Connected Transaction

Datang Intl Power Generation Co Ld
06 September 2005


The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no
representation as to its accuracy or completeness and expressly disclaims 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)


                                                 CONNECTED TRANSACTION


JOINT VENTURE AGREEMENT


Pursuant to the Joint Venture Agreement, the Company has agreed to invest in Luangang Company with, among others, Hebei
Investment Company, by way of capital injection for the purpose of constructing and operating the Qiancao Railway
Project. According to the Joint Venture Agreement, the Company and Hebei Investment Company will contribute RMB240
million (approximately HK$233 million) and RMB200 million (approximately HK$194 million) in cash, respectively, to
Luangang Company. The parties to the Joint Venture Agreement have also agreed to change the company name from Luangang
Company to Tanggang Railway Company ('Chinese Characters'). Subject to the terms of the Joint Venture Agreement, the
Company and Hebei Investment Company will own approximately 13.97% and approximately 11.64% equity interest of Tanggang
Railway Company ('Chinese Characters') (Note 1), respectively.



Connected transaction of the Company


As at the date of the Joint Venture Agreement, Hebei Investment Company owns approximately 13.01% of the issued share
capital of the Company, therefore Hebei Investment Company is a connected person of the Company. Accordingly, the Joint
Venture Agreement constitutes a connected transaction for the Company under the Listing Rules. As each of the
percentage ratios (as defined in Rule 14.07 of the Listing Rules) is less than 2.5%, the Joint Venture Agreement is
only subject to the reporting and announcement requirements but exempt from shareholders' approval as set out in
Chapter 14A of the Listing Rules. Relevant details will also be included in the next published annual report and
accounts of the Company in accordance with Rule 14A.45 of the Listing Rules.



JOINT VENTURE AGREEMENT


Date


29 August 2005


Parties


(1) the Company; (2) Hebei Investment Company; (3) Beijing Railway Authority; (4) Tangshan Company; (5) Communications
Company; (6) Caofeidian Company; and (7) China Resources Company



Major terms of the Joint Venture Agreement



Pursuant to the Joint Venture Agreement, the parties therein will use Luangang Company as a vehicle for the
construction and operation of Qiancao Railway Project. The registered capital of Luangang Company will be increased
from approximately RMB159 million (approximately HK$154 million) to approximately RMB1.718 billion (approximately
HK$1.668 billion). Further, the parties to the Joint Venture Agreement agreed to change the name of the company from
Luangang Company to Tanggang Railway Company ('Chinese Characters'). All capital contributions by the parties to the
Joint Venture Agreement will be used for the Qiancao Railway Project. The total investment amount for Qiancao Railway
Project is approximately RMB3.378 billion (approximately HK$3.280 billion), out of which approximately RMB1.718 billion
(approximately HK$1.668 billion) will be contributed by the parties therein as capital contribution in proportion to
their respective equity interest in Tanggang Railway Company ('Chinese Characters') (Note 1), representing 50.90% of
the total investment amount.



As part of the capital contribution by the parties to the Joint Venture Agreement, the Company and Hebei Investment
Company will contribute in total in cash RMB240 million (approximately HK$233 million) and RMB200 million
(approximately HK$194 million), respectively, to Luangang Company. According to the Joint Venture Agreement, the
remaining balance of the total investment amount of approximately RMB1.66 billion (approximately HK$1.61 billion) will
be made up by way of borrowing arrangements by of Tanggang Railway Company ('Chinese Characters') (Note 1). The equity
holders of Tanggang Railway Company ('Chinese Characters') (Note 1) may be required to provide guarantees in proportion
to their respective equity interest in Tanggang Railway Company ('Chinese Characters') (Note 1) in relation to such
borrowing arrangements if so require.



Capital Contribution



Pursuant to the Joint Venture Agreement, as the equity holders of Luangang Company at the date of the Joint Venture
Agreement, Tangshan Company does not have to contribute additional capital to Luangang Company. However, Beijing
Railway Authority will contribute in cash RMB310 million (approximately HK$301 million) as additional capital
contribution to Luangang Company.



Further, pursuant to the Joint Venture Agreement, Communications Company, Caofeidian Company, the Company, Hebei
Investment Company and China Resources Company will contribute in total in cash RMB260 million (approximately HK$252
million), RMB260 million (approximately HK$252 million), RMB240 million (approximately HK$233 million), RMB200 million
(approximately HK$194 million) and RMB100 million (approximately HK$97 million) to Luangang Company as their capital
contributions to Luangang Company, respectively.



All parties to the Joint Venture Agreement shall contribute 20% of their respective cash obligation within 15 days from
the date of the Joint Venture Agreement. The remaining cash obligations of each of the parties to the Joint Venture
Agreement shall be payable as and when required by the board of directors and equity holders of Tanggang Railway
Company ('Chinese Characters') (Note 1), having considered the progress of construction of Qiancao Railway Project.



Condition Precedent



The Company confirms that no further approval is required from any relevant authorities in the PRC in relation to the
construction of Qiancao Railway Project.



Subject to the due performance of the parties to the Joint Venture Agreement in relation to their respective 20% cash
obligation as mentioned above, the Company, Hebei Investment Company, Beijing Railway Authority, Tangshan Company,
Communications Company, Caofeidian Company and China Resources Company will own approximately 13.97%, 11.64%, 19.73%,
18.58%, 15.13%, 15.13% and 5.82% equity interest of Tanggang Railway Company ('Chinese Characters') (Note 1),
respectively. Such ratios are calculated based on their respective capital contributions to the registered capital of
Tanggang Railway Company ('Chinese Characters') (Note 1).



REASONS FOR ENTERING INTO THE JOINT VENTURE AGREEMENT



The parties to the Joint Venture Agreement intend to commence the construction of Qiancao Railway Project, which
involves the construction of railways of approximately 139.55 kilometres in the Tangshan region, Hebei province of the
PRC. The relevant government authorities of the PRC have approved the feasibility study of Qiancao Railway Project.
Qiancao Railway Project involves the construction of four railways; namely (1) railway of approximately 47.35
kilometres connecting Qiananbei ('Chinese Characters') to Lingjiaoshan Railway ('Chinese Characters'); (2) railway of
approximately 46.3 kilometres connecting Luannan ('Chinese Characters') to Caofeidian Railway ('Chinese Characters');
(3) railway of approximately 27.5 kilometres connecting Caofeidian North Station ('Chinese Characters') to Caofeidian
South Station ('Chinese Characters'); and (4) railway of approximately 18.4 kilometres connecting Caofeidian North
Station ('Chinese Characters') to Caofeidian West Station ('Chinese Characters'). The railways of Qiancao Railway
Project are expected to commence operation in 2007. As there is an insatiable demand for coal in the PRC, the
construction of Qiancao Railway Project is apt to benefit from the transportation of coal from the northern part of the
PRC to the southern part of the PRC. The Directors, including the independent non-executive directors, considered that
the entering into the Joint Venture Agreement is in the best interest of the Company as it could secure the timely
supply of coal to various power plants of the Company along the coastal line of the PRC. Further, it will increase the
utilisation rate of cash that the Company currently holds and hence increase the rate of return for the shareholders of
the Company.



The terms of the Joint Venture Agreement were negotiated and arrived at on an arm's length basis. The Directors,
including the independent non-executive Directors, consider that the terms of the Joint Venture Agreement are fair and
reasonable as far as the Company and the Company's shareholders as a whole are concerned.



CONNECTED TRANSACTION



As at the date of the Joint Venture Agreement, Hebei Investment Company owns approximately 13.01% of the issued share
capital of the Company, therefore Hebei Investment Company is a connected person of the Company. Accordingly, the Joint
Venture Agreement constitutes a connected transaction for the Company under the Listing Rules. As each of the
percentage ratios (as defined in Rule 14.07 of the Listing Rules) is less than 2.5%, the Joint Venture Agreement is
only subject to the reporting and announcement requirements but exempt from shareholders' approval as set out in
Chapter 14A of the Listing Rules. Relevant details will also be included in the next published annual report and
accounts of the Company in accordance with Rule 14A.45 of the Listing Rules.



INFORMATION RELATING TO THE COMPANY AND ITS SUBSIDIARIES



The principal business of the Company and its subsidiaries includes the development and operation of power plants, the
sale of electricity and thermal power, and the repair and maintenance of power equipment and power-related technical
services.



INFORMATION RELATING TO HEBEI INVESTMENT COMPANY



The principal business of Hebei Investment Company includes the development of investment businesses, provision of
security and guarantee to enterprises and investing in and management of energy, transportation and communications
projects.



INFORMATION RELATING TO LUANGANG COMPANY



Luangang Company is a limited liability company established in 2001 at Tangshan region, Hebei province of the PRC under
the laws of the PRC. As at the date of the Joint Venture Agreement, Luangang Company was owned as to 91.65% by Tangshan
Company and as to 8.35% by Beijing Railway Authority. Based on the relevant accounting rules and standards applicable
in the PRC, the audited net asset of Luangang Company as at 31 December 2004 was approximately RMB137 million
(approximately HK$133 million). The net profit (before tax) of Luangang Company for the financial year ended 2003 and
2004 were approximately RMB2.88 million (approximately HK$280 million) and approximately RMB12.10 million
(approximately HK$11.75 million), respectively. The net profit (after tax) of Luangang Company for the financial year
ended 2003 and 2004 were approximately RMB1.87 million (approximately HK$1.82 million) and approximately RMB6.86
million (approximately HK$6.66 million), respectively. Luangang Company owns a railway connecting Luanxian ('Chinese
Characters') to Jingtanggang ('Chinese Characters'), Hebei province of the PRC. As of 31 December 2004, the fixed asset
of Luangang Company was approximately RMB145 million (approximately HK$141 million), representing approximately 72.29%
of the total asset of Luangang Company. The account payables for procuring equipment to improve the existing railway
facilities was approximately RMB41 million (approximately HK$39.81 million), representing approximately 65.61% of the
total liabilities of Luangang Company as of 31 December 2004. The principal business of Luangang Company includes
railway transportation and railway transportation services.



INFORMATION RELATING TO BEIJING RAILWAY AUTHORITY



The principal business of Beijing Railway Authority is to operate and manage state-owned railway assets.



INFORMATION RELATING TO CAOFEIDIAN COMPANY



The principal business of Caofeidian Company includes the operation of vessels, ports and railway facilities for
loading/off-loading iron ores; development and construction of the relevant properties nearby ports; loading and
offloading at ports and storage of goods.



INFORMATION RELATING TO CHINA RESOURCES COMPANY



The principal business of China Resources Company is to construct a power plant in Caofeidian.



INFORMATION RELATING TO COMMUNICATIONS COMPANY



The principal business of Communications Company includes the development, operation and management of highway
(including bridges and stations), ports and relevant auxiliary facilities.



INFORMATION RELATING TO TANGSHAN COMPANY



The principal business of Tangshan Company includes the operation of state-owned properties, capital investment of
stated-owned funds, ports, railway facilities, development and construction of relevant properties nearby ports,
loading and offloading at ports and storage of goods.



DEFINITIONS



For the purposes of this announcement, capitalised terms appearing herein shall, unless the context otherwise admits,
have the meanings set out below:


'Beijing Railway Authority'               Beijing Railway Authority ('Chinese Characters'), an Independent Third
                                          Party, a state-owned enterprise established under the laws of the PRC

'Caofeidian Company'                      Tangshan Caofeidian Development Company Limited ('Chinese Characters!), an
                                          Independent Third Party, a state-owned enterprise established under the
                                          laws of the PRC

'China Resources Company'                 China Resources (Tangshan Caofeidian) Company Limited, ('Chinese
                                          Characters'), an Independent Third Party, a wholly-owned subsidiary of
                                          China Resources Power Holdings Company Limited, the H shares of which are
                                          listed on the Stock Exchange

'Communications Company'                  State Development Investment Communications Company ('Chinese Characters'),
                                          an Independent Third Party, a wholly-owned subsidiary of State Development
                                          Investment Corporation ('Chinese Characters'), established under the laws
                                          of the PRC

'Company'                                 Datang International Power Generation Co., Ltd. ('Chinese Characters'), a
                                          sino-foreign joint stock limited company incorporated in the PRC on 13
                                          December 1994, the H shares of which are listed on the Stock Exchange and
                                          the London Stock Exchange

'connected person'                        has the meaning ascribed to it under the Listing Rules

'Directors'                               directors of the Company

'Hebei Investment Company'                Hebei Construction Investment Company ('Chinese Characters'), a state-owned
                                          enterprise established under the laws of the PRC and is a substantial
                                          shareholder of the Company holding approximately 13.01% of the issued share
                                          capital of the Company as at the date of the Joint Venture Agreement

'HK$'                                     Hong Kong dollars, the lawful currency of Hong Kong

'Hong Kong'                               the Hong Kong Special Administrative Region of the PRC

'Independent Third Party'                 party who (i) is not a connected person of the Company and (ii) was
                                          independent of and not connected with the Company and any of the directors,
                                          chief executive and substantial shareholders of the Company or any of its
                                          subsidiaries, or any of their respective associates

'Investors'                               Hebei Investment Company, Beijing Railway Authority, Tangshan Company,
                                          Communications Company, Caofeidian Company and China Resources Company

'Joint Venture Agreement'                 the joint venture agreement dated 29 August 2005 entered into between the
                                          Company and the Investors

'Listing Rules'                           Rules Governing the Listing of Securities on the Stock Exchange of Hong
                                          Kong Limited

'London Stock Exchange'                   The London Stock Exchange Limited

'Luangang Company'                        Tangshan Luangang Railway Company Limited ('Chinese Characters'),
                                          established under the laws of the PRC, was owned as to 91.65% by Tangshan
                                          Company and as to 8.35% by Beijing Railway Authority as at the date of the
                                          Joint Venture Agreement

'PRC'                                     the People's Republic of China

'Qiancao Railway Project'                 the construction of a railway of approximately 139.55 kilometres,
                                          connecting between Qianan ('Chinese Characters') and Caofeidian ('Chinese
                                          Characters'), in the Tangshan region, Hebei province of the PRC

'RMB'                                     Renminbi, the lawful currency of the PRC

'Stock Exchange'                          The Stock Exchange of Hong Kong Limited

'Tangshan Company'                        Tangshan Port Investment Company Limited ('Chinese Characters'), an
                                          Independent Third Party, a state-owned enterprise established under the laws
                                          of the PRC


                                                                                 By order of the Board
                                                    Datang International Power Generation Co., Ltd.
                                                                                         Yang Hongming

                                                                                     Company Secretary

Beijing, the PRC, 5 September 2005


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


Zhai Ruoyu, Zhang Yi, Hu Shengmu, Kou Bingen, Yang Hongming, Liu Haixia, Guan Tiangang, Su Tiegang, Ye Yonghui, Tong
Yunshang, Xie Songlin*,

Xu Daping*, Liu Chaoan*, Yu Changchun* and Xia Qing*


*  independent non-executive Directors

Note 1:        The name of the company will be changed from Luangang Company to Tanggang Railway Company ('Chinese
               Characters') in accordance with the Joint Venture Agreement.



For the purpose of this announcement, HK$1.00 is equivalent to RMB1.03.




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