IFA's Advice on Term of Franchising Contracts

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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

INDEPENDENT FINANCIAL ADVISER'S ADVICE
ON TERM OF THE FRANCHISING CONTRACTS

BACKGROUND

Reference is made to the announcement of Datang International Power Generation Co., Ltd. (the "Company") dated 30 June 2015 (the "Announcement") in relation to, among others, the Franchising Contracts. Capitalised terms used in this announcement shall have the same meanings as defined in the Announcement unless the context required otherwise.

As set out in the Announcement, the franchise period under the Franchising Contracts is the same as the operating period of the power generation facilities at which the franchise projects are located. Since the Desulfurisation Assets or Denitrification Assets are the supporting and ancillary facilities of the coal-fired power generating units, the franchise period of the Desulfurisation Assets or Denitrification Assets are the same as the operating periods of their corresponding power generating facilities. The term of the Franchising Contracts is therefore expected to exceed three years.

Rule 14A.52 of the Listing Rules provides that the period for the agreement must be fixed and reflect normal commercial terms or better. It must not exceed three years except in special circumstances where the nature of the transaction requires a longer period. In this case, the listed issuer must appoint an independent financial adviser to explain why the agreement requires a longer period and to confirm that it is normal business practice for agreements of this type to be of such duration. The Board, accordingly, has appointed Quam Capital Limited ("Quam Capital") as the independent financial adviser to provide advice in relation to the franchise period of the Desulfurisation Assets or Denitrification Assets under the Franchising Contracts.

OPINION OF INDEPENDENT FINANCIAL ADVISER

Quam Capital opines that on the basis that the Desulfurisation Assets or Denitrification Assets are the supporting and ancillary facilities of the coal-fired power generating units, to meet the criteria of environmental protection, the Desulfurisation Assets or Denitrification Assets will operate with the coal-fired power generating units to achieve flue gas desulfurisation or denitrification. As such, it is reasonable that the franchise period of the Desulfurisation Assets or Denitrification Assets is the same as the operating period of their corresponding power generation facilities under the Franchising Contracts.

In addition, Quam Capital has also reviewed a relevant announcement of a Hong Kong Listed company which is engaged in the investment, development, operation and management of power plants and of coal mines in the PRC, and noted that it has also entered into contracts with its connected person in relation to provision of, among other things, services to ensure satisfaction of various national emission standards by the engaged party. The duration of such services is also more than three years.

Having considered the principal factors and reasons described above, Quam Capital considers that the duration of the Franchising Contracts is justifiable and it is normal business practice for contract of this type.

By Order of the Board 
Zhou Gang       
Secretary to the Board

Beijing, the PRC, 9 July 2015

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

Chen Jinhang, Hu Shengmu, Wu Jing, Liang Yongpan, Zhou Gang, Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang, Yang Wenchun,
Dong Heyi*, Ye Yansheng*, Zhao Jie*, Jiang Guohua*, Feng Genfu*

* Independent non-executive directors