CONTINUING CONNECTED TRANSACT

Datang Intl Power Generation Co Ld
29 December 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: 0991)



                        CONTINUING CONNECTED TRANSACTION



Reference is made to the Prospectus disclosing, inter alia, the Ash Disposal
Agreement entered into between the Company and NCPGC in connection with the
disposal of all ash generated by the Company's power plants in accordance with
PRC national and local environmental protection requirements and industrial
policies.



Reference is also made to the Company's announcement dated 24 April 2003 in
relation to the State Council's restructuring of the power generation industry
in the PRC, whereby the Company has been assigned under the control of China
Datang and accordingly shares of the Company originally held by NCPGC, amounting
to approximately 35.43% of the issued share capital of the Company, has been
transferred to China Datang by way of administrative allocation.



On 20 December 2005, the Company and China Datang entered into the Supplemental
Agreement in connection with the Ash Disposal Agreement to amend certain terms
of the Ash Disposal Agreement to render the Ash Disposal Agreement in compliance
with the provisions governing continuing connected transactions under the
revised Listing Rules which became effective on 31 March 2004.



As at the date of the Supplemental Agreement, China Datang owns approximately
35.43% of the issued share capital of the Company and is therefore a substantial
shareholder of the Company under the Listing Rules. As such, China Datang is a
connected person of the Company under Rule 14A.11 of the Listing Rules, and the
Ash Disposal Agreement as amended by the Supplemental Agreement constitute a
continuing connected transaction of the Company. Given that each of the relevant
percentage ratios of the maximum annual value of the services agreed to be
provided by China Datang to the Company under the Ash Disposal Agreement as
amended by the Supplemental Agreement is less than 2.5%, the Ash Disposal
Agreement as amended by the Supplemental Agreement is only subject to the
reporting, annual review and announcement requirements under Rules 14A.37 to
14A.40 and Rules 14A.45 to 14A.47 of the Listing Rules.



THE SUPPLEMENTAL AGREEMENT



Date



20 December 2005



Parties



(i)    the Company; and



(ii)   China Datang. Pursuant to the State Council's restructuring of the power
generation industry in the PRC and an agreement entered into between NCPGC and
China Datang on 15 January 2004, NCPGC transferred the shares of the Company
which it originally held by way of administrative allocation, amounting to
approximately 35.43% of the issued share capital of the Company, and assigned
all its rights and obligations under the Ash Disposal Agreement to China Datang.
As such, China Datang is the counterparty in the Supplemental Agreement.



Term



The Supplemental Agreement provides that the Ash Disposal Agreement is for a
term of 3 years commencing from the date of signing of the Supplemental
Agreement to 19 December 2008, and is renewable subject to negotiation between
the Company and China Datang within 3 months prior to the expiry of the Ash
Disposal Agreement as amended by the Supplemental Agreement. The Company will
ensure its compliance with the Listing Rules in the event that the Ash Disposal
Agreement is renewed pursuant to the terms of the Supplemental Agreement.



The Services



The scope of the services to be provided by China Datang pursuant to the Ash
Disposal Agreement remains unchanged under the Supplemental Agreement. Pursuant
to the terms of the Supplemental Agreement, China Datang will continue to be
responsible for disposing of all ashes generated by the Company's power plants
in accordance with PRC national and local environmental protection requirements
and industrial policies. The Supplemental Agreement will also continue to apply
to all future generating units or power plants that are wholly-owned and
operated and managed by the Company.



Pricing



The mechanism in respect of the determination of the ash disposal charges under
the Ash Disposal Agreement is not affected by the Supplemental Agreement. The
Company and China Datang will continue to agree annually on a pre-determined
unit ash disposal charge, which shall reflect China Datang's estimated operating
costs, depreciation of its ash yards, amortisation fees for the construction of
the ash yard and a profit margin (to be agreed annually by the Company and China
Datang based on arm's length negotiations between the Company and China Datang)
ranging between 5% to 10% of the costs. The ash disposal charges will continue
to be confirmed between the Company and China Datang based on the actual volume
of ashes disposed by China Datang at the pre-determined unit ash disposal charge
on a monthly basis and paid by the Company in cash to China Datang on an annual
basis, and such expenditures will continue to be funded by internal resources of
the Company. The ash disposal charges levied by China Datang under the Ash
Disposal Agreement as amended by the Supplemental Agreement are no less
favourable to the Group than terms available from independent third parties.



Maximum Aggregate Annual Caps



Pursuant to the Supplemental Agreement, the services as contemplated by the Ash
Disposal Agreement are subject to the following maximum aggregate annual caps
(the 'annual caps') for each of the financial years ending 31 December 2007:


For the year ending 31 December 2005                                                                      RMB60,000,000
                                                                            (equivalent to approximately HK$57,692,310)
For the year ending 31 December 2006                                                                      RMB60,000,000
                                                                            (equivalent to approximately HK$57,692,310)
For the year ending 31 December 2007                                                                      RMB60,000,000
                                                                            (equivalent to approximately HK$57,692,310)



The annual caps for the services as contemplated by the Ash Disposal Agreement
have been determined with reference to the previous similar ash disposal
transactions between the Company and China Datang and its predecessor, i.e.
NCPGC, which amounted to approximately RMB57,920,000, RMB57,890,000 and
RMB57,890,000 for each of the years ending 31 December 2002, 2003, and 2004,
respectively.



INFORMATION RELATING TO THE PARTIES TO THE ASH DISPOSAL AGREEMENT AS AMENDED BY
THE SUPPLEMENTAL AGREEMENT



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
present main operation in the PRC.



China Datang is principally engaged in the business of the development,
investment, construction, operation and management of power plants and the
production and sale of electricity and thermal power.



REASONS FOR AND BENEFITS OF THE ASH DISPOSAL AGREEMENT AS AMENDED BY THE
SUPPLEMENTAL AGREEMENT



The Ash Disposal Agreement was entered into before certain amendments to the
Listing Rules became effective on 31 March 2004. It has an indefinite term and
provides that it will terminate only by agreement between the Company and NCPGC
(or as required by law) or automatically upon termination of the Power Purchase
Agreement. The Ash Disposal Agreement also contains specific provisions as to
how the unit ash disposal charge shall be calculated. Details of the Ash
Disposal Agreement were set out in the Prospectus.



Pursuant to the amendments to the Listing Rules which became effective on 31
March 2004, continuing connected transactions became subject to new
requirements, including (i) the period for the agreement in relation to a
continuing connected transaction must be fixed and not exceed 3 years, and (ii)
a maximum aggregate annual value (in terms of monetary value rather than a
percentage of the Company's annual revenue) in respect of each continuing
connected transaction must be set and the basis of which must also be disclosed.



The Supplemental Agreement was entered into between the Company and China Datang
in order to render the Ash Disposal Agreement in compliance with the above
amendments to the Listing Rules. The Supplemental Agreement provides that, inter
alia, the Ash Disposal Agreement is for a term of 3 years (which is renewable
subject to negotiation between the Company and China Datang within 3 months
prior to the expiry of the Ash Disposal Agreement) commencing from the date of
signing of the Supplemental Agreement to 19 December 2008, and that the annual
caps for each of the years ending 31 December 2005, 2006 and 2007 is
RMB60,000,000.



Since the ash yards owned by China Datang are situated in the vicinity of the
power plants owned or managed by the Company, it would be practical and cost
efficient for the Company to continue to engage China Datang to use its ash
yards and render the ash-disposing services to the Company's power plants. As
such, the Directors (including the independent non-executive directors of the
Company) are of the view that the terms of the Supplemental Agreement are fair
and reasonable and in the interests of the Company and its shareholders as a
whole.



CONTINUING CONNECTED TRANSACTION



As at the date of the Supplemental Agreement, China Datang owns approximately
35.43% of the issued share capital of the Company and is therefore a substantial
shareholder of the Company under the Listing Rules. As such, China Datang is a
connected person of the Company under Rule 14A.11 of the Listing Rules, and the
Ash Disposal Agreement as amended by the Supplemental Agreement constitute a
continuing connected transaction of the Company. Given that each of the relevant
percentage ratios of the maximum annual value of the services agreed to be
provided by China Datang to the Company under the Ash Disposal Agreement as
amended by the Supplemental Agreement is less than 2.5%, the Ash Disposal
Agreement as amended by the Supplemental Agreement is only subject to the
reporting, annual review and announcement requirements under Rules 14A.37 to
14A.40 and Rules 14A.45 to 14A.47 of the Listing Rules.



DEFINITIONS



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


'Ash Disposal Agreement'           the agreement entered into between the Company and NCPGC on 5 August 1996 in
                                   relation to the disposal by China Datang of all ashes generated by the Company's
                                   power plants in accordance with PRC national and local environmental protection
                                   requirements and industrial policies
'Board'                            the board of Directors
'China Datang'                     China Datang Corporation (Chinese Characters), a state-owned enterprise established
                                   under the laws of the PRC and is a substantial shareholder of the Company holding
                                   approximately 35.43% of the issued share capital of the Company
'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 are listed on the Stock Exchange and the London Stock Exchange
'Continuing connected transaction' has the meaning ascribed to it in the Listing Rules
'Director(s)'                      the director(s) of the Company
''Group'                           the Company and its subsidiaries
'H Shares'                         the overseas listed foreign shares of the Company with a nominal value of RMB1.00
                                   each and are listed on the Stock Exchange and the London Stock Exchange
'HK$'                              Hong Kong dollar(s), the lawful currency of Hong Kong
'Hong Kong'                        the Hong Kong Special Administrative Region of the PRC
'Listing Rules'                    Rules Governing the Listing of Securities on the Stock Exchange
'London Stock Exchange'            The London Stock Exchange Limited
'NCPGC'                            (Chinese Characters) (North China Power Group Company), now changed its name to
                                   (Chinese Characters) (North China Grid Company Limited), is a State-owned enterprise
                                   established in 1993 and currently managed by the State Grid Corporation, which is in
                                   turn managed by the central government
'Power Purchase Agreement'         the agreement entered into between the Company and NCPGC on 5 August 1996 in
                                   relation to the purchase of power
'PRC'                              the People's Republic of China
'Prospectus'                       the prospectus in relation to the new issue and placing of 1,244,060,000 H Shares of
                                   the Company dated 10 March 1997
'RMB'                              Renminbi, the lawful currency of the PRC
'Stock Exchange'                   The Stock Exchange of Hong Kong Limited
'Supplemental Agreement'           the supplemental agreement entered into between the Company and China Datang on 20
                                   December 2005 in relation to the Ash Disposal Agreement
'%'                                per cent.



                             By Order of the Board

                                 Yang Hongming

                               Company Secretary



Beijing, the PRC, 23 December 2005



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



Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, 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



For the purpose of this announcement, HK$1.00 is equivalent to RMB1.04.


                      This information is provided by RNS
            The company news service from the London Stock Exchange    

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