Disclosable Transaction and Connected Transaction

Disclosable Transaction and Connected Transaction

    Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong 
Kong Limited take no responsibility for the contents of this announcement, 
make no representation as to its accuracy or completeness and expressly 
disclaim any liability whatsoever for any loss howsoever arising from or in 
reliance upon the whole or any part of the contents of this announcement.

               DATANG INTERNATIONAL POWER GENERATION CO., LTD.

      (a sino-foreign joint stock limited company incorporated in the 
                         People's Republic of China)

                              (Stock Code: 991)
                                 ANNOUNCEMENT
                          DISCLOSABLE TRANSACTION AND
                             CONNECTED TRANSACTION

    ENTRUSTED LOAN AGREEMENT                                             
    On 29 December 2009 and 12 January 2010, the Company entered into the 
General Entrusted Loan Agreement and the Revolving Entrusted Loan Agreement, 
respectively, with Datang Finance Company and Duolun Coal Chemical Company in 
relation to the provision of a general entrusted loan of a principal amount of 
RMB300 million and a revolving entrusted loan of a principal amount of 
RMB3,000 million by the Company to Duolun Coal Chemical Company through the 
Entrusted Loan Arrangement, in which Datang Finance Company acts as a lending 
agent.                                                               
                                                                         
    DISCLOSABLE TRANSACTION AND CONNECTED TRANSACTION                    
    As each of the applicable percentage ratios (as defined in Rule 14.07 of 
the Listing Rules) for the principal amount of loans under the Revolving 
Entrusted Loan Agreement is more than 5% but less than 25%, the Revolving 
Entrusted Loan Agreement constitutes a disclosable transaction of the Company 
and is subject to the reporting and announcement requirements under Chapter 14 
of the Listing Rules. 
    As at the date of this announcement, CDC is the controlling shareholder of 
Datang Finance Company holding 52.5% of its equity interest. Duolun Coal 
Chemical Company is owned as to 60% and 40% by the Company's wholly-owned 
subsidiary - Energy and Chemical Company and CDC, respectively. CDC is the 
controlling shareholder of the Company as at the date of this announcement, 
holding approximately 35.61% of the issued share capital of the Company. 
Duolun Coal Chemical Company and Datang Finance Company are therefore 
connected persons of the Company under Chapter 14A of the Listing Rules and 
the Entrusted Loan Arrangement constitutes a connected transaction of the 
Company under Rule 14A.13(2) of the Listing Rules. 
    As each of the applicable percentage ratios (as defined in Rule 14.07 of 
the Listing Rules) for the principal amount of loans under the General 
Entrusted Loan Agreement is less than 2.5% and the Entrusted Loan Arrangement 
is entered into on normal commercial terms, the General Entrusted Loan 
Agreement is only subject to the reporting and announcement requirements but 
is exempt from the requirement of approval by the Independent Shareholders 
under Rule 14A.66(2) of the Listing Rules.                                                       
    As one or more of the applicable percentage ratios (as defined in Rule 
14.07 of the Listing Rules) for the principal amount of loans under the 
Revolving Entrusted Loan Agreement is more than 2.5%, the Revolving Entrusted 
Loan Agreement is subject to the reporting, announcement and Independent 
Shareholders' approval requirements under Chapter 14A of the Listing Rules.                                                      
    The Company will also disclose the relevant details in the next published 
annual report and accounts of the Company in accordance with the relevant 
requirements as set out in Rule 14A.45 of the Listing Rules. A circular 
containing details of the Revolving Entrusted Loan Agreement, a letter from 
the Independent Board Committee of the Company and a letter from the 
independent financial advisor, both advising the terms of the Revolving 
Entrusted Loan Agreement, together with the notice of the EGM, will be 
despatched to the Shareholders as soon as possible in accordance with the 
requirements of the Listing Rules.               

    BACKGROUND
    On 29 December 2009 and 12 January 2010, the Company entered into the 
General Entrusted Loan Agreement and the Revolving Entrusted Loan Agreement, 
respectively, with Datang Finance Company and Duolun Coal Chemical Company in 
relation to the provision of a general entrusted loan of a principal amount of 
RMB300 million and a revolving entrusted loan of RMB3,000 million by the 
Company to Duolun Coal Chemical Company, in which Datang Finance Company acts 
as a lending agent, to replace the advances for the Duolun Coal Chemical 
Project provided by the Company to Duolun Coal Chemical Company and to be used 
as working capital for the Duolun Coal Chemical Project to ensure its smooth 
progress.  

    ENTRUSTED LOAN AGREEMENT

    Date 
    On 29 December 2009, the Company entered into the General Entrusted Loan 
Agreement with Datang Finance Company and Duolun Coal Chemical Company in 
relation to the provision of a general entrusted loan of a principal amount of 
RMB300 million by the Company to Duolun Coal Chemical Company through the 
Entrusted Loan Arrangement, in which Datang Finance Company acts as a lending 
agent.
    On 12 January 2010, the Company entered into the Revolving Entrusted Loan 
Agreement with Datang Finance Company and Duolun Coal Chemical Company in 
relation to the provision of a revolving entrusted loan of a principal amount 
of RMB3,000 million by the Company to Duolun Coal Chemical Company through the 
Entrusted Loan Arrangement, in which Datang Finance Company acts as a lending 
agent.

    Parties 

    (1) the Company, as the lender;
    (2) Datang Finance Company, as the lending agent; and
    (3) Duolun Coal Chemical Company, as the borrower.

    Major terms of the Entrusted Loan Agreement

    Entrusted Loan Arrangement
    Pursuant to the Entrusted Loan Agreement, Datang Finance Company is 
designated by the Company to act as a lending agent to, inter alia, release 
the Entrusted Loans, which are funded by the Company, to Duolun Coal Chemical 
Company and to monitor the use and repayment of the Entrusted Loans by Duolun 
Coal Chemical Company.

    Principal amount of the Entrusted Loans

    General entrusted loan: RMB300 million;
    Revolving entrusted loan: RMB3,000 million. Provided that the sources and 
uses of the loans being in compliance with the requirements of the financial 
regulators, Duolun Coal Chemical Company can apply for loans on a continuous 
basis, regardless of the number of loans and the amount of each of such loans, 
during the effective period of the Revolving Entrusted Loan Agreement provided 
that the outstanding balance of the principal amount of the loan under the 
Revolving Entrusted Loan Agreement does not exceed the loan limit (RMB3,000 
million). However, the sum of the amount of loans being applied by Duolun Coal 
Chemical Company and the outstanding balance of the principal amount of the 
loan under the Revolving Entrusted Loan Agreement shall not exceed the loan 
limit, i.e. RMB3,000 million.

    Term
    The term for the general entrusted loan of RMB300 million is 36 months 
from the date of entering into the General Entrusted Loan Agreement; while the 
term for the revolving entrusted loan of RMB3,000 million is not less than 30 
days and not more than 36 months for each loan term from the date of entering 
into the Revolving Entrusted Loan Agreement.

    Interest rate

    General entrusted loan:
    At a floating interest rate, being 10% less than the benchmark interest 
rate to be charged by other commercial banks, to be adjusted once every three 
months commencing from the first day of the interest payable period. 

    Revolving entrusted loan:
    At a floating interest rate, being 10% less than the benchmark interest 
rate to be charged by the People's Bank of China at the time of each of the 
revolving entrusted loans is made. 
    Such interest rate is arrived at after arm's length negotiation between 
the Company and Duolun Coal Chemical Company after considering the overall 
reduction of capital costs to the Group as the accounts of Duolun Coal 
Chemical Company (being the controlled subsidiary of Energy and Chemical 
Company) are consolidated to the accounts of the Company. 

    Repayment schedule for the principal of the Entrusted Loans
    One-off repayment of principal by Duolun Coal Chemical Company upon 
maturity of the Entrusted Loan Agreement. 

    Payment schedule for the interests of the Entrusted Loans 
    Interests for the revolving entrusted loan and the general entrusted loan 
shall be settled by Duolun Coal Chemical Company on a quarterly basis. The 
settlement date falls on the twentieth (20th) day of the last month of each 
quarter.

    Handling charge
    The handling charge for the Entrusted Loans under the Entrusted Loan 
Agreement is calculated at 0.025% of the principal amount of the Entrusted 
Loans under the Entrusted Loan Agreement. The Company shall pay such handling 
charge on an one-off basis to Datang Finance Company within five working days 
when the Entrusted Loan Agreement becomes effective. 

    Effective Date 
    The Entrusted Loan Agreement shall become effective when it is duly signed 
by the parties. 
    The Revolving Entrusted Loan Agreement is also subject to the approval by 
the Independent Shareholders pursuant to the Articles of Association and the 
Listing Rules.
    The General Entrusted Loan Agreement was executed on 29 December 2009 and 
the amount of loans granted did not exceed the loan limit of RMB300 million as 
at the date of this announcement.
    The Revolving Entrusted Loan Agreement was executed on 12 January 2010 and 
the amount of loans granted did not exceed the loan limit of RMB3 billion as 
at the date of this announcement. 

    REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN AGREEMENT
    In order to improve the turnover of capital at Duolun Coal Chemical 
Company and to ensure the smooth progress of the Duolun Coal Chemical Project, 
the Company intends to provide a general entrusted loan of not more than 
RMB300 million and a revolving entrusted loan of not more than RMB3,000 
million to Duolun Coal Chemical Company in separate batches according to the 
construction progress of the Duolun Coal Chemical Project. Duolun Coal 
Chemical Company is in the process of preparing formalities for application 
for banking facilities and it plans to repay the principals and the interests 
of the loans after the banking facilities are in place. Furthermore, according 
to the Entrusted Loan Agreement, Datang Finance Company shall collect a 
handling charge of 0.025% for acting as the lending agent for the Company's 
Entrusted Loans, which is lower than the handling charge imposed by other 
commercial banks for providing similar services. Therefore, the Company is of 
the view that the provision of the Entrusted Loans to Duolun Coal Chemical 
Company through Datang Finance Company is beneficial for the support of the 
smooth construction of the Duolun Coal Chemical Project and the reduction of 
the overall capital costs of the Company. 
    The Directors (including the independent non-executive Directors) are of 
the view that the terms of the General Entrusted Loan Agreement are fair and 
reasonable and have been determined on normal commercial terms as well as in 
the interests of the Company and the Shareholders as a whole. The terms of the 
Revolving Entrusted Loan Agreement were also negotiated on an arm's length 
basis between all parties thereto and were determined on normal commercial 
terms. The Directors (excluding the independent non-executive Directors whose 
views will be contained in the circular after considering the advice from the 
independent financial advisor) believe that the terms of the Entrusted Loan 
Agreement are fair and reasonable and in the best interests of the Company and 
the Shareholders as a whole.

    DISCLOSABLE TRANSACTION AND CONNECTED TRANSACTION
    As each of the applicable percentage ratios (as defined in Rule 14.07 of 
the Listing Rules) for the principal amount of the loans under the Revolving 
Entrusted Loan Agreement is more than 5% but less than 25%, the Revolving 
Entrusted Loan Agreement constitutes a disclosable transaction of the Company 
and is subject to the reporting and announcement requirements under Chapter 14 
of the Listing Rules. 
    As at the date of this announcement, CDC is the controlling shareholder of 
Datang Finance Company holding 52.5% of its equity interest. Duolun Coal 
Chemical Company is owned as to 60% and 40% by the Company's wholly-owned 
subsidiary - Energy and Chemical Company and CDC, respectively. CDC is the 
controlling shareholder of the Company as at the date of this announcement, 
holding approximately 35.61% of the issued share capital of the Company. 
Duolun Coal Chemical Company and Datang Finance Company are therefore 
connected persons of the Company under Chapter 14A of the Listing Rules and 
the Entrusted Loan Arrangement constitutes a connected transaction of the 
Company under Rule 14A.13(2) of the Listing Rules. 
    As each of the applicable percentage ratios (as defined in Rule 14.07 of 
the Listing Rules) for the principal amount of loans under the General 
Entrusted Loan Agreement is less than 2.5% and the Entrusted Loan Arrangement 
is entered into on normal commercial terms, the General Entrusted Loan 
Agreement is only subject to the reporting and announcement requirements but 
is exempt from the requirement of approval by the Independent Shareholders 
under Rule 14A.66(2) of the Listing Rules.
    As one or more of the applicable percentage ratios (as defined in Rule 
14.07 of the Listing Rules) for the principal amount of loans under the 
Revolving Entrusted Loan Agreement is more than 2.5%, the Revolving Entrusted 
Loan Agreement is subject to the reporting, announcement and Independent 
Shareholders' approval requirements under Chapter 14A of the Listing Rules.  
    The Company will also disclose the relevant details in the next published 
annual report and accounts of the Company in accordance with the relevant 
requirements as set out in Rule 14A.45 of the Listing Rules. A circular 
containing details of the Revolving Entrusted Loan Agreement, a letter from 
the Independent Board Committee of the Company and a letter from the 
independent financial advisor, both advising the terms of the Revolving 
Entrusted Loan Agreement, together with the notice of the EGM, will be 
despatched to the Shareholders as soon as possible in accordance with the 
requirements of the Listing Rules.
    Those Directors who have a material interest in the transaction under the 
Entrusted Loan Agreement (by virtue of being the principal management staff of 
CDC) have abstained from voting at the relevant Board meeting for approval of 
the relevant transaction.

    INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISOR
    An Independent Board Committee comprising the independent non-executive 
Directors will be formed to advise the Independent Shareholders on the terms 
of the Revolving Entrusted Loan Agreement. Each of the members of the 
Independent Board Committee does not have any material interest in the 
Entrusted Loan Agreement.
    The Company will appoint an independent financial advisor to advise the 
Independent Board Committee and the Independent Shareholders on the terms of 
the Revolving Entrusted Loan Agreement.

    DESPATCH OF CIRCULAR
    A circular containing details of the Revolving Entrusted Loan Agreement, a 
letter from the Independent Board Committee of the Company and a letter from 
the independent financial advisor, both advising the terms of the Revolving 
Entrusted Loan Agreement, together with the notice of the EGM will be 
despatched to the Shareholders as soon as possible in accordance with the 
requirements of the Listing Rules.

    INFORMATION RELATING TO THE COMPANY
    The Company is principally engaged in the development and operation of 
power plants, the sale of electricity and thermal power, and the repair, 
testing and maintenance of power equipment and power-related technical 
services, with its main service areas being in the PRC.

    INFORMATION RELATING TO DUOLUN COAL CHEMICAL COMPANY
    Duolun Coal Chemical Company is responsible for constructing and operating 
the Duolun Coal Chemical Project. The Duolun Coal Chemical Project is located 
in Duolun County, Xilinguole League of the Inner Mongolia Autonomous Region. 
The project uses the brown coal as raw materials from the East Unit 2 coal 
mine of Shengli Coal Mine in Inner Mongolia, which is wholly-owned by the 
Company. It produces chemical products with advanced technologies, including 
pulverised coal gasification technology, synthetic gas purification technology, 
large-scale methanol synthesis technology, methanol-to-propylene technology 
and propylene polymerisation technology. This project is expected to produce 
460,000 tonnes of polypropylene per year and other by-products.
    As at 31 December 2009, Duolun Coal Chemical Company's unaudited total 
assets amounted to RMB18.54151 billion; total liabilities amounted to 
RMB14.51595 billion; and asset-liability ratio was 78.29%.

    INFORMATION RELATING TO DATANG FINANCE COMPANY
    Datang Finance Company is duly established in the PRC as a non-banking 
financial institution on 10 May 2005. The registered capital of Datang Finance 
Company is RMB1,000 million. The principal business of Datang Finance Company 
includes the provision of, among others, deposit services, loan services, 
entrusted loan services and entrusted investment services.

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

    "A Share(s)"         the domestic ordinary share(s) of the Company with a
                         nominal value of RMB1.00 each and are listed on the 
                         Shanghai Stock Exchange                             
                                                                         
    "Articles of         the articles of association of the Company      
    Association"                                                         
                                                                         
    "Board"              the board of Directors of the Company           
                                                                         
    "CDC"                China Datang Corporation, a State-owned enterprise
                         established under the laws of the PRC and is a 
                         controlling Shareholder of the Company pursuant to
                         the Listing Rules which owns approximately 35.61% 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                     
                                                                         
                                                                         
    "Datang Finance      China Datang Finance Company Limited            
    Company"                                                             
                                                                         
    "Directors"          the director(s) of the Company                  
                                                                         
    "Duolun Coal         Inner Mongolia Datang International Duolun Coal 
     Chemical Company"   Chemical Company Limited, for the purposes of 
                         Constructing and operating the Duolun Coal Chemical 
                         Project                
                                                                         
    "Duolun Coal         the project is located in Duolun County in the Inner
     Chemical Project"   Mongolia Autonomous Region. The project uses the 
                         brown coal from the East Unit 2 coal mine of Shengli 
                         Coal Mine as raw materials. It produces polypropylene 
                         chemical products with the pulverised coal 
                         gasification technology, the synthetic gas
                         purification technology, large-scale methanol 
                         synthesis technology, the methanol-to-propylene
                         technology and the propylene polymerisation
                         technology. It is the most advanced coal chemical
                         project adopting clean, efficient and high 
                         value-added utilisation of coal. This project 
                         produces 460,000 tonnes of polypropylene per year and
                         other by-products                      
                                                                         
    "EGM"                the extraordinary general meeting of the Company to
                         be held to consider and approve, among others, the 
                         Revolving Entrusted Loan Agreement                
                                                                         
    "Energy and          Datang Energy and Chemical Company Limited, a   
     Chemical Company"   wholly-owned subsidiary of the Company            
                                                                         
    "Entrusted Loans"    the general entrusted loan of a principal amount of
                         RMB300 million and the revolving entrusted loan of a 
                         principal amount of RMB3,000 million             
                                                                         
    "Entrusted Loan      the arrangement where Datang Finance Company is 
    Arrangement"         designated by the Company to act as a lending agent 
                         to, inter alia, release the Entrusted Loans, which 
                         are funded by the Company, to Duolun Coal Chemical 
                         Company and to monitor the use and repayment of the 
                         Entrusted Loans by Duolun Coal Chemical Company 
                         pursuant to the Entrusted Loan Agreement        
                                                                         
    "Entrusted Loan      the General Entrusted Loan Agreement and the    
    Agreement"           Revolving Entrusted Loan Agreement              
                                                                         
    "General Entrusted   the general entrusted loan agreement entered into on
    Loan Agreement"      29 December 2009 by the Company, Datang Finance 
                         Company and Duolun Coal Chemical Company in respect 
                         of the Entrusted Loan Arrangement               
                                                                         
    "Group"              the Company and its subsidiaries              

    "H Share(s)"         the overseas listed foreign shares of the Company 
                         with a nominal value of RMB1.00 each, which are 
                         listed on the Stock Exchange and the London Stock 
                         Exchange                   
                                                                         
    "Hong Kong"          the Hong Kong Special Administrative Region of the
                         PRC                                             
                                                                         
    "Independent         the shareholders other than the connected persons of
    Shareholders"        the Company who have material interest in the 
                         transaction contemplated under the Entrusted Loan 
                         Agreement. CDC and its associates are required to be 
                         abstained from voting in approving the Revolving 
                         Entrusted Loan Agreement at the EGM              
                                                                         
    "Independent Board   the independent board committee of the Company, 
    Committee"           comprising five independent non-executive Directors,
                         and each of them does not have any material interest 
                         in the Entrusted Loan Agreement                  
                                                                         
    "Listing Rules"      the Rules Governing the Listing of Securities on the
                         Stock Exchange                                        
                                                                         
    "London Stock        The London Stock Exchange Limited               
    Exchange"                                                            
                                                                         
    "PRC"                the People's Republic of China                  
                                                                         
    "Revolving           the revolving entrusted loan agreement entered into
     Entrusted           on 12 January 2010 by the Company, Datang Finance 
    Loan Agreement"      Company and Duolun Coal Chemical Company in respect 
                         of the Entrusted Loan Arrangement                                     
                                                                         
    "RMB"                Renminbi, the lawful currency of the PRC        
                                                                         
    "Shareholder(s)"     the holder(s) of the Share(s)                   
                                                                         
    "Shares"             the ordinary shares of the Company with a nominal
                         value of RMB1.00 each, comprising domestic Shares and 
                         H Shares                                          
                                                                         
    "Stock Exchange"     The Stock Exchange of Hong Kong Limited         
                                                                         
    "the East Unit 2     the East Unit 2 coal mine of Shengli Coal Mine, 
    coal mine of         which is constructed and operated by Xilinguole                                       
    Shengli Coal         Mining Company. It produces brown coal. The coal                                    
    Mine"                production capacity of the phase I of the project is 
                         30,000,000 tonnes per year    
                                                                         
    "%"                  percent                                         


    By Order of the Board  
    Zhou Gang     
    Secretary to the Board 

    Beijing, the PRC, 3 February 2010

    As at the date of this announcement, the Directors of the Company are:
Zhai Ruoyu, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia,
Guan Tiangang, Su Tiegang, Ye Yonghui, Li Gengsheng, Xie Songlin*, Liu Chaoan*, 
Yu Changchun*, Xia Qing* and Li Hengyuan*.
    *  Independent non-executive Directors