Connected Transaction

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DATANG INTERNATIONAL POWER GENERATION CO., LTD.
(a sino-foreign joint stock limited company incorporated in the People's Republic of China)
(Stock Code: 00991)

ANNOUNCEMENT

CONNECTED TRANSACTION

TECHNOLOGICAL TRANSFORMATION PROJECTS CONTRACT

On 23 December 2015, Duohe Power Plant, as owned by the Company, entered into the Technological Transformation Projects Contract with Datang Environment Company, and the contract amount was RMB128.86938 million.

LISTING RULES IMPLICATIONS

As at the date of this announcement, CDC is the controlling Shareholder of the Company, which together with its subsidiaries hold 34.77% of the issued share capital of the Company. Pursuant to Chapter 14A of the Listing Rules, since Datang Environment Company is a subsidiary of CDC and hence a connected person of the Company, the transactions under the Technological Transformation Projects Contract constitutes a connected transaction of the Company.

Since one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the transaction amount under the Technological Transformation Projects Contract, when aggregated with the Previous Transactions, is above 0.1% but less than 5%, the Technological Transformation Projects Contract and the transaction thereunder are subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules but do not require the approval by the independent Shareholders of the Company.

TECHNOLOGICAL TRANSFORMATION PROJECTS CONTRACT

Date of the Contract:

23 December 2015

Parties of the Contract:

(1)   Owner: Duohe Power Plant

(2)   Main Contractor: Datang Environment Company

Major Terms of the Contract:

(1)   Subject matter: Duohe Power Plant agreed to appoint Datang Environment Company to undertake the EPC general contracting project of stockyard shed building for Duohe Power Plant.

(2)   Aggregate contract price and breakdown:

Total contract price (RMB'000)	Breakdown of the contract price
	Facilities fees (RMB'000)	Construction and installation fees (RMB'000)	Consideration for technical services (RMB'000)
128,869.38	8,712.4	116,476.98	3,680

(3)   Settlement and payment:

Prepayment for the contract:	Within one month from the effective date of the contract, the main contractor shall provide an irrevocable performance bond guarantee in an amount equivalent to 10% of the total contract price and a financial receipt equivalent to 30% of the total contract price, and the owner shall pay 30% of the total contract price to the main contractor as prepayment within one month upon its verification.
Payment of facilities fees:	i)      After the main contractor has submitted documents including the checklist of relevant major facilities and materials, the owner shall pay 10% of the facilities fees to the main contractor within one month upon its verification; ii)     After the main contractor has delivered each batch of facilities to the place of delivery at a specified time and has provided the owner with documents including the checklist of facilities and a financial receipt equivalent to 30% of the facilities fees, the owner shall pay 30% of the facilities fees to the main contractor within one month upon its verification; iii)    Upon completion of the project, the main contractor shall provide the owner with a financial receipt equivalent to 30% of the facilities fees, and the owner shall pay 20% of the facilities fees to the main contractor within one month upon acceptance by relevant authorities; iv)    The remaining 10% of the facilities fees shall be reserved as the quality assurance fees for the facilities. Upon the provision of the final acceptance certificate by the main contractor, the owner shall pay 10% of the facilitiesfees to the main contractor within one month upon its verification.
Payment of construction and installation fees:	i)      Upon completion of the civil foundation of the project and satisfaction of conditions in relation to grid installation, the owner shall pay 30% of the construction and installation fees; ii)     Upon completion of the project, the owner shall pay 20% of the construction and installation fees; iii)    Upon completion of the construction and modification of the project, the owner shall pay 10% of the construction and installation fees within one month upon acceptance by relevant authorities; iv)    The remaining 10% of construction and installation fees shall be reserved as the quality assurance fees. Upon the provision of the final acceptance certificate by the main contractor, the owner shall pay 10% of the construction and installation fees within one year upon its verification.
Payment of consideration for technical services:	i)      Upon completion of the construction drawing design, the owner shall pay 50% of the consideration for technical services to the main contractor within one month upon approval and confirmation by relevant authorities; ii)     Upon completion of the completion drawing design, the owner shall pay 10% of the consideration for technical services to the main contractor within one month upon approval and confirmation by relevant authorities; iii)    The remaining 10% of the design fees shall be reserved as quality assurance fees for design services. Upon the provision of the final acceptance certificate by the main contractor, the owner shall pay 10% of the consideration for technical services within one month upon its verification.

(4)   Effective date of contract: Effective when duly signed by the legal representative (person-in-charge of the enterprise) or the proxy (with written authorisation by the legal representative) of the parties with their respective company seals affixed thereto.

REASONS FOR AND BENEFITS OF ENTERING INTO THE TECHNOLOGICAL TRANSFORMATION PROJECTS CONTRACT

According to the annual technological transformation plan of the Company, the Company invited public tender for the Technological Transformation Projects for the power generating units of its power plants. After carrying out relevant evaluation procedures and considering various factors, including the technical experiences, professional qualification, business reputation, project management skills, consideration amount and other relevant factors of all the tenderers, Datang Environment Company was selected as the tender winner for the EPC general contracting project of stockyard shed building for Duohe Power Plant.

Datang Environment Company possesses sufficient qualification with rich expertise in carrying out the Technological Transformation Projects. The Company considers that such companies will be capable to ensure the Technological Transformation Projects to be carried out smoothly.

The Company and Duohe Power Plant agreed to appoint Datang Environment Company to carry out the Technological Transformation Projects, mainly for the purposes of ensuring the on-schedule completion of Technical Transformation Projects of Duohe Power Plant, to fully ride on its professional advantage, as well as to control cost to a certain extent through large scale purchasing of facilities.

The Directors (including independent non-executive Directors) are of the view that the transactions under the Technological Transformation Projects Contract were duly completed by way of public tender; the relevant terms are fair and reasonable and conducted on normal commercial terms and are in the interests of the Company and its shareholders as a whole.

BOARD'S APPROVAL

Pursuant to the resolution of the sixteenth meeting of the eighth session of the Board in respect of the consideration and approval of the "Resolution on the Tendering for the Technological Transformation Projects of Datang International and its Subsidiaries" (details of which were set out in the overseas regulatory announcement of the Company dated 19 December 2014), the Company and its subsidiaries have invited public tender for their Technological Transformation Projects in 2015.

None of the Directors has material interest in the transactions under the Technological Transformation Projects Contract. Connected Directors, including Chen Jinhang, Hu Shengmu and Liang Yongpan, have abstained from voting for this resolution at the relevant Board meeting pursuant to the Listing Rules of the Shanghai Stock Exchange.

INFORMATION OF THE PARTIES

1. The Company is principally engaged in the construction and operation of power plants, the sale of electricity and thermal power, the repair and maintenance of power equipment and power related technical services, with its main service areas being in the PRC.

2. CDC was established on 9 March 2003 with registered capital of RMB18,009 million and is principally engaged in the development, investment, construction, operation and management of power energy, organisation of power (thermal) production and sales; manufacturing, repair and maintenance of power equipment; power technology development and consultation; power engineering, contracting and consultation of environmental power engineering; development of new energy as well as development and production of power related coal resources.

3. Datang Environment Company is a subsidiary of CDC. With registered capital of RMB2,400 million, the company principally engaged in environmental project development and environmental facilities investment, operation and management etc.

4. Duohe Power Plant is a power plant owned by the Company and has an installed capacity of 1,300MW.

LISTING RULES IMPLICATIONS

As at the date of this announcement, CDC is the controlling Shareholder of the Company, which together with its subsidiaries hold 34.77% of the issued share capital of the Company. Pursuant to Chapter 14A of the Listing Rules, since Datang Environment Company is a subsidiary of CDC and hence a connected person of the Company, the transaction under the Technological Transformation Projects Contract constitutes a connected transaction of the Company.

Since one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the transaction amount under the Technological Transformation Projects Contract, when aggregated with the Previous Transactions, is above 0.1% but less than 5%, the Technological Transformation Projects Contract and the transaction thereunder are subject to the reporting and announcement requirements under Chapter 14A of the Listing Rules but do not require the approval by the independent Shareholders of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"Board"		the board of directors
"CDC"		China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is a controlling shareholder of the Company. CDC and its subsidiaries own approximately 34.77% of the issued share capital of the Company as at the date of this announcement
"Company"		Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange
"connected person"		has the meaning ascribed to it under the Listing Rules
"connected transaction"		has the meaning ascribed to it under the Listing Rules
"Datang Environment Company"		Datang Environment Industry Group Co., Ltd. is a subsidiary of CDC, details of which are set out in the section headed "Information of the Parties"
"Director(s)"		the director(s) of the Company
"Duohe Power Plant"		Duohe Power Plant of Datang International Power Generation Co., Ltd., a power plant owned by the Company, details of which are set out in the section headed "Information of the Parties"
"EPC"		all works including project design (including relevant modification design), supply, construction, installation, management, debugging, trial, defect elimination, and handover of information upon completion
"Listing Rules"		the Rules Governing the Listing of Securities on the Stock Exchange
"PRC"		the People's Republic of China
"Previous Transactions"		various technological transformation projects contracts entered into between power plants or subsidiaries of the Company and Datang Environment Company/Datang Environment Company and its subsidiaries or consortium, details of which are set out in the relevant announcements issued by the Company on 25 August 2015, 14 September 2015, 14 December 2015 and 17 December 2015 and the following technological transformation projects contracts: the "Contract on Modification of Centralised Chemical Water Treatment System for the Whole Power Plant of Inner Mongolia Datang International Tuoketuo Power Generation Company Limited" entered into between Inner Mongolia Datang International Tuoketuo Power Generation Company Limited and China Datang Technologies and Engineering Co., Ltd. on 18 December 2015 with a contract amount of RMB10.85 million.
"RMB"		Renminbi, the lawful currency of the PRC
"Stock Exchange"		The Stock Exchange of Hong Kong Limited
"Technological Transformation Projects"		refer to the technological transformation projects that transform obsolete technologies into advanced technologies and replace outdated technology and equipment with advanced ones by upholding the principle of technological advancement, thereby achieving the goal to expand production capacities through organic growth, diversify product portfolio and enhance product quality, at the same time saving energy, reducing raw materials consumption, enhancing labour productivity and increasing economic benefits
"Technological Transformation Projects Contract"		the "EPC General Contracting Contract on Stockyard Shed Building for Duohe Power Plant of Datang International Power Generation Co., Ltd." entered into between Duohe Power Plant and Datang Environment Company on 23 December 2015 with a contract amount of RMB128.86938 million
"%"		percentage

By Order of the Board
Ying Xuejun    
Company Secretary 

Beijing, the PRC, 23 December 2015

As at the date of this announcement, the Directors of the Company are:

Chen Jinhang, Hu Shengmu, Wu Jing, Liang Yongpan, Ying Xuejun, Cao Xin, Cai Shuwen,
Liu Haixia, Guan Tiangang, Yang Wenchun,
Jiang Guohua*, Feng Genfu*, Luo Zhongwei*, Liu Huangsong*, Jiang Fuxiu*

* Independent non-executive Directors