Yangcheng International Power Generating Co. Ltd. Joint Venture Contract - North China Electric Power Group Corp., Jiangsu Province Investment Corp., Shanxi Energy Enterprise (Group) Co., Shanxi Provincial Power Co., Jiangsu Provincial Power Co., and AES China Generating Co. Ltd.


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

                                                                    Exhibit 10.5

                                              Draft 08/21/1997


                         JOINT VENTURE CONTRACT

                               TO ESTABLISH


                YANGCHENG INTERNATIONAL POWER GENERATING
                            COMPANY LIMITED






                     August 1996 in Beijing, China





                                      -1-



                                    Chapter 1
                               General Principles

         North China Electric Power Group Corporation, Jiangsu Province
Investment Corporation. Shanxi Energy Enterprise (Group) Company. Shanxi
Provincial Power Company, Jiangsu Provincial Power Company, and AES China
Generating Co. Ltd. in accordance with the Law of the People's Republic of China
On Cooperative Joint Ventures Using Chinese and Foreign Investment and other
relevant Chinese laws and regulations, and the principle of equality and mutual
benefits, through friendly discussions, hereby agree to jointly invest in and
establish a Sino-foreign cooperative joint venture company which shall be named
Yangcheng International Power Generating Company Limited (hereinafter
'Company'), in Shanxi Province, the PRC.

         Whereas, the Company shall develop a 6x350 MW power plant, based on
coal deliveries from Shanxi Province, with the electricity produced to be
transmitted to Jiangsu Province.

         Now therefore, it is hereby agreed among the Parties hereto as follows:

                                    Chapter 2
                                   Definitions

         Article 1. The following definitions of certain terms hereafter used in
this Contract shall apply for the purposes of this Contract:

Power Plant - means the 6X350MW coal-fired power plant invested and constructed
by the Parties in Yangcheng County, Shanxi Province.

Project - means the 6x350 MW coal-fired Power Station invested and constructed
by the Parties in Yangcheng County, Shanxi Province and the land on which the
Company enjoys all rights of use and auxiliary facilities directly related to
the Power Plant.

Articles of Association - means the articles of association of Yangcheng
International Power Generating Company Limited as concluded and amended by the
Company's Board of Directors.

Business License - means the enterprise legal person business license issued by
the State Administration for Industry and Commerce of the PRC or its authorized
organizations to the Yangcheng International Power Generating Company Limited.

Clearances - means all clearances, permits, consents, approvals, authorizations
and licenses required for the construction and operation of the Project as
contemplated by the Contract.

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

MOFTEC - means the Ministry of Foreign Trade and Economic Cooperation.


                                   -2-




Subsidiary - means wholly-owned subsidiary of the Party to the Company.

Coal Supply Contract - means the long-term contracts to be entered into by the
Company and the coal suppliers in Shanxi Province for the coal supply to the
Power Plant.

Power Purchase Contract - means the Contract to be entered into by the Company
and Jiangsu Provincial Power Company for the sale and purchase of electricity.

EPC - means the Contract to be entered into by the Company and Shanxi Provincial
Power Company for the engineering, procurement and construction of the Project.

Operator - means Shanxi Provincial Power Company, the operating and managing
company determined by the Board of Directors, which shall be responsible for the
management, operation and maintenance of the Power Plant.

Operation Contract - means the Contract to be entered into by the Company and
Shanxi Provincial Power Company for the management, operation and maintenance of
the Power Plant.

Lenders - means domestical and overseas financial institutions that will or may
provide financing to the Company, or the financial institutions that will
on-lend the foreign export credit.

Financial Closing - means the binding commitment from Lenders, as evidenced by
one or more executed definitive credit agreements in an amount sufficient to
complete the development, construction, commissioning and trial operating of the
Project.

Reasonable Profit - means the distributable profit estimated based on the
approved expected financial internal rate of return in the Feasibility Study
Report of the Project.

Right of Ways and Land Lease Contracts - means the contracts for obtaining right
of use of the ways and the land required by the Company during the period of
construction and operation for the Project.

Project Documents - means the Power Purchase Contract, Coal Supply Contract,
Operation Contract, EPC, the credit agreements. Interconnection & Dispatch
including Right of Ways and Land Lease Contract related to the Project.

RMB - means the Renminbi, the official currency of the PRC.

U.S. Dollars - means the official currency of the United States of America.

the Land - means the land in Yangcheng County. Shanxi Province used for
construction of the Project as specified in the Site Description Map attached to
the Feasibility Study Report and Site Lease Agreement.


                                   -3-




                                    Chapter 3
                          Parties to the Joint Venture

         Article 2. The Parties to this Contract (hereinafter referred to
jointly as the 'Parties', and individually as the 'Party') are:

         North China Electric Power Group Corporation (hereinafter 'Party A'),
incorporated with Beijing Administration of Industry and Commerce, with its
legal address at 32 Zaolinqian Street, XuanWu District, Beijing, the PRC, and
with its general manager, Mr. Jiao Yian, a citizen of the PRC, as its legal
representative;

         Jiangsu Province Investment Corporation (hereinafter 'Party B'),
incorporated with Jiangsu Administration of Industry and Commerce, with its
legal address at No.5 Shanghai Road, Nanjing City, Jiangsu Province, the PRC,
and with its Chairman, Mr. Chao Renxiang, a citizen of the PRC, as its legal
representative;

         Shanxi Energy Enterprise (Group) Company (hereinafter 'Party C'),
incorporated with the Shanxi Administration of Industry and Commerce, with its
legal address at Building 10, Guoshi Street, Taiyuan City, Shanxi Province, the
PRC, with its Chairman, Mr. Wu Junzhou, a citizen of the PRC, as its legal
representative;

         Jiangsu Provincial Power Company (hereinafter 'Party E'), incorporated
with Jiangsu Administration of Industry and Commerce, with its legal address at
20 Beijing West Road, Nanjing City, Jiangsu Province, the PRC, and with its
general manager, Mr. Gu Zhipeng, a citizen of the PRC, as its legal
representative;

         AES China Generating Co. Ltd. (hereinafter 'Party F'), incorporated in
Bermuda,  with its legal address at 9/F.,  Allied Capital Resources Bldg., 32-38
Ice House Street Central, Hong Kong and with its President, Paul Hanrahan, a
citizen of the U.S., as its legal representative.

                                    Chapter 4
                          Establishment of the Company

         Article 3. In accordance with the Law of the People's Republic of China
On Cooperative Joint Ventures Using Chinese and Foreign Investment and other
relevant Chinese laws and regulations, the Parties agree to establish a
Sino-foreign cooperative joint venture company within the territory of China,
which shall be named Yangcheng International Power Generating Company Limited.

         Article 4. The name of the Company shall be [Chinese Characters] in
Chinese and 'YANGCHENG INTERNATIONAL POWER GENERATING COMPANY LIMITED' in
English. The legal address of the Company shall be No. 151 Shooing Ta Si Street,
Tai Yuan City in Shanxi Province, the PRC.


                                   -4-



         The Company shall be a Chinese legal person and thus be governed and
protected by Chinese laws. All activities of the Company shall comply with
Chinese laws, regulations and other provisions of the PRC.

         Article 5. The Company shall be a limited liability company and shall
be liable for its debts with the total assets of the Company. Each Party shall
share risks, losses and liabilities of the Company in proportion to their
respective contribution to the registered capital of the Company and within its
subscribed capital.

         The Parties shall share the rights sand interests under this Contract
according to their contribution to the registered capital and cooperation
condition and in accordance with the provisions of this Contract.

                                    Chapter 5
                           Business Purpose and Scope

         Article 6. The purposes of the Company are:

         (a)      to increase utilization of the coal resources in Shanxi
                  Province, to improve Jiangsu's supply of electricity, to
                  purchase and utilize advanced power generation technology, to
                  finance, construct, operate, maintain and manage the Power
                  Plant for the generation and sales of electricity, to
                  implement scientific and highly efficient management
                  techniques in the operation of the Power Plant, and to promote
                  economic development in Shanxi and Jiangsu provinces; and

         (b)      to  achieve efficient power production of the Power Plant and
achieve Reasonable Profits for each Party.

         Article 7. The business scope of the Company is:

                    generation and sales of electricity; construction and
                    management of the Power Plant; and development of
                    comprehensive utilization related to the production of
                    electricity.

                                    Chapter 6
                     Total Investment and Registered Capital

         Article 8. The amount of total investment of the Company is 13.2
billion RMB which is equivalent to 1571.53 million U.S. Dollars.

The registered capital of the Company shall be 392.86 million U.S.
Dollars, accounting for 25% of the total investment set forth above. Party A
shall own 25% of the registered capital of the Company, Party B - 20%, Party C
16%, Party D - 10%, Party E - 4% and Party F - 25%. The capital contribution of
each Party are as follows: Party A 98.22 million U.S. Dollars, Party B 78.57
million U.S. Dollars, Party C 62.86 million U.S. Dollars, Party F 98.22 million
U.S. Dollars.


                                   -5-




          
          Article 9. The Company, with agreement from all Parties, shall only be
responsible for fees, costs and expenses directly related to the Project.

          Article 10. Party A, Party B, Party C, Party D and Party E shall make
their capital contribution in RMB cash which shall be denominated in U.S.
Dollars; Party F shall make its capital contribution in U.S. Dollars. Conversion
of RMB to U.S. Dollars shall be calculated based upon the intermediary price of
the buying and selling exchange rate as published by the People's Bank of China
on the date of each contribution.

          Article 11. According to relevant Chinese law, regulations and the
requirements of the Lenders, the Parties shall each pay 15% of its registered
capital contribution within three months of the issuance date of the Business
License. The remaining registered capital shall be paid by the Parties in
installments within three years on the basis of registered capital contribution
ratio, on the dates and in the amounts determined by the Board of Directors
after the official execution of EPC Contract and Loan Agreement.

          Article 12. The increase, reduction or assignment of the registered
capital of the Company shall be subject to the decision of the Board of
Directors and approval of MOFTEC. The procedures for the registration of such
alteration shall then be handled by the original registration authority.

          Article 13. After the Parties have paid each installment of their
respective registered capital contributions and an accounting firm registered in
China has verified the contribution and issued a verification report, the
Company shall issue an investment certificate to each Party. The investment
certificate shall bear the names of the Parties, the date of the contributions,
the type of currency, the amounts of contribution and the date of the issuance
of the certificates.

                                    Chapter 7
                       Financing and Cooperation Condition

          Article 14. The difference between the total Investment and the
registered capital shall be financed as follows:

                      a) The foreign exchange shortfall, [***] million U.S.
                      Dollars, shall be met through export credit guaranteed and
                      on-lent by the Bank authorized by the State. The Company
                      shall be responsible to borrow and be responsible to repay
                      the principal and interest on such loan while the five
                      Chinese investors shall provide counter-guarantee in
                      proportion to their contributions to the registered
                      capital, which shall be the cooperation conditions of the
                      five Chinese parties.

                      b) The RMB shortfall, [***] million RMB, shall be met in
                      the form of loan of the Company and repaid by the Company
                      at the interest rate set forth by the People's Bank of
                      China and quoted by 


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

                                   -6-




                      
                      the State Development Bank for loan of similar term. Such
                      loan shall be arranged by Party A, B, C, D, and E on
                      behalf of the Company (including their own fund) or
                      guaranteed by Party A, B, C, D and E in proportion to
                      their contributions to the registered capital, which shall
                      be the cooperation condition of the five Chinese parties.

         Article 15. As the five Chinese parties have provided guarantee or
counter guarantee for [***] million U.S. Dollars loan and [***] million RMB loan
of the Company as per this Contract, the Company shall use its all efforts to
fulfill all the obligations under the Loan Agreement, including borrowing short
term loan to repay the principal and interest of the above mentioned loans. In
the event that due to the Company's failure to repay the principal and interest
of such loans in time, and the guarantors are required by the Lenders to make
such repayment, then after the five Chinese parties or any one or several of
them have performed the obligations of guarantee, such party or parties that
have performed their obligations shall at once have the right of subrogation
against such guaranteed debts.

                                    Chapter 8
                       Favorable Treatment to the Company

         Article 16. In the event that the issuance, amendment, supplement or
rescission by the Government of China or its agencies of the laws, regulations
or policies in respect of tax, customs, foreign exchange or other issues after
the execution of this Contract or Project Documents enable the Company to enjoy
more favorable conditions than those offered by this Contract, without harming
the interest of any Party, the Company shall apply for such favorable treatments
in accordance with relevant rules.

         Article 17. After the execution date of this Contract and the Project
Documents, if a Party's economic benefits under this Contract or Project
Documents, directly or indirectly, are adversely affected because of the
issuance, amendment, supplement or rescission of the laws, regulations or
policies in respect of tax, customs, foreign exchange or other issues by the
Government of China or its subdivision, the Parties shall consult upon notice
from the affected Party requesting consultation and shall make necessary
amendments to the relevant provisions of this Contract so as to maintain each
Party's economic benefits under this Contract. However, such amended provisions
shall take effect only upon approval of the original examination and approval
authority.

                                    Chapter 9
               Assignment of Right and Interest in Registered Capital

         Article 18. During the term of this Contract, no Party may sell,
assign, pledge, or dispose of its right and interest in the registered capital
of the Company without the consent of the Board of Directors and the approval of
MOFTEC.


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

                                   -7-





         When a Party wishes to dispose of all or any part of its right and
interest in registered capital in the Company, the other Parties shall have a
preemptive right to purchase in proportion on their share of registered capital.
The Terms for such transfers by a Party to the other Parties shall be no less
favorable than those offered to any third party. Within 45 days after delivery
of the written offer by the transferring party, any interested Parties shall
deliver their response stating whether or not it accepts the offer to purchase
the transferring Party's interest in the Company. If a Party or other Parties
fail(s) to accept such offer within the aforementioned 45-day period or if a
Party or other Parties express(es) no interest, it will be deemded to have given
its consent to such transfer. In such event, the company's Board of Directors
shall vote to approve such transfer.

         In the case one Party wishes to assign its rights ad obligations in the
Company to its subsidiary, the subsidiary or the assignee shall be able to
perform the same obligations as the transferring Party under the Contract and
must undertake all the rights and obligations of the transferring Party under
the Contract. Upon satisfaction of the above conditions, the other Parties shall
prompt their appointed directors of the Board to vote for it at the meeting of
the Board of Directors of the Company. However, such assignment shall be subject
to the consent of the Lenders and shall not adversely affect the business of the
Company and the performance of this Contract.

         Any above mentioned disposal of the right and interest in the
registered capital shall be made only after their respective subscribed
Registered Capital is completely paid, the construction of the Project is
completed and all units have entered into commercial operation.

         Article 19. If there is any change to the major shareholders or
department-in-charge of the Parties, the Party for which a change has occurred
shall so inform the other Parties in writing immediately.

         Any change in the organization or structure of any Party to this
Contract shall not affect its rights and obligations as stipulated in this
Contract.




                                   Chapter 10
                         Responsibilities of the Parties

        Article 20. The Parties shall be respectively responsible for the
following matters:

         (a)      Responsibilities of Party A:

                  (i)    Providing its registered capital contribution in
                         accordance with this Contract.

                  (ii)   Obtaining from the relevant PRC government departments
                         the approvals, the registration and Business License of
                         the Company, and handling other matters relating to the
                         establishment of the Company;


                                   -8-




                  (iii)  Handling other matters entrusted to it by the Company;

                  (iv)   Assisting the Company in obtaining the financing
                         required by the Project from domestic or foreign
                         financial institution and provide guarantee or
                         counter-guarantee for the financing required by the
                         Project.

                  (v)    Assisting the Company in obtaining the rights, permits
                         and Clearances for the use of access to infrastructure
                         facilities such as land, water, power, transportation,
                         etc.;

                  (vi)   Assisting the Company in obtaining preferential
                         treatments provided under the laws of China;

                  (vii)  Assisting the Company with application for licenses for
                         importation of equipment and the reduction or exemption
                         of import customs duties;

                  (viii) Assisting the Company with application for obtaining
                         the related approvals ad permits required by the
                         electric industry; and

                  (ix)   Assisting in handling matters related to the Company.

         (b)      Responsibilities of Party B:

                  (i)    Providing its registered capital contribution in
                         accordance with this Contract;

                  (ii)   Obtaining the approvals and cooperation required by the
                         Project from Jiangsu Province;

                  (iii)  Handling other ratters entrusted to it by the Company;

                  (iv)   Assisting in obtaining the approval, registration,
                         Business License from relevant government departments,
                         and handling other matters concerning the establishment
                         of the Company;

                  (v)    Assisting the Company in obtaining the financing
                         required by the Project from domestic or foreign
                         financial institutions and providing guarantee or
                         counter-guarantee for the financing required by the
                         Project;

                  (vi)   Assisting the Company in obtaining preferential
                         treatments provided under the laws of China;

                                   -9-




                  (vii)  Assisting the Company with application for licenses for
                         importation of equipment and the reduction or exemption
                         of import customs duties;

                  (viii) Assisting the Company in handling matters concerning
                         the sale of electricity to Jiangsu Province; and

                  (ix)   Assisting in handling matters related to the Company.

         (c)      Responsibilities of Party C:

                  (i)    Providing its registered capital contribution in
                         accordance with this Contract;

                  (ii)   Obtaining the approvals and cooperation required by the
                         Project from Shanxi Province;

                  (iii)  Handling other matters entrusted to it by the Company;

                  (iv)   Assisting in obtaining the approval, registration,
                         Business License from relevant government departments,
                         and handling other matters concerning the establishment
                         of the company;

                  (v)    Assisting the Company in obtaining the financing
                         required by the Project from domestic or foreign
                         financial institutions and providing guarantee or
                         counter-guarantee for the financial required by the
                         Project;

                  (vi)   Assisting the Company with application for obtaining
                         the rights, permits and Clearances for the use of
                         access to infrastructure facilities such as land,
                         water, power, transportation, etc.;

                  (vii)  Assisting the Company in obtaining preferential
                         treatments provided under the laws of China;

                  (viii) Assisting the Company with application for licenses for
                         importation of equipment and the reduction or exemption
                         of import customs duties;

                  (ix)   Assisting the Company to buy coal at the price applied
                         by Shanxi Provincial Power Company to its power plants.

                  (x)    Assisting the Company with application for
                         preferential treatment of local taxes; and

                  (xi)   Assisting in handling matters related to the Company.

         (d)      Responsibilities of Party D:


                                   -10-




                  (i)    Providing its registered capital contribution in
                         accordance with this Contract.

                  (ii)   Obtaining approvals and cooperation required by the
                         Project from Shanxi Province;

                  (iii)  Handling other matters entrusted to it by the Company;

                  (iv)   Assisting in obtaining the approval, registration,
                         Business License from relevant government departments,
                         and handling other matters concerning the establishment
                         of the Company;

                  (v)    Assisting the Company in obtaining the financing
                         required by the Project from domestic or foreign
                         financial institutions and providing guarantee or
                         counter-guarantee for the Company on the financing
                         required by the Project;

                  (vi)   Be responsible for applying and obtaining for the
                         Company the rights or permits for the use of access to
                         infrastructure facilities such as land, water, power,
                         transportation, etc.;

                  (vii)  Assisting the Company in obtaining preferential
                         treatments provided under the laws of China;

                  (viii) Be responsible for applying for the license for
                         importation of equipment, and the reduction or
                         exemption of import customs duties for the Company;

                  (ix)   Assisting the Company to buy coal at the price applied
                         by Shanxi provincial Power Company to its power
                         plants;

                  (x)    Assisting the Company with application for preferential
                         treatment of local taxes;

                  (xi)   Assisting the Company with application for related 
                         approvals and permits required by the electric
                         industry;

                  (xii)  Executing EPC Contract with the Company and
                         implementing the obligations thereunder;

                  (xiii) Executing O&M Contract with the Joint Venture Company
                         and implementing the obligations thereunder; and

                  (xiv)  Assisting in handling matters related to the Company.

         (e)      Responsibilities of Party E:


                                   -11-





                  (i)    Providing its registered capital contribution in
                         accordance with this Contract;

                  (ii)   Obtaining approvals and cooperation required by the 
                         Project from Jiangsu Province;

                  (iii)  Handling other matters entrusted to it by the Company;

                  (iv)   Entering the Power Purchase Contract with the Company
                         and taking the obligations thereunder;

                  (v)    Assisting in obtaining the approval, registration,
                         Business License from relevant government departments,
                         and handling other matters concerning the establishment
                         of the Company;

                  (vi)   Assisting the Company in obtaining the financing
                         required by the Project from domestic or foreign
                         financial institutions and providing guarantee or
                         counter-guarantee fro the financing required by the
                         Project;

                  (vii)  Assisting the Company in obtaining preferential
                         treatments provided under the laws of China;

                  (viii) Assisting the Company with application for importation
                         of equipment and import licenses, and the reduction or
                         exemption of import customs duties;

                  (ix)   Assisting the Company with application for related
                         approvals and permits required by the electric
                         industry;

                  (x)    Assisting in handling matters related to the Company.

         (f)      Responsibilities of Party F:

                  (i)    Providing its registered capital contribution in
                         accordance with this Contract;

                  (ii)   Assisting in obtaining the approval, registration,
                         Business License from relevant government departments,
                         and handling other matters concerning the establishment
                         of the Company;

                  (iii)  Handling other matters entrusted to it by the Company;

                  (iv)   Assisting the Company in obtaining Financing required
                         by the Project through domestic or foreign financial
                         institutions;

                  (v)    Assisting the Company in obtaining preferential
                         treatment provided under Chinese law and policies;


                                   -12-





                  (vi)   Assisting the Company in obtaining advanced management
                         techniques and power generating technologies;

                  (vii)  Assisting the Company with application for importation
                         of equipment and export licenses, and the reduction or
                         exemption of export customs duties;

                  (viii) Assisting in handling matters related to the Company.

                                   Chapter 11
                               Board of Directors

         Article 21. The Company shall establish a Board of Directors which
shall be the governing body of the Company.

         Article 22. The Board of Directors shall be composed of nine persons of
which two Directors are from Party A; two from Party B; one from Party C; one
from Party D; one from Party E and two from Party F. The Chairman of the Board
of Directors shall be appointed by Party A, and three Vice Chairmen shall be
appointed respectively by Party F, B and C. The term of the Chairman, Vice
Chairman and the directors positions shall be three years and they may serve a
consecutive term if reappointed upon expiration of the term.

         Article 23. The Chairman of the Board is the legal representative of
the Company. Should the Chairman be unable to exercise his responsibility for
some reasons, a Vice Chairman shall be authorized to assume the responsibilities
of the Chairman.

         Article 24. The Board of Directors shall convene at least two meetings
each year. The meetings shall be called and presided over by the Chairman. Upon
motion by one third or more of the directors, the Chairman shall convene interim
meetings of the Board of Directors. Minutes shall be kept for each meeting of
the Board of Directors, signed by each director in attendance, and placed on
file at the Company.

         Article 25. Two-thirds of the Directors present in person or by proxy
shall constitute a quorum for any meeting of the Board of Directors. In
addition, any such meeting shall be effective only when it is attended by at
least one Director or his proxy from each Party. However, if a Director of a
Party does not attend the Board meeting in person or by proxy without any
justifiable reasons, such Director shall be deemed to have attended the meeting
and abstained from voting, and the meeting can be validly convened. Any Director
of the Board who is not able to attend any meeting of the Board shall in proxy
entrust another person to be present at such meeting on his behalf. The proxy
shall be in writing and shall state the scope of the powers entrusted by such
Director.


                                   -13-





        Article 26. When the Board of Directors vote, each director shall have
equal voting rights.

        Article 27. The following matters shall be discussed and decided by the
                    Board of Directors:

         (a)      Amendments of the Articles of Association of the Company;

         (b)      Termination, liquidation and dissolution of the Company;

         (c)      Contribution, increase, reduction of the registered capital of
                  the Company or assignment of right and interest in registered
                  capital including assignment and disposal pursuant to and in
                  accordance with Article 18 hereof;

         (d)      Merger of the Company with other economic entities;

         (e)      Adjustment of the amount of total investment of the Project;

         (f)      Execution, amendment, termination, substitution, assignment or
                  any other action by the Company of or under any Project
                  Documents;

         (g)      The Company's annual financial budget, proposal for covering
                  the deficit of the Company, power price adjustment application
                  report, and the ratio of allocations to all kinds of funds as
                  stipulated by laws as well as approval of employee salary
                  level, pensions subsidy, benefit and bonus plan, labor and
                  personnel policies, and any amendments thereto;

         (h)      Any material economic decisions in addition to the Company's
                  annual financial budget, including but not limited:

                  (1)      Entering into any contract beyond the amount limit
                           which shall be determined by the Board of Directors
                           per year or contract with a term of implementation
                           more than 1 year; if such contracts are a series of
                           related contracts, the amount of which shall be in
                           the aggregate;

                  (2)      Any foreign currency-denominated payment exceeding
                           US$100,000 per payment or US$500,000 per year;

                  (3)      Making draws under the construction loans borrowed to
                           finance the Project;

                  (4)      Making of loans, or entering into other financing
                           arrangements;

         (i)      Issuing guarantees in the name of the Company, pledge,
                  assignment or mortgage of assets of the Company;


                                   -14-





         (j)      Repayment of loans except as set forth in the original
                  amortization schedule of such loans;

         (k)      Contracts between the Company and the Parties;

         (l)      Types, amounts, term, modification or termination, of any
                  insurance to be carried by the Company, appointment or
                  dismissal of accounting firm, financial and legal advisors;

         (m)      Appointment, dismissal or rewards and penalties of the General
                  manager, deputy general manager, financial controller, or
                  other higher officials of the Company;

         (n)      Establishment of subsidiaries or branches of the company;

         (o)      Establishment and adjustment of the internal structure of the
                  Company;

         (p)      Formulation or amendment of accounting system and other
                  material management systems of the Company; and

         (q)      Other matters for decision as deemed necessary by the Board of
                  Directors.

         When the Board of Directors decides matters set forth above, unless
otherwise stipulated by it, item (a) to item (n) shall be approved unanimously
by the all the directors or their proxies present at the meeting; item (o) to
item (p) shall be approved by at least two-thirds of the directors or their
proxies present; the unlisted matters shall be decided through majority vote by
all the directors or their proxies present.

                                   Chapter 12
                      Operation and Management Organization

         Article 28. The Company shall establish an operation and management
organization that will be responsible for the day-to-day management of the
Company. The operation ad management organization shall have one general manager
and three deputy general managers. The selection and appointment of the general
manager and deputy general managers and their duties shall be set forth in the
Articles of Association.

         Article 29. The general manager shall be responsible to the Board of
Directors. The general manager shall be responsible for the day-to-day
administrative work of the Company, handling matters pertaining to construction,
operation, and business development. When handling key issues the general
managers all consult with the deputy general managers; deputy general managers
shall assist the general manager with his work. The general manager shall make
periodic reports to the Board of Directors.


                                   -15-





                                   Chapter 13
                 Profits, Distribution, Risks and Losses Sharing

         Article 30. In accordance with the stipulations of Chinese law, the
Company shall make allocations from its after-tax profits for reserve fund,
employee bonus and welfare fund as well as enterprise development fund. The
proportion of allocation for each year shall be determined by the Board of
Directors, however, it shall not exceed 12.5% of after-tax profit.

         Article 31. The Company shall distribute the profit upon the decision
of the Board of Directors as per Article 32 after the Company has paid taxes
according to the laws and regulations of China, repaid the principal and
interest in the current year as per the executed Loan Agreement and made
allocation to the funds stipulated under Article 30.

         Article 32. The Company shall make final profit distribution each year
base don the distributable after-tax profit after financial settlement. The
distributable profit of the Company shall be distributed based on fixed amount,
certain percentage and in the following order:

         1. For the first five years after the establishment of the Company, the
Company shall not distribute profit if there is no profit; if the Company has
distributable profit, it shall be distributed among all the Parties in
proportion to their contribution to the registered capital.


                                   -16-




         2. Starting from the 6th year of the establishment of the Company,
Party F shall receive a fixed amount of [***] million each year out
of the distributable profit.

         3. Surplus profit after distribution pursuant to the above Article 32
(2) clause shall be distributed among the Parties in proportion to their
contribution to the registered capital.

                                     [***]

         Article 33. The profit distribution shall be calculated in U.S.
Dollars. The Company shall pay profits of the Company in RMB to Party A, Party
B, Party C, Party D and Party E. At least [***] of Party F's profit shall be
paid in RMB, whereas the remainder shall be paid to Party F in U.S. Dollars.
Distributions in RMB above [***] to Party F shall be the average price of the
buying and selling price published by the People's Bank of China on the date of
payment.

                                     [***]

         Article 34. No profits shall be distributed until the losses of the
previous fiscal year have been made up. Undistributed profits from the previous
fiscal year shall be distributed together with the profits of the current fiscal
year.

         Article 35. The company shall be responsible to convert RMB into U.S.
Dollars for the portion of profit that shall be distributed in U.S. Dollars to
Party F according to the relevant foreign exchange administration rules of the
State.

                                   Chapter 14.
                           Construction of the Project

         Article 36. The land issues of the Project of the Company shall be
handled according to the stipulations as follows:


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

                                   -17-





                  (a) the Company will enter into Right of Ways and Land Lease
                  Contract with relevant land management authorities and the
                  Company shall have proprietary right of use on the land during
                  the entire joint venture term (including any advancement or
                  extension) and all necessary right of enough access to the
                  Land and public roads nearby.

                  (b) the Company hereby entrusts Party D to apply, under the
                  name of the Company, the land use certificate for the use of
                  Land proprietorial from the relevant land management
                  authority. Such Land use right shall be free from any
                  guarantee (including but not limited to mortgage, pledge or
                  lien) or lease.

                  (c) the prepaid money, expenses prepaid by the Parties for
                  getting the land use right prior to capital contribution,
                  after being audited by relevant authorities and the Company,
                  shall be reimbursed by the Company to such Party immediately
                  after the initial injection of the registered capital of the
                  Parties, plus the interest on such prepaid expenses
                  calculating form the date of prepayment to the date of
                  reimbursement. The interest thereon shall be determined
                  according to the interest rate quoted by the State Development
                  Bank for the loan of similar term.

         Article 37. The Parties agree that, during the construction of the
Power Plant, a portion of the equipment for the Project shall be foreign
manufactured and warranted equipment, specifically, steam turbines, generators,
boilers and power plant control systems. At the same time the Parties agree that
the Company will maximize the use of Chinese labor, raw materials and equipment
in order to lower the costs of the Project and the electricity price.

         Article 38. Party D shall undertake the construction of the Project by
entering into an EPC Contract with the Company on fixed schedule, fixed price,
turnkey EPC basis. The EPC Contract shall include articles on liquidated damages
acceptable to the investors and the General Contractor. The Company shall not
take the risk of construction of the Project. Force Majeure events shall be
dealt with in accordance with relevant articles of the EPC Contract.

         Article 39. The general contractor shall, in accordance with the terms
and conditions of the EPC Contract, be responsible for the design, procurement,
construction, test run of the Power Plant and take all the liabilities before
the delivery of the completed Power Plant to the Company in accordance with
acceptance standards in EPC Contract. The General Contractor shall sign the
Equipment Procurement Contract (EP Contract) with the foreign equipment
suppliers in the name of the Company which shall constitute a part of the EPC
Contract. The General Contractor shall take all the responsibilities under EP
Contract.

                                   Chapter 15
                   Operation and Management of the Power Plant


                                      -18-





         Article 41. The Company shall be responsible for the management of the
Power Plan and entrust Party D to be the Operation responsible for the operation
of the Plant by way of executing O&M Contract with Part D. The Joint Venture
shall not take any risk related to the operation and maintenance of the Power
Plant. Force Majeure events shall be dealt wit in accordance with the relevant
articles under O&M Contract entered into between the Joint Venture and the
Operator.

         The O&M Contract shall include but not limited to the following:

                  a)  power generation according to Power Purchase Contract

                  b)  the calculation formula, quota and payment method related
                  to the operation cost

                  c)  calculation formula and payment method of management fee

                  d)  assurance to keep the equipment in good form and safe
                  operation

                  e)  guarantee for liquidated damages and reward of excess
                  power generation

         Article 42. Operation shall take all the liabilities under the
Operation Contract for the operation of the Power Plant during the joint venture
term to ensure the Company can sell the electricity as per the Power Purchase
Contract.

                                   Chapter 16
                                      Fuel

         Article 43. The coal required by the Power Plant shall be supplied
pursuant to the Coal Supply Contract which is entered into between the Company
and the coal suppliers in Shanxi. Party C and Party D shall assist the Company
to buy the coal at the price applied by Shanxi Provincial Power Company to its
power plants to secure the long-term, steady and sufficient coal supply for
production of the Power Plant.

                                   Chapter 17
                            Procurement of equipment

         Article 44. The Company can decide on its own to directly procure from
local or foreign suppliers the equipment, material or other items required by
the Joint Venture Company in accordance with relevant Chinese laws, and enter
into equipment procurement contract with relevant suppliers.

                                   Chapter 18
                               Sale of Electricity


                                      -19-





         Article 45. All the electricity produced by the Power Plant shall be
purchased by Jiangsu Provincial Power Company pursuant to the Power Purchase
Contract.

         Article 46. The electricity price shall be determined according to the
principles of recovering all power generating costs, achieving the Reasonable
Profit, timely repayment of principal and interest on loans, paying taxes and
fees and allocating the three funds, based on annual average utilization hours
of the Power Plant no less than [***] hours for the first [***] years and no
less than [***] hours for the last [***] years of the term of the Joint Venture
as well as other factors. The power price shall be adjusted once a year based on
the generation cost, the repayment of principal and interest, exchange rate
fluctuation, inflation and tax change, and timely adjusted upon occurrence of
any special situation. Such electricity price principles shall be subject to the
prior approval by the examination and approval authority for the electricity
price.

         Power Purchase Contract shall have clauses on electricity payment and
payment guarantee which shall be in accordance with the requirements of the
Lenders.

         Article 47. The Company and the Parties shall utilize the Power Plan to
generate and sell as much electricity as possible on the basis of [***] annual
average utilization hours. Jiangsu Provincial Power Company shall purchase the
electricity with no less than [***] of annual average utilization hours for the
first [***] years of the term of the Joint Venture and no less than [***] annual
utilization hours for the last [***] years of the term of the Joint Venture, and
purchase as much excess electricity produced by the Power Station as possible.

                                   Chapter 19
                            Project Development Costs

         Article 48. The costs that have been paid by the Parties related to
Project development shall be in accordance with relevant provisions of the State
and shall be processed as follows:

                  (a)      Costs incurred and prepaid for prior to the
                           establishment of the Company by Parties A, B, C, D
                           and E on behalf of or for the Yangcheng Power Station
                           Preparatory Office, shall be reimbursed by the
                           Company to such Parties immediately after the initial
                           injection of the registered capital, plus the
                           interest calculated based on the interest rate quoted
                           by the State Development Bank of China for the loan
                           of similar term.

                  (b)      Costs incurred by the Preparatory Office in Beijing
                           prior to the establishment of the Company, except for
                           the salaries of the Parties' representatives,
                           business travel expenses and communication expenses,
                           shall be reimbursed by the Company to such parties
                           immediately after the initial injection of the
                           registered capital, plus the interest calculated
                           based on the 


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

                                      -20-




                           interest rate quoted by the State Development Bank
                           of China for the loan of similar term.

                           The costs incurred as above-mentioned in (a) and (b)
                           upon the approval of the Board of Directors after the
                           establishment of the Joint Venture shall be
                           reimbursed by the Company.

                  (c)      In the event of early termination of the Company
                           within 3 months of the establishment of the Company,
                           the expenses of the Preparatory Office prepaid by one
                           or several Parties shall be shared by all the Parties
                           in proportion to their contributions to the
                           registered capital, subject to the unanimous approval
                           of the Board of Directors.

                                   Chapter 20
                                Labor Management

         Article 49. All matters concerning labor management of the Company,
including the establishment of a trade union organization, the conclusion of
labor contracts between the Company and the individual workers and staff members
of the Company, and the recruitment, compensation, bonuses, dismissal, welfare
benefits and labor insurance of workers and staff members shall be handled in
accordance with the applicable laws and regulations of the PRC and the decisions
of the Board of Directors.

         Article 50. The Company shall allot each month an amount of money equal
to two percent (2%) of the total amount of the actual wages of the staff and
workers of the Company as the funds of the Trade Union, which shall be used by
the trade union of the Company in accordance with the Measures on Management of
Trade Union Funds formulated by the All China Federation of Trade Unions.

                                   Chapter 21
                                    Taxation

         Article 51. The Company shall pay taxes in accordance with the
stipulations of the relevant laws and regulations of the PRC.

         Article 52. The Company shall do its best to obtain the benefits of all
of the tax exemptions, reductions and preferences as provided under the laws and
regulations of the PRC.

         Article 53. Employees and workers of the Company shall pay individual
income tax according to the relevant laws and regulations of the PRC.

                                   Chapter 22
                       Financing, Accounting and Auditing


                                      -21-





         Article 54. The Company shall adopt the RMB as its accounting unit. The
exchange rate of conversion of foreign currency into RMB in the accounts shall
be carried out according to relevant accounting rules.

         Article 55. The Company shall adopt accounting principles in accordance
with the provisions of applicable Sino-foreign cooperation joint venture
accounting regulations.

         Article 56. The fiscal year of the Company shall be from January 1 to
December 31 of each year. All vouchers, receipts, and account books used in the
keeping of accounts shall be written in Chinese. Upon the reasonable request of
Party F, the Company may provide English translations of such vouchers, receipts
and account books necessary for Party F. All financial statements shall be
written in both the Chinese language and the English language.

         Article 57. With respect to the financial auditing of the Company, an
independent auditor registered in China shall be retained to do examination and
verification. The examination and verification report written both in Chinese
and English shall be submitted to the Board of Directors.

         Article 58. Within ten days after the end of each month, the Company
shall submit financial statements of the Company for the previous month to the
Parties. Within twenty days after the end of each quarter, the Company shall
submit the financial statements of the Company for the previous quarter to the
Parties. In the first month of each fiscal year the general manager and the
chief accountant of the Company shall work out and submit balance sheet, cash
flow statements, profits and losses statements and profit distribution plan
pursuant to the Contract for the previous year to the Board of Directors for
examination and approval, and at the same time also to the Parties.

         Article 59. In the event any Party would like to employ its own
independent auditor at its own cost to undertake checking and examination of the
Company accounts and financial statements, the Company shall provide convenience
as long as the work of the auditor does not affect the normal operation of the
Company.

                                   Chapter 23
               Liability for Breach of Contract and Force Majeure

         Article 60. If any Party fails to make its capital contributions in the
amounts and at the time as set forth in Article 8 and Article 11 of this
Contract, commencing from the first day of arrears, the breaching Party shall
pay a daily penalty for breach of Contract to the non-breaching Parties which is
equal to [***] of the contribution in arrears and
which shall be shared by the non-breaching Parties in proportion to their
contributions to the registered capital. If a contribution is in arrears for
3 months, the non-breaching Parties shall have the right to terminate this
Contract or supersede the status of the breaching Party, and make such capital
contribution to the Company that should be contributed by the breaching


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

                                   -22-





Party, and at the same time enjoy the corresponding rights and interests in the
Company that should be enjoyed by the breaching Party. Such suppression shall be
approved by the original examination and approval authority and registered with
the administration of industry and commerce. The non-breaching parties may claim
the compensation from the breaching Party for the losses resulting from its
failure to make its capital contribution according to the law. However, in the
event that the Project Documents required by the Project can not be implemented
due to heir inexecution, or, the necessary approval required by the Project can
not be obtained within 3 months of the establishment of the Company, the Parties
shall not be liable for any default and damage incurred thereof.

         Article 61. When this Contract or its Appendices cannot be performed or
cannot be performed completely because of the fault of one of the Parties, the
Company and the non-breaching Parties shall send a notice to the breaching Party
requiring it to rectify its default within 30 days from receipt of such notice.
If within such period rectification has not been made by the breaching Party, it
shall be considered to constitute a breach of this Contract and the breaching
Party shall be liable for compensating the Company and the non-breaching Party
for the losses suffered. If more than one Party is in default, each breaching
Party shall, in accordance with the actual circumstances, respectively bear its
share of the liability for breaching the Contract.

         Article 62. Failure of a Party to execute its rights or take any
actions in connection with a breach of this Contract by any other Party shall
not be deemed to be a waiver of the rights relating to the breaching Party's
liabilities or obligations. Any waiver at any time, by a Party, of any of its
rights with respect to a certain breach of the other Parties or with respect to
the other matters resulting from such breach, shall not be considered a waiver
of any other rights with respect to another subsequent breach or other matters
arising from such breach.

         Article 63. When the performance of this Contract is directly affected
or this Contract cannot be performed according to the agreed terms because of
earthquake, typhoon, flood, fire, war and other events of force majeure that are
unforesseable and of which the occurrence and consequences cannot be prevented
or avoided the Party that encounters the above-mentioned events of force majeure
shall immediately inform the other Parties by facsimile, and, within 15 days,
provide details of the event, together with a valid certifying document
evidencing the reasons for which the Contract cannot be performed or cannot be
performed in part or for which performance needs to be delayed. Such certifying
document shall be provided by the local notarial office where the force majeure
occurred. In accordance with the degree of impact of the event on the
performance of the Contract, the Parties shall discuss and decide on the
extension of the term of the Joint Venture, or whether to terminate this
Contract, or whether there is to be full or partial exemption from
responsibility for performing the Contract, or whether the performance of the
Contract is to be delayed, provided that the Party that encounters an
event of force majeure must use its best efforts to perform its obligations
under the Contract and to reduce the loses to the other Parties or to the
Company arising from the event of force majeure, before it can be excused
from liability for a breach of contract. If the event of force majeure shall


                                      -23-




occur and be continuing for a period of more than 120 days, the Board of
Directors at the request of at least tow Directors, shall meet to determine
first whether to extend the term of the Joint Venture, or to terminate this
Contract.


                                   Chapter 24
                       Term and Termination of the Company

         Article 64. The term of the Company shall be 20 years commencing from
the date of the issuance of the Business License.

         In the event that the commercial operation of the Project is delayed or
suspended for an accumulated period of 6 months due to any Force Majeure event,
or any events unforeseeable and uncontrollable by the Company, the Parties and
the Board of Directors shall unanimously agree to apply for a corresponding
extension of the term of the Company, and submit application to the original
examination and approval authority for approval at least six months before the
expiration of the Company's term.

         Article 65. Before the expiration of the term of the Company, upon the
occurrence of the following events under subsections (a) and (b) below, the
Board of Directors shall meet to discuss remedy for the occurred events, if no
remedy is effective, then with the unanimous approval of the Board of Directors,
this Contract may be terminated and the Company may be dissolved. Upon the
occurrence of the following events under subsections (c), and (d) below, the
Parties agree that the Board of Directors, upon receipt of any Party's notice in
writing, shall meet to discuss a remedy for the occurred events, if no remedy is
effective, then the Board of Directors shall unanimously agree to terminate this
Contract and dissolve the Company. Any of the above early termination case shall
be submitted to the original approval authority for approval.

         When any situation described in (e) occurs, the non-breaching Party has
right to apply by itself to the original examination and approval authority to
terminate the Contract and dissolve the Company, and also has the right to
request the breaching Party(s) to indemnify any losses incurred to the
non-breaching Party and the Company. Any Party in violation of any of the
Project Documents shall bear relevant responsibility as per the relevant clauses
of such Project Document.

         (a)      Any situation described in Article 63 of this Contract occurs;

         (b)      The Company is unable to continue its business due to serious
                  economic losses and such situation has lasted for one year;

         (c)      The Company fails to achieve its business objectives due to
                  material change of Chinese law and policies pursuant to
                  Article 17 of this Contract, or due to the revocation,
                  suspension or termination of the governmental approvals
                  required by the Project;


                                      -24-





         (d)      The EPC Contract, Power Purchase Contract, the Coal Supply
                  Contract, the Operation Contract, Interconnection and Dispatch
                  Agreement, RMB Loan Agreement or U.S. Dollar Loan Agreement
                  are terminated or abandoned; or

         (e)      One or several Parties fail to perform their major obligations
                  under the Contract or Project Documents, and such situation is
                  not effectively cured within 30 days of its occurrence.

         Article 66. Except for the occurrence of the situation described in
Article 65, after the contribution of each Party to the registered capital and
financial closing, prior to the repayment of the principal and interest of loan,
the Company shall not be terminated.

                                   Chapter 25
                           Disposal of Assets in the Dissolution of the Company

         Article 67. Upon the expiration of the term of the Company or upon any
termination before such expiration, the Board of Directors shall put forward the
principles and procedures of the liquidation of the Company in accordance with
the Articles of Association, and organize the liquidation committee to conduct
the matters with respect to the liquidation of the Company. The Board of
Directors shall submit its proposal to the relevant governmental competent
authority.

         Article 68. The liquidation of the Company shall be conducted under the
supervision of the relevant competent governmental authority and the laws of the
PRC. The assets of the Company shall be disposed and distributed according to
the stipulated procedures and principles of the liquidation.

         Article 69. According to relevant laws and regulations of China, in the
event of liquidation upon or prior to the expiration of the Company, the
Company, after having paid the liquidation expenses, shall repay its debt in the
following order:

         (a)      the salaries of employees and labor insurance cost

         (b)      the Company's taxes in arrears

         (c)      the Company's debt

In case the proceeds form the liquidated assets are insufficient to repay in
sequence the debt in the same category, the proceeds shall then be distributed
on pro rata basis within such category.

         Article 70. In the event of liquidation upon the expiration of the term
of the Company, after the debt is paid in the stipulated order under Article 69,
Party F shall agree to transfer all of its rights and interests in the Company
to the five Chinese parties for free, withdraw from the Company, refrain from
involving in distribution of assets conducted by the Company thereafter. The
five Chinese parties have the right 

                                      -25-





to continue or terminate the business of the Company with the remaining assets
being distributed among the five Chinese parties in proportion to their capital
contributions.

         Article 71. In the event of termination prior to the expiration of the
term of the Company due to the occurrence of the situation described in Article
63, liquidation of the Company shall be conducted. After the debt is paid in the
order stipulated in Article 69, the remaining assets shall be distributed among
all the Parties first to ensure each Party has achieved same financial internal
return rate, and then be distributed among all the Parties in proportion to
their contribution of registered capital.

         Article 72. Except for any situation described under Article 63, in the
event of liquidation prior to the expiration of the term of the Company, after
the debt is paid according to the stipulated order under Article 69, and the
Company has made up for the full amount of Party F's Reasonable Profit to be
calculated as of the date of early termination with the remaining assets. Party
F shall agree to transfer all its rights and interests in the Company to the
five Chinese parties for free. Thereafter, Party F shall withdraw from the
Company and refrain from involving in the distribution of assets conducted by
the Company. The five Chinese parties have the right to continue or to terminate
the business of the Company with the remaining assets being distributed among
the Chinese parties in proportion to their capital contributions.

         In the event of termination prior to the expiration of the term of the
Company due to the breach of Contract by one or several Parties, the
stipulations in Article 60, Article 61, and Article 62 shall be applied.
Thereafter, the Company shall conduct the liquidation according to the laws and
provisions of the Contract.

         Article 73. During the period of liquidation, the liquidation committee
shall sue and defend on behalf of the Company. After the liquidation of the
Company is completed, the liquidation report shall be formulated by the
liquidation committee and submitted to the Board of Directors for approval and
reported to the relevant Chinese competent governmental authority.

                                   Chapter 26
                                    Insurance

         Article 74. The insurance policies that the Company purchases on
various kinds of risks shall be purchased from Chinese insurance companies or
insurance companies allowed by Chinese law based on commercially reasonable
principles. The types of insurance, amount of insurance, and term shall be
discussed and decided by the Board of Directors.

                                   Chapter 27
                    Applicable Law and Settlement of Disputes

         Article 75. The execution, validity, interpretation, performance and
settlement of disputes under this Contract shall all be governed by the laws of
China.


                                      -26-




         Article 76. With respect to any dispute arising out of the performance
of this Contract, the Parties through the Board of Directors shall use their
good faith best efforts to settle such dispute through friendly consultation.

         Article 77. If a dispute cannot be resolved through consultation, upon
agreement of the Parties, the dispute may be submitted to a mixed conciliation
committee for conciliation at a location and in a manner to be agreed by the
Parties. The conciliation committee shall be composed of one member of the
American Arbitration Association and one member of the China International
Economic Trade Arbitration Commission. The responsibility of the conciliation
committee shall be to seek a solution to the dispute. Within one month of the
submission of the dispute to it, the conciliation committee shall put forward a
conciliation plan for the Parties. If any of the Parties does not accept the
conciliation plan, then the dispute shall be submitted to arbitration according
to the provisions of this Chapter.

         Article 78. Arbitration shall be conducted at the Singapore
International Arbitration Center according to the UNICITRAL Rule by an
arbitration tribunal composed of three (3) arbitrators. The award of such
arbitration shall be the final and binding to the Parties.

         Article 79. In the course of the arbitration, this Contract shall
continue to be executed except for the parts in dispute and being arbitrated.

                                   Chapter 28
                               Language and Copies

         Article 80. The Chinese version and the English version of this
Contract shall be equally authentic.

             Article 81. This Contract is executed in ten original copies both
in Chinese and English, and each Party shall retain one copy of each such
version, one copy of such version will be submitted to the authority in charge
of the examination and approval of the contract, one copy of such version will
be submitted to the department responsible for industry and commerce, and two
copies of such version will be submitted to the Company for its records. The
copies may be separately sent to the relevant PRC departments.

                                   Chapter 29
                                     Notices

         Article 82. Notices or other communication required to be given
pursuant to this Contract shall be written in Chinese and English, and delivered
personally or sent in letter form, telex or facsimile to the legal address of
such Party as follows:


                                      -27-




Party A:

North China Electric Power Group Corporation
Legal address:    32  Zao Lin Qian Street,
                  Xuan Wu District,
                  Beijing, People's Republic of China
Tel:              (010)    63543377
Fax:              (010)    63543377 - 2296


Party B:

Jiangsu Province Investment Corporation
Legal address:    No.5 Shanghai Road
                  Nanjing, Jiangsu Province
                  People's Republic of China
Tel:              (025)    6651624
Fax:              (025)    6611119


Party C:

Shanxi Energy Enterprise (Group) Company
Legal address:    Building 10 Guo Shi Street
                  Taiyuan, Shanxi Province
                  People's Republic of China
Tel:              (0351)   3090208
Fax:              (0351)   3090206


Party D:

Shanxi Provincial Power Company
Legal address:    12 Nan Xiao Qiang
                  Taiyuan, Shanxi Province
                  People's Republic of China
Tel:              (0351)   2023511
Fax:              (0351)   4012296


Party E:

Jiangsu Provincial Power Company
Legal address:    20 Beijing West Road
                  Nanjing, Jiangsu Province
                  People's Republic of China


                                      -28-




Tel:              (025)    6637312
Fax:              (025)    3307576


Party F:

AES China Generating Co. Ltd.
Legal address:    9/F., Allied Capital Resources Bldg.,
                  32-38 Ice House Street,
                  Central, Hong Kong
Tel:              (852)    28425111
Fax:              (852)    25301673

                                   Chapter 30
                         Effectiveness and Miscellaneous

         Article 83. This Contract shall supersede all prior agreements,
understandings, covenants and representations of the Parties with respect to the
subject matter hereof.

         Article 84. Nothing in this Contract is intended to confer upon any
Party the rights or authority to individually bind the Company or other Parties,
expressly or implicitly, to any agreement, obligation or commitment.

         Article 85. This Contract, after formal execution by duly authorized
representatives of each Party, shall come into effect at the date of the
approval of MOFTEC.

         Article 86. Any amendment to this Contract shall be subject to
unanimous agreement of the Parties and shall come into effect upon approval of
MOFTEC.

         Article 87. This Contract is executed by duly authorized
representatives of each Party in Beijing, China in August 1996.


                                      -29-




North China Electric Power Group Corporation as Party A

By:____________________________________________
Title:



Jiangsu Province Investment Corporation as Party B

By:____________________________________________
Title:



Shanxi Energy Enterprises (Group) Company as Party C

By:____________________________________________
Title:



Jiangsu Provincial Power Company as Party E

By:____________________________________________
Title:



AES China Generating Company, Ltd. as Party F

By:____________________________________________
Title:


                                      -30-




                                TABLE OF CONTENTS

                                                                 PAGE


CHAPTER 1


GENERAL PRINCIPLES.................................................2


CHAPTER 2


DEFINITIONS........................................................2


CHAPTER 3


PARTIES TO THE JOINT VENTURE.......................................4


CHAPTER 4


ESTABLISHMENT OF THE COMPANY.......................................4


CHAPTER 5


BUSINESS PURPOSE AND SCOPE.........................................5


CHAPTER 6


TOTAL INVESTMENT AND REGISTERED CAPITAL............................5


CHAPTER 7


FINANCING AND COOPERATION CONDITION................................6


CHAPTER 8


FAVORABLE TREATMENT TO THE COMPANY.................................7


CHAPTER 9


ASSIGNMENT OF RIGHT AND INTEREST IN REGISTERED CAPITAL.............7


CHAPTER 10


RESPONSIBILITIES OF THE PARTIES....................................8


CHAPTER 11


BOARD OF DIRECTORS................................................13


CHAPTER 12


OPERATION AND MANAGEMENT ORGANIZATION.............................15


                                   -31-




CHAPTER 13


PROFITS, DISTRIBUTION, RISKS AND LOSSES SHARING...................16


CHAPTER 14.


CONSTRUCTION OF THE PROJECT.......................................17


CHAPTER 15


OPERATION AND MANAGEMENT OF THE POWER PLANT.......................18


CHAPTER 16


FUEL..............................................................19


CHAPTER 17


PROCUREMENT OF EQUIPMENT..........................................19


CHAPTER 18


SALE OF ELECTRICITY...............................................19


CHAPTER 19


PROJECT DEVELOPMENT COSTS.........................................20


CHAPTER 20


LABOR MANAGEMENT..................................................21


CHAPTER 21


TAXATION..........................................................21


CHAPTER 22


FINANCING, ACCOUNTING AND AUDITING................................21


CHAPTER 23


LIABILITY FOR BREACH OF CONTRACT AND FORCE MAJEURE................22


CHAPTER 24


TERM AND TERMINATION OF THE COMPANY...............................24


CHAPTER 25


DISPOSAL OF ASSETS IN THE DISSOLUTION OF THE COMPANY..............25


                                   -32-




CHAPTER 26


INSURANCE.........................................................26


CHAPTER 27


APPLICABLE LAW AND SETTLEMENT OF DISPUTES.........................26


CHAPTER 28


LANGUAGE AND COPIES...............................................27


CHAPTER 29


NOTICES...........................................................27

                                   -33-