               Article 6, namely, MPQ1 x the number of days
                               between the Actual Completion Dates of the two
                               Units/365 days; and

                      (c)      from the Actual Completion Date of Unit II until
                               the end of the Joint Venture term, take not less
                               than the MPQ of both Units during each year
                               (reduced pro rata if less than a year).

            2.4       Commissioning

                      The Joint Venture and Anhui Power shall consult with each
                      other, as soon as practicable, on the proposed
                      commissioning schedule, including testing dates, and Anhui
                      Power shall notify the Joint Venture immediately on each
                      occasion on which it will be ready to commence any such
                      test.

            2.5       Steady Electricity Generation

                      Within the allowed range of the Power Grid, Anhui Power
                      shall ensure that the Power Plant is always kept running
                      at a load at which the Power Plant may be operated in a
                      stable condition in accordance with all relevant
                      regulations and rules of China including without
                      limitation those issued from time to time by the Ministry
                      of Electric Power or other competent authority.

            2.6       Steady Electricity Offtake

                      Anhui Power shall maintain a steady offtake of electricity
                      from the Power Plant.

            2.7       Offtake During Pre-Commercial Operation Period

                      The first 185 days after the Actual Completion Date of
                      each Unit shall be the Pre-Commercial Operation Period of
                      that Unit. Anhui Power shall offtake the electricity
                      generated during the Pre-Commercial Operation Period by
                      each Unit and make payment therefor at on-grid Tariff (as
                      determined under Article 7) and enable the Unit(s) to
                      start and shut down for load adjustments. The Joint
                      Venture shall compensate Anhui Power on the basis of 
                      [***] on-grid electricity. Such compensation
                      shall be part of the generation cost of the Power Plant
                      and form part of the projected operating costs.


            ARTICLE 3.          DELIVERY OF ELECTRICITY

            3.1       Delivery Point

                      When electricity is delivered through the Delivery Point
                      to the Power Grid, it shall be deemed to have been
                      received by the Power Grid.

            3.2       Measurements and Records

                      The quantities of electricity delivered shall be measured
                      and recorded in accordance with the provisions of Article
                      5 of the Interconnection Contract. Such measurements and
                      record shall, in the absence of manifest error and
                      omission, be conclusive and final. Anhui Power and the
                      Joint Venture shall consult with each other to determine
                      the procedure for further verification relating to the
                      above which may, from time to time, be considered
                      necessary.

                                       5


            ARTICLE 4.          OPERATION OF THE POWER PLANT

            4.1       Entrusting Anhui Power as Operator

                      The Joint Venture appoints Anhui Power as operator
                      (Operator), and Anhui Power accepts the appointment to act
                      as Operator in connection with the management, operation
                      and maintenance of the Power Plant. The role of the
                      Operator includes the obligation to perform the
                      Pre-Operation Services, Operation Services (see Appendix
                      III for details) and the obligation of coal supply to the
                      Power Plant.

            4.2       General

            4.2.1     When performing the Operation Services, Anhui Power shall
                      not cause the Joint Venture to breach any laws and
                      regulations relevant to the operation of the Power Plant
                      and the terms of any other contracts to which the Joint
                      Venture is a party.

            4.2.2     Anhui Power shall operate the Power Plant in accordance
                      with good industry operating practice for thermal power
                      plants and carry out its Operation Services in order to
                      achieve commercial interests of the Joint Venture as a
                      priority;

            4.2.3     As part of the Operation Services, Anhui Power shall
                      ensure that the Power Plant is regularly and properly
                      maintained and overhauled so that it is able to generate
                      the Minimum Purchase Quantity for both Units throughout
                      the term of this Contract.

            4.3       Operation

                      Subject to compliance with Article 4.4 and with good
                      operating practice for thermal power plants, from the
                      Actual Completion Date of Unit I, Anhui Power shall use
                      best efforts to keep the Power Plant operating at such
                      capacity as may from time to time be necessary to meet the
                      Power Grid's demand for electricity.

            4.4       Operation in Accordance with Design Specifications:

                      In order to ensure that the Power Plant operates safely
                      and efficiently during both Units' designed operation
                      period and to ensure that the Power Plant does not
                      encounter avoidable breakdowns, damage or deterioration
                      throughout the period for which it has been designed to
                      operate, the Power Plant must be operated in accordance
                      with its operating manuals so as not to exceed the
                      limitations on operation recommended by the equipment
                      manufacturer.

            4.5       Scope of Entrustment

                      Anhui Power shall be responsible for the operation,
                      management and maintenance of the 2 x 125 MW Units and its
                      ancillary facilities and for supplying sufficient fuel to
                      the Power Plant.

            4.6       Pre-Operation Services

                      Anhui Power shall:

                       (a)    perform the services necessary to prepare the
                              Power Plant to commence operations and provide
                              on-job training of the operation staff;

                       (b)    provide the necessary staffing and resources to
                              the Joint Venture to enable the Joint Venture to
                              perform its obligations with respect to the Power
                              Plant construction and the commissioning of the
                              Units. The related expenses shall be included in
                              the Project Budget as stipulated in Appendix I of
                              the EPC Contract;

                                       6

                      (c)     provide such advice and support to the Joint
                              Venture in connection with the construction of
                              the Power Plant and the commissioning of the
                              Units as may be reasonably expected to be within
                              the scope of Anhui Power's qualifications,
                              competence and experience, and as the Joint
                              Venture may reasonably request; and

                       (d)    provide the other Pre-Operation Services, as
                              detailed in Appendix III.

                              The obligations of Anhui Power in relation to the
                              Pre-Operation Services for each Unit will
                              commence upon execution of this Contract and
                              remain in effect until discharged by the end of
                              the Defects Liability Period (as defined in the
                              EPC Contract).

            4.7       Operation Services

                      Upon and after the Actual Completion Date of each Unit,
                      Anhui Power shall provide the following Operation Services
                      throughout the continuance of this Contract to such Unit
                      as follows:

                       (a)    perform all its duties and obligations in
                              relations to the Power Plant operation, so as to
                              fulfil Anhui Power's obligations under this
                              Article 4; and

                      (b)     provide such advice and support to the Joint
                              Venture in connection with the operation of the
                              Power Plant as may be reasonably expected to be
                              within the scope of Anhui Power's qualifications,
                              competence and experience, and as the Joint
                              Venture may reasonably request.

                       (c)    provide the other Operation Services, as detailed
                              in Appendix III.

            4.8       Coal Supply

                      4.8.1    Anhui Power is responsible for the coal supply to
                               the Power Plant according to the specifications
                               set forth in Appendix IV hereof, and shall
                               deliver coal to the Power Plant's coal yard so as
                               to ensure that the Power Plant has sufficient
                               coal at all relevant times as may be necessary to
                               generate the Minimum Generation Quantity for both
                               Units as set out in Article 2.1.

                      4.8.2    Before the Actual Completion Date of each Unit,
                               Anhui Power shall provide fuel oil, coal,
                               chemicals, consumables and personnel needed for
                               commissioning of the Unit during the trial
                               operation period which expenses have been
                               included in project budget set out in Appendix I
                               of the EPC Contract.

            4.9       Plans and Budget

                      Anhui Power shall consult and agree with, and submit to
                      the Joint Venture before the end of each year the
                      generation plan and the annual budget of the generation
                      and operating cost of the Power Plant for the next year.

            4.10      Information

                      Anhui Power shall periodically provide information related
                      concerning the operation of the Power Plant and the
                      carrying out of the Pre-Operation Services and the
                      Operation Services to the Joint Venture. Anhui Power shall
                      provide the Joint Venture with periodic reports and send
                      copies of the reports to each party to the Joint Venture
                      Contract and the Engineering Consultant referred to under
                      the EPC Contract. The reports shall include financial and
                      operation statements. (For details, see Appendix III,
                      Section 5).

                                       7

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


            4.11      Key Personnel

                      After consulting with the Joint Venture, Anhui Power shall
                      nominate a qualified, competent and experienced person to
                      act as Plant Manager, who shall not be replaced without
                      prior consultation with the Joint Venture. If the Plant
                      Manager resigns, or is dismissed or is otherwise unable to
                      perform his duties, Anhui Power shall promptly consult
                      with the Joint Venture, and shall promptly appoint another
                      qualified, competent and experienced person to fill the
                      vacancy.

            4.12      Sub-Contracting

                      4.12.1   Anhui Power shall not delegate or
                               subcontract the entire Pre-Operation Services or
                               the Operating Services to any third party.

                      4.12.2   Subject to Article 4.12.1 hereof, Anhui
                               Power may subcontract part only of the
                               Pre-Operation Services or the Operation Services
                               to specialists or other subcontractors as are
                               necessary to enable it to fulfil its obligations.
                               Such subcontracting shall not relieve Anhui Power
                               from any of its duties, obligations and
                               liabilities under this Contract. Anhui Power
                               shall be fully responsible for the actions and
                               breaches of all subcontractors as if they were
                               its own actions and breaches.

            4.13      Strict Obligations

                      Anhui Power's obligations under this Contract are strict
                      obligations. Anhui Power shall not be relieved from any of
                      its obligations under this Contract by reason of any
                      exercise or non-exercise, or delay in exercise, by the
                      Joint Venture of any or all of its powers or rights under
                      this Contract.


            Article 5.          OPERATION DUTIES

            5.1       General

                      The Joint Venture shall provide assistance and advice in
                      connection with the placing of the insurance identified in
                      Article 11 which shall be effected by Anhui Power on the
                      behalf of the Joint Venture.

            5.2       Working Capital

                      The Joint Venture shall be required to provide to Anhui
                      Power a [***] working capital prior to the Actual
                      Completion Date of Unit 1.

                      During the operational period Anhui Power shall be
                      responsible for arranging and obtaining any necessary
                      additional working capital on its own account as required
                      and the interest expenses incurred in connection therewith
                      shall be counted as part of the cost of generation. The
                      Joint Venture shall provide Anhui Power with assistance in
                      the arrangement of such loans but shall not be obliged to
                      advance, or procure the advance of, or to guarantee or
                      otherwise incur any liability (contingent or actual) in
                      respect of any advance by a third party of, any funds to
                      Anhui Power.

            5.3       Limitation of Liabilities and Mitigation

                      5.3.1    If the Power Plant cannot generate electricity
                               because of a Power Plant Force Majeure event
                               Anhui Power shall use all efforts to resume
                               operation of the Power Plant at full capacity as
                               soon as possible.

                      5.3.2    Obligations of Anhui Power

                                       8

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


                               On and from the Actual Completion Date of each
                               Unit, Anhui Power shall be fully responsible for
                               ensuring that that Unit generates its Minimum
                               Purchase Quantity. If the relevant Unit cannot
                               generate its Minimum Purchase Quantity, the
                               resulting shortfall in generation shall be
                               compensated by Anhui Power. Anhui Power's
                               liability under this Article 5.3.2 shall only be
                               relieved within the limit of this Contract due to
                               the liability of the Joint Venture or Power Plant
                               Force Majeure in accordance with and pursuant to
                               Article 8.5.

            5.4       Payments for Pre-Operation Services

                      In order to enable Anhui Power to carry out the
                      Pre-Operation Services pursuant to Article 4.6, the Joint
                      Venture shall pay the Pre-operation service fees to Anhui
                      Power. Pre-operation services fees are included in the
                      Project Budget in Appendix I of the EPC Contract.

            5.5       Payment for Operation Service

                      In order to enable Anhui Power to carry out the Operation
                      Services pursuant to Article 4.7, the Joint Venture shall
                      pay Anhui Power a monthly management fee, calculated at a
                      rate of [***] of on-grid power after the
                      Pre-Commercial Operation Period of each Unit. Such fee
                      will be counted as part of the generation cost of the
                      Power Plant and form part of the projected operating
                      costs.

            5.6       Payment - General

                      Anhui Power shall only be entitled to receive from the
                      Joint Venture the amounts expressly provided for under
                      this Contract.


            Article 6.          EXCHANGE OF INFORMATION

            6.1       Preparation of Operation  Plans:  In order to ensure that
                      the Power Plant operates efficiently at all times, 
                      according to Article 4.4, Anhui Power shall:

                      (a)      compile a  preliminary operation plan no later  
                               than the end of July of each year, and specify:

                               (i)     the Power Plant's projected average 
                                       operation load for the succeeding year;

                               (ii)    the projected periods during which each 
                                       Unit may be shut down for overhaul, 
                                       repair and maintenance in the succeeding
                                       year; and

                      (b)      hold regular meetings with the Joint Venture
                               regarding the offtake obligations and electricity
                               demands so that, subject to the above provisions,
                               Anhui Power can amend the relevant operation
                               schedule mentioned above if necessary, but
                               without prejudice to the Tariff or the MPQ of any
                               Unit.

            6.2       Annual Generation Plan

                      Anhui Power shall, no later than November of each year,
                      finalize and submit to the Joint Venture the Annual
                      Generation Plan for the Power Plant for the succeeding
                      year.

            6.3       Change in Load Level

                      After the Actual Completion Date of each Unit, generation
                      of electricity from such Unit shall comply with the
                      central scheduling and dispatch requirements for Anhui
                      Province (For details, see the Interconnection Contract).
                      The Power Plant must be operated in 

                                       9

                      accordance with the provisions of Article 4 and with good
                      thermal power plant operation practice.

            6.4       Exchange of Information

                      6.4.1    Anhui Power shall promptly notify the Joint
                               Venture of the occurrence if it becomes aware
                               that the maximum generating capacity of the Power
                               Plant is insufficient to meet the scheduled
                               operating load of the Power Plant.

                      6.4.2    Anhui Power and the Joint Venture shall hold
                               regular meetings to discuss and resolve any
                               problems so as to ensure the smooth operation of
                               the Power Plant and the smooth offtake of
                               electricity therefrom.


            Article 7.          Price and Terms of Payment

            7.1       The Calculation and Approval of the Tariff

                      During the term of this Contract the Tariff in any one
                      year shall, assuming that each Unit of the Power Plant
                      delivers its Minimum Purchase Quantity, be sufficient to
                      enable the Joint Venture to pay the Power Plant's
                      operating costs (including but not limited to fuel cost),
                      all amounts payable by the Joint Venture in that year in
                      respect of US$ Senior Debt Costs (including principal,
                      interest, fees and maintaining any retention/reserve
                      amounts required pursuant to the US$ Senior Loan Contract)
                      all amounts payable by the Joint Venture in that year in
                      respect of any other US$ loans and/or RMB loans, fees and
                      losses on conversion in foreign exchange, necessary
                      expenses of the Joint Venture, taxes to be paid, the Joint
                      Venture reserves and the investors' anticipated return on
                      equity of the Joint Venture and, for this purpose, where
                      any such amount is denominated in a currency other than
                      RMB, the applicable part of the tariff payment shall equal
                      an RMB amount that, after conversion into the applicable
                      foreign currency will enable the Joint Venture to
                      discharge the relevant amount. Anhui Power and the Joint
                      Venture will estimate and agree these costs in
                      consultation with the Facility Agent, and the Joint
                      Venture will submit the agreed proposed Tariff in respect
                      of the level of which it shall previously have consulted
                      with the Facility Agent to the relevant pricing
                      authorities for approval. The proposed on-grid Tariff will
                      be estimated in this manner and submitted for adjustment
                      on an annual basis.

            7.1.1     Components of the On-Grid Tariff

                      RMB Portion:
                      Loan principal
                      Reasonable profit
                      Salaries
                      Unforeseeable costs
                      Financing costs
                      Water costs
                      Materials
                      Repairs
                      Fuel
                      Depreciation
                      Taxes
                      Entrusted operation and management fees
                      Other expenses

                      US$ Portion:
                      Loan principal (of both the US$ Senior Loan
                      and US$ Subordinated Loan)

                                       10

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confidential treatment.


                      Financing costs (including interest, fees, realised 
          `           foreign exchange losses, other financing costs etc)
                      any amount required to fill the Dollar Retention Account 
                      to the Dollar Retention Amount (as defined in the US$ 
                      Senior Loan Contract)
                      Reasonable profit
                      Other expenses

            7.1.2     Approval of the On Grid Tariff:

                      The on-grid tariff submitted for approval shall be
                      calculated on the basis of 5,500 hours of annual
                      utilization of each Unit of generating equipment; in the
                      first year after the Actual Completion Date of each Unit,
                      the on-grid tariff submitted for approval will be
                      calculated on the basis of 5,000 annual utilization hours
                      of each Unit.

                      Without limiting the foregoing, the estimated on-grid
                      tariff shall be:

                      (a)      based on, among other matters, the loan repayment
                               period of 7 (seven) years (including construction
                               period) under the US$ Senior Loan Contract and
                               ten years under the US$ Subordinated Loan
                               Contract and the RMB Loan Contract, the loan
                               interest rate and other costs and the after tax
                               IRR of [***] since the
                               date of contribution of the registered capital;
                               and

                      (b)      adjusted via adjustment accounts to compensate
                               for unforeseeable increase in costs resulting
                               from changes in fuel, interest rate, exchange
                               rate, tax expenses and other factors

            7.1.3     Adjustment of On-Grid Tariff:

                      Before the end of each year, the Joint Venture shall
                      estimate and apply for the on-grid Tariff of the next year
                      according to the mechanism and taking into account all the
                      factors set out in this Article 7.1.

            7.1.4     On-Grid Tariff:

                      The Joint Venture will be responsible for estimating the
                      proposed on-grid Tariff for each Year and submitting the
                      annual application to the relevant pricing authorities in
                      Anhui Province for approval. Anhui Power shall provide
                      such assistance and information as the Joint Venture may
                      require.

            7.1.5     Composition of the Sales Tariff from the Power Grid to 
                      end-users:

                      (a)      electricity supply costs (including purchase 
                               costs)

                      (b)      reasonable profit

                      (c)      interest and principal repayments for the 
                               associated transmission project

                      (d)      taxes


            7.1.6     Approval of the Sales Tariff:

                      Anhui Power will be responsible for estimating the sales
                      tariff and submitting the application to the relevant
                      pricing authorities in Anhui Province for approval.

            7.1.7     Adjustment of Sales Tariff:

                                       11

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



                      The sales tariff will be adjusted annually according to
                      the same principle for adjusting the on- grid tariff.

            7.2       Generation before the Actual Completion Date:

                      All electricity generated by either Unit I or Unit II
                      before the relevant Tariff Commencement Date will be
                      delivered to Anhui Power free of charge while its
                      operating and fuel costs shall be borne by Anhui Power.

            7.3       Payment for Minimum Purchase Quantity:

                      Notwithstanding any other provision of this Contract, as
                      the strict liability of Anhui Power, irrespective of
                      whether the Actual Completion Date of either Unit has
                      occurred and as an unconditional obligation, Anhui Power
                      shall:

            (a)       from the Tariff Commencement Date of Unit I to the Tariff
                      Commencement Date of Unit II, pay the Electricity Fee of
                      Unit I on a monthly basis in the proportion specified in
                      Appendix I, and

            (b)       from the Tariff Commencement Date of Unit II pay the
                      Electricity Fee of both Units on a monthly basis in the
                      proportion specified in Appendix I.

                      Every payment shall be made to the Joint Venture not later
                      than the end of the following calendar month and made to a
                      bank account designated by the Joint Venture.

            7.4        Financial Arrangements

            7.4.1     The Joint Venture and Anhui Power shall make an estimate
                      of on-grid price and cost prior to the beginning of each
                      year pursuant to Article 7.1 and after submitting it to
                      the competent pricing authorities of Anhui Province for
                      approval, shall determine, in accordance with the
                      requirements of the US$ Senior Loan Contract, projected
                      unit operating cost of the on-grid price of that year. The
                      projected unit operating cost shall include unit operating
                      and fuel cost and other unit costs as described in Table 2
                      of Appendix I hereto and as approved by the Joint Venture
                      in compliance with its obligations under the US$ Senior
                      Loan Contract.

                      After review by the relevant price control authorities,
                      the portion of the projected operating costs of the type
                      set out in Table 2 of Appendix 1 approved for inclusion in
                      the Tariff for a particular Year shall be the Approved
                      Operating Costs for that Year. The Joint Venture shall
                      calculate the exact level of the Approved Operating Costs,
                      the Approved Operating Cost per KWH and the AOC Percentage
                      for that Year. The AOC Percentage is:

                       Approved Operating Cost per KWH x [***] %
                       ---------------------------------------
                                       Tariff

             7.4.2    It is agreed that, as operator of the Power Plant,
                      Anhui Power shall be responsible to satisfy all
                      operating costs of the Power Plant (including fuel
                      costs and other costs specified in Table 2 of Appendix
                      I) and Anhui Power shall indemnify the Joint Venture in
                      respect of every loss, cost, liability or expense which
                      the Joint Venture may suffer or incur as a consequence
                      of any failure by Anhui Power to fulfil its obligations
                      hereunder. The Approved Operating Cost shall be
                      deducted from the Electricity Fee. The deduction shall
                      be by retention of the AOC Percentage from each payment
                      to be made under this Contract by Anhui Power. Anhui
                      Power shall not be entitled to make such deduction if:-

                                       12

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


                      (a)   an Event of Default or prospective Event of Default
                            (each as therein defined) has occurred under the US$
                            Senior Loan Contract; or

                      (b)   Anhui Power is in breach of any of its obligations
                            under this Contract.

                      The remainder (after deduction if applicable) is payable
                      to the bank account designated by the Joint Venture.

            7.4.3     The Joint Venture will be responsible for converting
                      relevant parts of the Electricity Fee to foreign
                      currencies to enable the Joint Venture to meet its
                      obligations denominated in foreign currencies. By request
                      from the Joint Venture, Anhui Power shall provide
                      reasonable assistance to Joint Venture with respect to
                      said foreign exchange conversion and obtaining the
                      necessary approvals.

            7.5       Electricity Generation in Excess of Minimum Purchase 
                      Quantity:

            7.5.1     Anhui Power shall purchase the electricity generated in
                      excess of the Minimum Purchase Quantity for both Units at
                      the on-grid tariff. The income from this excess
                      electricity net of the AOC Percentage (provided that the
                      conditions in Article 7.4.2(a) and (b) are satisfied - if
                      such conditions are not satisfied such income shall be
                      paid gross) shall first be paid to the Joint Venture and
                      shall be applied by the Joint Venture in satisfaction of
                      any shortfall in Electricity Fee, consequent upon the
                      application of Article 8.5.2. To the extent there is any
                      remaining surplus:

                      (a)      In the first 365 days after the Actual Completion
                               Date of each Unit 30% of such surplus shall be
                               paid to Anhui Power as incentive payment for
                               taking electricity in excess of 10,000
                               utilisation hours (cumulative both Units).

                      (b)      For each year afterwards:

                               (i)     [***]% of such surplus will be paid to 
                                       Anhui Power as incentive payments for the
                                       portion in excess of 11000 hours if both
                                       Units achieve between 11000 and 13000
                                       utilization hours in aggregate;

                               (ii)    [***]% of such surplus will be the 
                                       incentive payments to Anhui Power for the
                                       portion in excess of 13000 hours if both
                                       Units achieve more than 13000 utilization
                                       hours in aggregate;

                               (iii)   Any remaining amount will be retained by
                                       the Joint Venture.

                      If pursuant to Appendix 1 a refund is due to Anhui Power
                      at the end of any Year, this shall be refunded by the
                      Joint Venture within 60 days following the end of the
                      relevant Year. Provided that the Joint Venture shall not
                      be obliged to make this refund at that time if, and for so
                      long as, this would jeopardise its ability to make
                      payments under the US$ Senior Loan Contract, US$
                      Subordinated Loan Contract and in respect of other
                      unsubordinated debt or liability of the Joint Venture as
                      they fall due.

            7.6       Invoices and Payments

            7.6.1     Anhui Power shall provide to the Joint Venture the
                      preceding months financial report for each Unit before the
                      14th day of each month, and shall exchange the accounts
                      records with each other so that, after the approval of the
                      Joint Venture, such records will be used as the basis for
                      making account books.

            7.6.2     Anhui Power shall provide to the Joint Venture annual
                      financial statements for each Unit within 60 days after
                      the end of each year.

                                       13

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



            7.6.3     The Electricity Fee, net of Approved Operating Costs
                      (where permitted as set out in Article 7.4.2) shall be
                      paid in full in accordance with the payment schedule set
                      out in Appendix I without any other deduction, set-off or
                      withholding of any nature whatsoever. If any withholding
                      is required by law, Anhui Power shall at the same time pay
                      to the Joint Venture such additional amounts as will
                      ensure that the Joint Venture receives the full amount of
                      the Electricity Fee on the due date as if such deduction
                      or withholding had not been made.

             7.6.4    Notwithstanding any other provision of this Contract
                      Anhui Power's obligation to pay the Electricity Fee in
                      accordance with this Article 7 and the Joint Venture's
                      right to receive such amounts are independent of the
                      Power Plant and production or dispatch therefrom and
                      the calculation and receipt by Anhui Power of the sales
                      tariff from the grid to end-users and any other matter
                      or circumstance whatsoever (except as and to the extent
                      that relief has been expressly provided for in Article
                      8.5.2) and Anhui Power's payment obligations hereunder
                      are absolute, unconditional and independent of any
                      other dealings between the parties or any other matter
                      or circumstance whatsoever.

            7.6.5     If Anhui Power cannot fulfil its payment obligations on
                      the date specified in this Contract, it shall pay to the
                      Joint Venture a late payment penalty calculated at [***]%
                      of the delinquent amount of payments per day on an
                      accumulative basis.


            Article 8.          CAUSE OF FAILURE TO GENERATE

            8.1       Determining the Causes

                      The following procedure shall be used to determine whether
                      any failure to generate electricity was caused by a Power
                      Plant Force Majeure event, or is the responsibility of
                      Anhui Power, or the responsibility of the Joint Venture.

            8.1.1     The Joint Venture and Anhui Power shall, acting through
                      their respective technical consultants, endeavor to reach
                      agreement on the cause for failure to generate
                      electricity. Any such agreement shall be binding to all
                      parties.

            8.1.2     If no agreement can be reached within 14 days after the
                      day on which all parties were notified, then either party
                      may request an expert, mutually agreed upon, from a third
                      party, to make a decision which, when made, shall be
                      binding on all parties.

                      Pending the decision Anhui Power shall make payments under
                      Article 8.5.2 as if the cause of the occurrence were Power
                      Plant Force Majeure. If it is subsequently determined that
                      the cause was Anhui Power's Responsibility, Anhui Power
                      shall forthwith pay the difference between the payments it
                      would have made but for this paragraph and the payments
                      actually made by Anhui Power pursuant to this paragraph,
                      to the Joint Venture.

            8.2       Responsibility of Anhui Power

                      If the cause for failure to generate is not Power Plant
                      Force Majeure event or the Responsibility of the Joint
                      Venture, then Anhui Power is liable for the cause.

            8.3       Responsibility of the Joint Venture

                      Responsibility of the Joint Venture means that the Joint
                      Venture failed to perform its obligations under this
                      Contract.

            8.4       Power Plant Force Majeure (as defined in Article 12.1).

            8.5       Adjustment of MPQ

                                       14
 
            8.5.1     Planned Outages: Each Unit of the Power Plant may be
                      shutdown for a period or periods not exceeding, in
                      aggregate:-

                       (a)   Forty-five days for each Unit in each third Year in
                             which a major overhaul will take place; and

                       (b)   twenty-two days for each Unit in each Year,

                      for the purposes of repair and maintenance, provided that,
                      subject to Article 8.5.2, any such shutdown or other
                      failure to dispatch shall not affect Anhui Power's
                      obligation to pay the Electricity Fee in accordance with
                      Article 7.

             8.5.2    Unplanned Outages: If in any Year any Unit is shutdown
                      or fails to generate for a period in excess of that
                      specified in Article 8.5.1 and it is determined in
                      accordance with Article 8 that the cause of such
                      shutdown or failure is the Responsibility of the Joint
                      Venture or is caused by Power Plant Force Majeure, the
                      proportionate part of the MPQ attributable to the
                      period of shutdown or other non-generation shall be
                      reduced by a proportion which is equal to the
                      proportion which the US$ Equity Return Portion plus the
                      RMB Equity Return Portion bears to the aggregate
                      Electricity Fee in the relevant period. In no event
                      shall any reduction in the Electricity Fee be such as
                      to result in the Electricity Fee less the Approved
                      Operating Costs for the relevant period being
                      insufficient to enable the Joint Venture to pay its
                      entire US$ Senior Debt Costs and any other financing
                      costs for the relevant period.

            8.5.3     Prior to the Joint Venture unconditionally satisfying its
                      obligations under the US$ Senior Loan Contract, the
                      payments to be made by Anhui Power under this Contract for
                      MPQ of the two Units shall be on the basis of an 11,000
                      integrated working hours of such Units. After the Joint
                      Venture has unconditionally satisfied its obligations
                      under the US$ Senior Loan Contract, the parties shall
                      agree upon the working hours, taking into account the
                      conditions of the Power Grid and the Tariff, so as to
                      achieve the anticipated rate of return.


            Article 9.          PREPARATION TO INTERCONNECT TO GRID

            9.1       Interconnection to the Power Grid:

            9.1.1     Anhui Power shall guarantee that the Power Plant is
                      interconnected to 220KV transmission network of the Power
                      Grid by the Tariff Commencement Date of Unit I.

            9.1.2     The Power Grid shall be capable of providing the Power
                      Plant with sufficient quantities of electricity power as
                      required for the performance of the commissioning tests
                      and start up without delay or restriction, for the
                      performance of the synchronizing of each Unit without
                      delay or restriction and for the Power Plant to transmit
                      all electricity produced during Unit Commissioning and to
                      transmit continuously the maximum output of electricity
                      generated by each Unit.

            9.2       Liability of Anhui Power

                      If the Power Plant is not interconnected with the Power
                      Grid by the Tariff Commencement Date of Unit I, or is not
                      available for use in accordance with the requirements as
                      described in Article 9 hereof, then the failure of the
                      Power Plant to generate electricity shall be deemed to be
                      Anhui Power's responsibility.

                      Anhui Power must purchase all electricity delivered from
                      the Delivery Point and pay according to Article 7.

                                       15

            9.3       Liability of the Joint Venture

                      The Joint Venture shall be at fault if it fails to make
                      any required payment under and in accordance with the EPC
                      Contract and this results in the Power Plant not being
                      interconnected with the Power Grid.


            Article 10.         INDEMNITY

                      If a party to this Contract is in breach of its
                      obligations under it, the breaching party shall bear
                      responsibility for and shall indemnify and hold the
                      non-breaching party harmless from and against any loss or
                      damage, cost, liability or claim against the non-breaching
                      party, and all expenses relating thereto, including, but
                      not limited to, legal fees and expenses, which may be
                      suffered by the non-breaching party, due to the other
                      party's breach of its obligations under any relevant
                      contract including but not limited to this Contract and
                      the Interconnection Contract.


            ARTICLE 11.         INSURANCE

            11.1      Insurance from Joint Venture

                      The Joint Venture shall maintain and obtain such insurance
                      in respect of the construction and operation of the Power
                      Plant (including, but not limited to, those specified in
                      Appendix 5) in the name of the Joint Venture as required
                      by the FX Financing Contracts. The insurance expense shall
                      be counted as part of the cost of electricity generation.

            11.2      Insurance from Anhui Power

                      Anhui Power shall obtain and maintain insurance, in its
                      own name, and shall be responsible for any liability
                      relating to workers and staff and as required by the
                      relevant laws of China. The insurance expense shall be
                      passed through to the Tariff as part of the cost of
                      electricity generation.

            11.3      Policies and Claims

                      Anhui Power shall comply with all requirements of such
                      insurance and shall provide the Joint Venture with all
                      information and assistance within its capacity to aid the
                      Joint Venture in making any claims under insurance carried
                      and maintained under Article 11.1 and in processing claims
                      under its insurance. Anhui Power shall promptly notify the
                      Joint Venture of the occurrence of any accident or other
                      event covered by or affecting the insurance.


            ARTICLE 12.         OCCURRENCE OF POWER PLANT FORCE MAJEURE

            12.1    Power Plant Force Majeure means any of the following events:

            (a)     war, hostility or insurrection;

            (b)     plague or other epidemics;

            (c)     fire;

            (d)     lightning;

            (e)     earthquake; or

                                       16

            (f)     damages to property as a result of the operation of the
                    forces of nature, including natural calamities, and which
                    an experienced power plant operator or electricity
                    supplier, as the case may be, could not foresee;

            which, in each case;

            (i)       occurs within the boundaries of the Power Plant; and

            (ii)      prevents the Power Plant from generating electricity; and

            (iii)     cannot be prevented by any effort according to the good 
                      operating  practices for thermal power plants.

            12.2      Notification

                      If an event of Power Plant Force Majeure occurs at any
                      time, Anhui Power shall, as soon as possible, notify the
                      Joint Venture of such event. Together with such
                      notification, Anhui Power shall present its proposals to
                      mitigate the effects of such event of Power Plant Force
                      Majeure.

            12.3      Consultation

                      Anhui Power and the Joint Venture shall as soon as
                      possible consult with each other with the object of
                      maintaining economic production of electricity by the
                      Power Plant and minimizing any occurrence of expenses and
                      disruption.

            12.4      Mitigation

                      Anhui Power shall use its best efforts to overcome the
                      effects of the event of Power Plant Force Majeure.


            ARTICLE 13.         SPECIFICATION OF COAL

            13.1      Coal Must Comply with Specifications

                      Anhui Power shall ensure that each of the deliveries of
                      coal supplied to the Power Plant shall comply with all of
                      the specifications set forth in Appendix IV.

            13.2      Coal Analysis on Delivery

                      When each load of coal is delivered at the Power Plant,
                      the coal shall, at the cost of Anhui Power (which shall
                      form part of the operating expenses), be weighed and
                      analyzed based on the condition when payment is made in
                      accordance with the procedures set forth in Measurement
                      Standards Bureau of P.R.C. standards: (1) ((GB475-83))
                      Sampling Process for Commercial Coal: (2) ((GB474-83))
                      Coal Sample Making Process: and (3) ((GB212-91)) The
                      industrial Analysis Process of Coal (or such other
                      equivalent internationally accepted standards as the
                      Parties may agree).


            ARTICLE 14.         NOTICES

            14.1      Address for Notices

                      Under this Contract, each invoice, notice or other
                      document to be sent by each party by courier, mail or
                      facsimile or delivered to other parties shall be in
                      writing and sent or delivered to the other party at the
                      following addresses:

                      (a)      Anhui Power:

                                       17

                      
                               No. 415 Wuhu Road      
                               Hefei, Anhui, P.R.C. 230061
                               Facsimile: 0551-3633393           
                                Receiver: Cheng Guangjie

                      (b)      The Joint Venture:

                               Commercial Office Building      
                               West Huangshan Road
                               Wuhu, Anhui, P.R.C. 241000
                               Facsimile: 0553-3823224
                                Receiver: Wang Wudao

                      or other address as one party may have notified to the
                      other party in writing from time to time.

            14.2      Delivery of Notices

                      Any such invoice, notice or other document:

                      (a)    may be delivered in person to the relevant address
                             on any day during the hours of 9.00 a.m. to 12.00
                             noon and 2.00 p.m. to 5.00 p.m. in an envelope.
                             The envelope shall indicate on the front of it the
                             subject matter of its contents and the envelope
                             shall be marked for the attention of such officer
                             or employee (if any) as the relevant party shall
                             have notified to the other party for the purpose.

                      (b)    if so presented for delivery, may be handed to any
                             person then present at such address who will
                             provide written notice of the receipt of the same;
                             and

                      (c)    if the person effecting delivery is unable to
                             obtain such written acknowledgment within one hour
                             of his arrival at such address, may be left there.

            14.3      Deemed Delivery

                      Any invoice, notice or other document delivered by hand
                      shall be deemed to have been delivered and received if
                      delivery is effected in accordance with Article 14.2. Any
                      document sent by facsimile shall be deemed to be delivered
                      on the working day after it is sent. Any document sent by
                      mail shall be deemed to have been delivered three working
                      days after it is mailed.


            ARTICLE 15.         MISCELLANEOUS

            15.1      Separate and Independent Contract

                      This Contract shall be construed as a separate and
                      independent contract. If there is any conflict between
                      this Contract and any other agreement between any of the
                      parties relating to the same subject matter, the
                      provisions of this Contract shall prevail.

            15.2      Language of Contract

                      This Contract shall be executed in Chinese and English.
                      Both the English and Chinese versions of this Contract are
                      of equal validity.

            15.3      Amendments

                      Any amendments to this Contract and/or the Appendices must
                      be in writing and signed by the duly authorized
                      representatives of the Joint Venture and Anhui Power and
                      approved by the relevant authorities.

                                       18

            ARTICLE 16.         TERMINATION IN ADVANCE

            16.1      Termination Events

                      Upon the occurrence of a Termination Event, Anhui Power
                      shall be obliged to immediately pay to the Joint Venture
                      the Termination Payment, whereupon the Joint Venture shall
                      transfer all right, title and interest in the Power Plant
                      to Anhui Power or to such other person as Anhui Power
                      shall nominate and, without prejudice to any existing
                      accrued rights of the parties, this Contract shall
                      automatically terminate.

                      If the Parties do not, for whatever reason, within 60 days
                      after the occurrence of a Termination Event, agree the
                      amount of the Termination Payment or any component
                      thereof, Anhui Power shall immediately pay to the Joint
                      Venture on account of Termination Payment an amount equal
                      to the amount certified by the Facility Agent (as defined
                      in the US$ Senior Loan Contract) to represent its estimate
                      of the amount which would be payable under item (ii) in
                      the definition of Termination Payment. Such amount on
                      account of Termination Payment paid by Anhui Power shall
                      be applied first in or towards satisfaction in full of all
                      amounts due under or in connection with the US$ Senior
                      Loan Contract and shall be paid without prejudice to the
                      rights and obligations hereunder of either the Joint
                      Venture or Anhui Power to subsequently require or make any
                      necessary adjusting payments between them once the amount
                      of the Termination Payment is agreed between them.

            16.2      Termination by Agreement

                      Subject as provided in Article 16.1 neither party may
                      terminate this Contract without the consent of the other
                      or (in the case or an assignment by any party, whether by
                      way of security or otherwise) the assignee of the other
                      party. In any event this Contract shall not be capable of
                      termination without the consent of the Creditors so long
                      as the Joint Venture has any obligations, actual or
                      contingent, pursuant to the FX Financing Contracts.


            ARTICLE 17.         Law and Dispute Resolution

            17.1      Governing Law

                      This Contract shall be governed and construed in
                      accordance with the laws of China. If any disputes arise,
                      they shall be settled according to the laws of China.

            17.2      Settlement of Disputes

                      Any disputes arising from the execution of or in
                      connection with this Contract shall be settled through
                      friendly consultations between the parties. In the event
                      no settlement can be amicably reached through consultation
                      within 60 days, the disputes shall be submitted to the
                      China International Economic and Trade Arbitration
                      Commission in Beijing for arbitration. The arbitration
                      award shall be final and binding on all parties.


            ARTICLE 18.         EFFECT AND TERM OF CONTRACT

            18.1      Effect of Contract

            18.1.1    This Contract will come into effect on the date of 
                      execution by both parties.

            18.1.2    Copies of this Contract shall be submitted for record
                      purposes to the appropriate authorities by Anhui Power.

                                       19

            18.2      Term

                      This Contract shall remain in force until the expiration
                      of the Joint Venture term or shall be extended for the
                      same period as the period affected by Power Plant Force
                      Majeure.


            Article 19.   Assignment

            19.1      Anhui Power hereby acknowledges and consents to the
                      assignment by the Joint Venture of any or all of its
                      rights and benefits under this Contract in favour of any
                      Creditor(s).

            19.2      The terms "Anhui Power", "Joint Venture" and "Party" shall
                      include their respective successors and permitted assigns.

            IN WITNESS WHEREOF, this Contract has been duly executed by the
parties as of the date first above written.



            Signatories to this Contract

            Wuhu Shaoda Electric Power Development Company Limited

            Representative: [Signature Illegible]

            Date:_______________1996

                Witness: [Signature Illegible]


            Anhui Provincial Electric Power Corporation

            Representative: [Signature Illegible

            Date:________________1996

                Witness: [Signature Illegible]




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



            Appendix I     Invoice Format

            Invoice for Electricity Fee Payment from Month:               Date:
            to Month:                                                     Date:
                                                       Date of Meter Recording:
                                                        Date of Table fill-out:

            This month is the ____ month of this quarter,

            The meter reading of the preceding month was ________,

            The meter reading of this month is ________.

            The portion of Electricity Fee for this month is ________, being the
            price determined pursuant to Article 7 of the Operation and Offtake
            Contract.

            The on-grid electricity of the first month of this quarter is _____

            The on-grid electricity of the second month of this quarter is ____

            The on-grid electricity of the third month of this quarter is _____

            Sum of money due ____________

            Balance due ___________

            Amount payable (sum of money due + balance due) ____________

                      Balance due = unpaid account of the amount payable for the
                               preceding  month + delinquency charge as referred
                               to in Article 7.6.4

                      Payments Due:

                      (a)      Payment due in respect of the 1st, 2nd, 4th, 5th,
                               7th, 8th, 10th and 11th months of each Year:


                                                [***]


                      (b)      Payment due in respect of the 3rd and 9th month 
                               of each Year:


                                                [***]
                                        

                      (c)      Payment due in respect of the 6th month of each 
                               Year:


                                                [***]


                      (d)      Payment due in respect of the 12th month of each 
                               Year:


                                                [***]
            where

                                       21

            
            AMPQ      is the aggregate of the MPQ of both Units (it will be the
                      MPQ of Unit I before the Tariff Commencement of Unit II);

            T is the Tariff;

            AOCP is the AOC Percentage (as determined under Article 7.4);

            A is the excess of actual generation (expressed in KWH) from the
            beginning of the 1st month to the end of the 6th month over one half
            of the AMPQ; (A may never be less than zero); and

            C is the excess of actual generation (expressed in KWH) in the Year
            over the AMPQ (C may never be less than zero).

                                       22

            Table 2             Operation Cost of the Power Plant

1,      Fuel
2,      Power Offtake
3,      Water
4,      Salary
5,      Welfare
6,      Maintenance
7,      Other Costs
        Office Work
        Water
        Travel
        Heating
        Low-value Consumable Amortization
        Labor Protection
        Repairs
        Transportation
        Insurance
        Leasing
        Sewage
        The Worker Union Fee
        Staff Education
        Testing and Experiment
        External Service
        Technical Transfer
        Unemployment Insurance
        Reception
        Waste Ash Disposal
        Land Use
        Audit
        Consultant
        Afforestation
        Stock Products Loss, Damage and
          Abandonment
        Salary Review
        Guard and Fire Fighting

                                       23

        Corporate Membership
        Water Conservancy Fund
        Price Adjustment Fund
        Entrusted O & M Fee
        Others
8,      Bank Charges
9,      Working Capital Adjustment
10,     Technical Renovation

                                       24



            Appendix II         Metering and Recording of Power Output

            1         The KWH meter to record both active and reactive power
                      quantity supplied by the Power Plant to Power Grid shall
                      be located at the Breaker No. 1 and the Breaker No. 2 at
                      the high voltage side of the step-up transformer of the
                      Power Plant; the KWH meter to record power supply from
                      Anhui Power Grid to the Power Station shall be located at
                      the Breaker No. 3 at the high voltage side of the start-up
                      transformer of the Power Plant.

            2         Under normal operation, power from the Power Plant to
                      Power Grid shall be transmitted through the 220KV step-up
                      substation of the Power Plant and the 220KV transmission
                      line.

            3         The accuracy of metering equipment shall comply with  
                      accuracy standards for Class 1 metering equipment, namely:

                               Active Power Meter:                    Grade 0.5

                               Reactive Power Meter:                  Grade 2.0

                               PT:                                    Grade 0.2

                               CT:                                    Grade 0.2

                      The metering equipment shall be managed in accordance with
                      Regulations for Management of Electric Power Meters,
                      promulgated by the Ministry of Electric Power.

            4         Under normal operation, auxiliary power of the Power Plant
                      shall be provided by the high-voltage station service
                      transformer; in case of outage of the station service
                      transformer, it shall be provided by the start-up
                      transformer.

            5         Power transmitted from the Power Plant to Power Grid shall
                      be calculated through the following formula:

                               Qg1 + Qg2

                      Among these, Qg1 is the active power volume supplied by
                      the Power Plant to Anhui Electric Power Grid measured by
                      KWH meter at the Breaker No. 1; Qg2 is the reactive power
                      volume supplied by the Power Plant to Anhui Electric Power
                      Grid measured by KWH meter at the Breaker No. 2.

            6         Power transmitted from Anhui Power Grid to the Power Plant
                      shall be calculated as the active power quantity measured
                      by KWH meter at the Breaker No. 3 at the high voltage side
                      of the start-up transformer.

            7         The Joint Venture and Anhui Power shall jointly appoint a
                      qualified institution to be responsible for recording of
                      all KWH meters. At noon of the last day of each month or a
                      time in the same day as agreed upon by the Parties, the
                      Joint Venture and Anhui Power shall send representatives
                      to the site to witness the recording. In case that any one
                      Party is absent at such an agreed time, the Party present
                      shall witness the recording alone, and the result of such
                      recording shall be binding on both Parties.

            8         The Joint Venture and Anhui Power shall jointly appoint a
                      qualified institution to calibrate all meters and their
                      auxiliary parts every year. At the time when calibration
                      takes place, the Joint Venture and Anhui Power shall send
                      representatives to the site to witness the calibration. In
                      case that any one side is absent at such an agreed time,
                      the Party present shall witness the calibration alone, and
                      the result of such calibration shall be binding on both
                      Parties.

                                       25

            9         If any Party finds, for some reason, that the above
                      metering equipment may be inaccurate, that Party shall
                      immediately notify the other Party of the situation. The
                      inaccurate metering equipment shall be tested and
                      recalibrated promptly. The power output at the time of
                      metering inaccuracy shall be calculated at a temporary
                      metering point determined by both Parties.

                                       26

       Appendix III        Pre-Operation and Operation Services

       Part I      Pre-operation Services

                   Before the actual date of construction completion of the
                   units, Anhui Power shall provide the following
                   pre-operation services:

       1           Preparation for Operation

                   Anhui Power shall

       1.1         in consultation with the Joint Venture, draw out maintenance
                   and the administrative management system for the Power Plant;

       1.2         three months prior to the full start-up and interconnection
                   of the Unit I of the Power Plant, make out and submit to the
                   Joint Venture operation and safety codes applicable to the
                   Power Plant (Preliminary Version). Within three months after
                   commencement of commercial operation of the Power Plant, the
                   above codes shall be modified and observed during operation
                   of the Power Plant. Copies of such codes shall be sent to the
                   Joint Venture for file keeping purpose;

       1.3         develop a complete set of training program for the Power
                   Plants O & M employees for them to become familiar with power
                   plants and satisfactorily fulfil their responsibility. The
                   training program shall include seminars, site visits, and
                   training given by EPC contractors and equipment
                   manufacturers. The training program shall be based on
                   technical data and manuals provided by EPC contractors,
                   including information about start-up, operation, basic
                   maintenance, fire fighting and safety, etc.;

       1.4         in consultation with the Joint Venture, draw out criteria for
                   recruitment of employees of the Power Plant, and recruit
                   qualified and experienced employees according to such
                   criteria;

       1.5         assist the Joint Venture in monitoring, operation and tests
                   of the Power Plant;

       1.6         send to the Joint Venture and relevant operation management
                   departments technical data and final drawings provided by EPC
                   contractors, the original copy of which shall be kept in the
                   safest place within the Power Plant;

       1.7         in consultation with the Joint Venture, draw out the list of
                   all consumable, spare parts, tools and materials needed by
                   the Power Plant, and purchase on behalf of the Power Plant
                   the above things needed by the Power Plant during the first
                   year of commercial operation;

       1.8         in consultation with the Joint Venture, draw out a detailed
                   maintenance plan and methods for the first year of commercial
                   operation of the Power Plant; in consideration of the rights
                   and obligations of the Joint Venture, draw out an outline
                   plan for the scheduled overhaul for the first four years of
                   commercial operation.

       2           Start-up, interconnection, commissioning and tests

                   Anhui Power shall

       2.1         provide spare parts, consumable, fuel oil, water, coal and
                   lubricants necessary for timely, safe and stable start-up of
                   the Units;

       2.2         be responsible for implementing, and guaranteeing the Units
                   to be in compliance with the interconnection conditions
                   stipulated in Article 2 of the Interconnection Contract;

                                       27

       2.3         provide qualified and experienced engineers in sufficient
                   quantities to perform start-up, commissioning,
                   interconnection and 72- hour and 24 hour performance tests of
                   the Units;

       2.4         provide all necessary power for commissioning of the Power
                   Plant (including power needed for start-up);

       2.5         record in detail and keep all the data of the start-up and
                   performance tests of the Power Plant;

       2.6         provide other necessary services.

       Part II     Services and Operation

       1           Recruitment and training

                   Anhui Power shall

       1.1         guarantee to meet the manning requirement of the Power Plant;
                   in case of any vacancy, recruit qualified and experienced
                   staff;

       1.2         provide relevant class and site training for new employees,
                   to train them to be qualified employees for their duties;

       1.3         ensure the continuity of training programs, the staff
                   training shall include safety measures, O & M procedures, and
                   establish relevant examination and promotion system;

       1.4         provide other necessary services related to recruitment and
                   training.

       2           Operation of Power Plant

       2.1         Anhui Power shall maintain, operate, commission and inspect
                   the Power Plant:

                    1)   to enable the Power Plant to be in good condition 
                         during the term of the Joint Venture;

                    2)   to maintain high availability and efficiency of
                         generation facilities of the Power Plant;

                    3)   to minimize the occurrence of accidents and damages, 
                         and in case of accidents and damages, to minimize 
                         their duration.

       2.2         provide to the Joint Venture, on a timely basis and at
                   regular intervals, reports on operation, repairs, tests,
                   maintenance and examination of the Units;

       2.3         carry out the performance test stipulated by the Ministry of
                   Electric Power for similar coal-fired power plants;

       2.4         guarantee that the Power Plant shall abide by all applicable
                   laws, regulations, safety rules and other stipulations.

       2.5         perform relevant obligations and responsibilities of the
                   Joint Venture related to operation of the Power Plant as
                   stipulated in the "Interconnection Contract" and "Dispatch
                   Contract"; if any reduction of power generation occurs due to
                   the responsibility of Anhui Power, Anhui Power shall
                   indemnify the Joint Venture from losses incurred by such
                   reductions. As an operator of the Power Plant, Anhui Power
                   shall indemnify the Joint Venture for any penalties under the
                   relevant provisions of this Contract;

                                       28

       2.6         be responsible for daily maintenance, overhauls and repairs,
                   and planned or emergency maintenance;

       2.7         make annual generation and maintenance plan in accordance
                   with the "Operation and Offtake Contract" and implement the
                   same;

       2.8         dispose of all the unnecessary materials and wastes of the
                   Power Plant.

       3           Management

                   Anhui Power shall

       3.1         keep the Power Plant in good operation condition and
                   appropriate level of spare parts reservation according to
                   good operational practices of similar coal-fired power
                   plants;

       3.2         be responsible for management of maintenance of the Power
                   Plant;

       3.3         in the event of any emergency or unusual event affecting the
                   normal operation of the Power Plant, take all necessary
                   actions to minimize injury to persons and damage to the Power
                   Plant and, immediately report to the Joint Venture the nature
                   of such emergency or unusual event.

       4           Procurement

                   Anhui Power shall

       4.1         check regularly needs of spare parts, consumable and
                   materials of the Power Plant (considering the designed life
                   of equipment, actual maintenance records and any technical
                   specification changes), and, draw out corresponding plans and
                   do the purchase according to these plans;

       4.2         be responsible for organizing the coal supply, and ensure
                   enough fuel for continuous, steady and safe operation of the
                   Power Plant, at least to meet the needs of production of the
                   Minimum Generation Quantity.

       5           Statements and reports

                   Anhui Power shall, before delivery of the first Unit,
                   provide suggestions on forms of the following daily,
                   monthly and annual reports, and determine the forms in
                   consultation with the Joint Venture.

       5.1         Daily reports

                   Anhui Power shall provide the Joint Venture with daily 
                   reports on daily operation of the Power Plant, including 
                   without limitation the following items:

                      1)       net generation volume of each Unit;

                      2)       coal consumption of each Unit;

                      3)       causes for deviation of each Unit from the daily
                               load curve;

                      4)       description of emergencies or unusual events 
                               resulting in deduction of power generation and 
                               injuries.

       5.2         Monthly reports

                   Anhui Power shall, within the first 10 days of each month,
                   provide to the Company a monthly report on the performance
                   of the Units for the previous month. The report shall
                   include, but not be limited to the following:

                                       29

                   1)        statistical statement on operation in the form
                             required by the Ministry of Electric Power;

                   2)        major repair and maintenance activities carried out
                             during the previous month, and those planned for
                             the next month;

                   3)        expenses of the previous month and those planned
                             for the next month;

                   4)        statistical statement of safety record during the
                             previous month;

                   5)        summary of unusual events and emergencies during
                             the previous month, and measures already taken by
                             Anhui Power to mitigate the effects of same.

       5.3         Annual Report

                      Anhui Power shall, within 60 days after the end of each
                      calendar year, submit to the Joint Venture an annual
                      report of such calendar year. The annual report shall
                      include but not be limited to the following:

                      1)  annual operational data;

                      2)  annual repair and maintenance data;

                      3)  annual safety record and statistics of accidents;

                      4)  annual financial statement;

                      5)  summary of any disputes relating to the Power Plant;

                      6)  environmental monitoring;

                      7)  other data at reasonable request of the Joint Venture.

       5.4         Other reports

                      Anhui Power shall provide:

                      1)  a report on safety status of the Power Plant, with 
                          data on personal and material damages, as required by
                          relevant authority;

                      2)  other reports at reasonable request of the Joint 
                          Venture.

       6           Access to the Power Plant

       6.1         Anhui Power shall provide all necessary working and living
                   facilities to the resident representatives of the Joint
                   Venture in the Power Plant.

       6.2         Anhui Power shall allow representatives or consultants from
                   the Joint Venture to inspect and monitor the operation of the
                   Power Plant at any time.

       6.3         Anhui Power shall, upon request of the Joint Venture, allow
                   the Joint Venture or its representatives to have access at
                   any time to any information, data and records held by Anhui
                   Power.

       7           Other responsibility

                   Anhui Power shall be responsible for responding to other
                   requests from relevant authorities concerning the Power
                   Plant.

                                       30

       Appendix IV         Coal Specifications and Permissible Deviation Range


           Item                          Spec.                   Deviation
           ----                          -----                   ---------

           carbon (%)                    52                      +/-3

           hydrogen (%)                  3.2                     +/-0.3

           nitrogen (%)                  1.24                    +/-0.1

           sulphur (%)                   0.45                    +/-0.03

           oxygen (%)                    3.4                     +/-0.5

           ash (%)                       28                      +/-4

           water content (%)             8.45                    +/-0.05

           fixed water (%)               1.52                    +/-0.20

           vaporized substances (%)      16                      +/-1

           low heat value (Kcal kg)      5000                    +/-300

           ash melting point             t1,t2,t3)1500C          t1,t2,t3)1500C

           grindability (%)              80                      +/-1

 Ash Components:

           SiO2                          47.21                   +/-1

           TiO2                          1.67                    +/-1.7

           Al2O3                         35.37                   +/-1

           Fe2O3                         4.71                    +/-0.2

           MgO                           1.26                    +/-0.01

           CaO                           2.42                    +/-0.1

           Na2                           O1.57                   +/-0.12

           K2O                           1.57                    +/-0.03

 Dust, Electric Resistance Ratio

           27C                           5.28x109                ohm/cm

           100C                          2.44x1012               ohm/cm

           120C                          3.03x1012               ohm/cm

           150C                          3.60 x1012              ohm/cm

           180C                          2.19x1012               ohm/cm

 NO IMPURITIES: no impurities shall be contained in the coal delivered,
    including without limitation bones, stones, pieces of iron and wood. No oil
    or other substances shall be added to the coal in order to change its heat
    value without prior consent from the Buyer.

                                       31

       Appendix V         Necessary Insurance

            1         Third Party Liability

            2         Life injury and Medical Care

            3         Enterprise Property (Substitute Value)

            4         Vehicles (Vehicles and the Third Party Liability)

            5         Owner Liability

            6         Profit Loss

            7         Marine Cargo

            8         Construction and Installation

            9         Water Transport and Land Transport Cargo

            10        Boiler and Machinery (including construction and operation
                      periods)

                                       32

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


 Appendix VI     Common Auxiliary Facilities Utilization and Management









                                       [***]






                                   Appendix A


                    List and Description of Common Facilities

 1      Coal Pier

 2      Coal Transportation Passage

 3      Civil Construction of Circulating Pump House and Water Leading Pipe

 4      Ash Removal Tunnel and Pipe

 5      Civil Construction of the Grid Control Room

 6      Water Treatment Chamber

 7      Coal Transportation Central Room

 8      Coal Pool, Dry Coal Bunker and Impeller

 9      Land of Main Production Building

 10     Auxiliary Production Facilities

 11     Welfare (including Dormitories, Guest House and Dinning Hall)

 12     Other Public Facilities (including Bathing Rooms, Nursery, Kindergarten,
        Administration Building, Recreation Center and Entry Access)