ContinuingConnectTransaction

Datang Intl Power Generation Co Ld
11 May 2007


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)



                                           CONTINUING CONNECTED TRANSACTIONS



Financial Services Agreement



The Board announces that on 10 May 2007, the Company and Datang Finance entered into the Financial Services Agreement,
pursuant to which Datang Finance has agreed to provide the Group with deposit services, loan services and other
financial services subject to the terms and conditions provided therein.



Continuing Connected Transactions



CDGC is the substantial shareholder of the Company. As at the date hereof, CDGC holds approximately 33.99% of the
issued share capital of the Company. Datang Finance is a subsidiary of CDGC, and is therefore a connected person of the
Company. Accordingly, the Financial Services Agreement and the transactions contemplated thereunder constitute
continuing connected transactions of the Company under the Listing Rules.



As each of the percentage ratio(s) (as defined in Rule 14.07 of the Listing Rules) applicable to the deposit services
is less than 2.5%, the deposit services to be provided by Datang Finance to the Group is subject to the reporting and
announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules but exempt from the independent
shareholders' approval requirement under Rule 14A.66 of the Listing Rules.



The loan services (including, but not limited to, the credit facilities) provided by Datang Finance to the Group would
amount to financial assistance by a connected person for the benefit of the Group, which are on normal commercial terms
similar or even more favourable than those offered from independent third parties for comparable services in the PRC,
and which is exempt under Rule 14A.65(4) of the Listing Rules from all reporting, announcement and independent
shareholders' approval requirements since no security over the assets of the Group granted in respect of the loan.



In respect of other financial services to be provided by Datang Finance to the Group, each of the percentage ratio(s)
is below the de minimis threshold set out in Rule 14A.33 of the Listing Rules, therefore the provision of other
financial services by Datang Finance to the Group is exempt from the reporting, announcement and independent
shareholders' approval requirements of the Listing Rules.



In compliance with the relevant requirements of the Shanghai Stock Exchange, the matter on the execution of the
Financial Services Agreement shall be presented at the annual general meeting of the Company for the year 2006 for
consideration and approval. CDGC and its associates shall abstain from voting at the general meeting.



FINANCIAL SERVICES AGREEMENT



Date



10 May 2007



Parties


(i)      the Company; and
(ii)     Datang Finance



Major Terms


1.     the services to be provided by Datang Finance to the Group include conducting financial and financing
       consultation, credit certification and other relevant advice and agency services; assistance in the receipt and
       payment of transaction proceeds; approved insurance agency services; provision of security; entrusted loans and
       entrusted investment services; bill acceptance and discount services; intra-group transfer and settlement
       services and planning of settlement scheme; deposit services; financial services for the members of the Group
       such as loans and finance leasing.
2.     Datang Finance has agreed to provide financial services other than those in 1 above to the Group at its request
       provided that Datang Finance has obtained the relevant approval from the CBRC.


3.     Datang Finance has undertaken to adhere to the principles below in providing the aforementioned financial
       services to the Group:




(1)    the interest rate for the Group's deposits with Datang Finance shall be fixed as the deposit interest rate as
       announced by the PBOC from time to time;
(2)    the interest rate for loans granted to the Group by Datang Finance shall be the base lending rate as announced
       by the PBOC from time to time less 10% of such rate; and
(3)    the fees charged by Datang Finance for the provision of financial services other than deposits and loans
       services shall not be higher than the rate charged by the other financial institutions for the same type of
       services.


4.    the Group, with the benefit of the information of the market rate and in view of its own interests, has
      rights to determine whether to maintain the business relationship with Datang Finance or not. The Group
      may obtain financial services from other financial institutions in addition to those provided by Datang
      Finance pursuant to the Financial Services Agreement.
5.    Datang Finance should ensure the stable operation of fund management system to safeguard the fund, and to
      monitor the credit risk so as to and satisfy the payments needs of the Group.
6.    For the year 2007, Datang Finance has granted the integrated credit facilities of
      RMB3.0 billion to the Group. In this regard, Datang Finance will not conduct any individual examination
      procedure for each case of use and withdrawal of the facilities by the Group within the limit of the
      integrated credit facilities, and will directly complete procedures for such uses and withdrawals.
7.    During the term of the Financial Services Agreement, the upper limit of the average daily deposit per
      annum (including any interest accrued therefrom) for the Group's deposits with Datang Finance is RMB1.3
      billion.
8.    The term of the agreement shall be the entire year when the agreement is executed, i.e. from 1 January
      2007 to 31 December 2007.



Since the deposit services under the Financial Services Agreement have not commenced as at the date of this
announcement, the balance of the deposit services under the Financial Services Agreement did not exceed the de minimus
threshold for the period from 1 January 2007 up to the date of this announcement.



Capital Risk Control Measures


1.     Datang Finance ensures the safe and stable operation of fund management information system, which has undergone
       the security test in respect of its connection to the online commercial banking and has reached the national
       security standards for commercial banks. The system is equipped with the mode awarded with CA safety certificate
       to secure the fund of the Group.
2.     Datang Finance is in strict compliance with the risk monitoring indicators for financial institutions issued by
       the CBRC and its major monitoring indicators such as gearing ratio and liquidity ratio have also complied with
       the requirement by the CBRC.

3.     Any balance in the Group's deposits (after deducting the amount used for making entrusted loans and the amount
       of loans given to the Group by Datang Finance) will be redeposited into one or more commercial banks in the PRC.
       Datang Finance enjoys favourable inter-bank deposit rates (at 1.62% currently, subject to changes as published
       by the PBOC from time to time), which is higher than interest rates of deposit held at call (at 0.72% currently)
       which the Group is able to obtain from other PRC commercial banks.
4.     A report on the status of the Group's deposits will be delivered by Datang Finance to the chief financial
       officer of the Company before 10 a.m. each business day.
5.     A copy of every regulatory report submitted by Datang Finance to the CBRC will be provided to and reviewed by
       the senior management of the Company, including the relevant executive director(s).
6.     The financial statements of Datang Finance for each month will be provided to and reviewed by the senior
       management of the Company, including the relevant executive director(s), on the fifth working day of the
       following month.



BENEFITS OF ENTERING INTO THE FINANCIAL SERVICES AGREEMENT


1.     The rates on loans and deposits offered by Datang Finance to the Group will be equal to or more favourable than
       those offered by commercial banks in the PRC.
2.     Datang Finance is regulated by the PBOC and the CBRC and provides its services in accordance with and in
       satisfaction of the rules and operational requirements of these regulatory authorities. In addition, capital
       risks are reduced through the introduction of risk control measures to be included in the Financial Services
       Agreement.
3.     The Group is expected to benefit from Datang Finance's thorough understanding of the operations of the Group
       which should render more expedient and efficient services than other PRC commercial banks.
4.     Datang Finance is a non-banking financial institution regulated by PBOC and CBRC and is entitled to interbank
       interest rates for commercial banks in the PRC. The Company is one of the substantial shareholders of Datang
       Finance and accordingly, the Company will benefit from Datang Finance's profits.
5.     Pursuant to the relevant regulations of the PBOC, the China Securities Regulatory Commission and the CBRC, the
       customers of Datang Finance are limited to entities within CDGC and its subsidiaries, thereby reducing the risks
       that Datang Finance may otherwise be exposed to if its customers include other entities unrelated to CDGC.



PROPOSED CAPS FOR FINANCIAL SERVICES AND RATIONALE



Deposit Services: the Company estimates that the average daily deposit balance (including the interest accrued
therefrom) with Datang Finance for the year of 2007 will not exceed RMB1.3 billion, after taking into account of (1)
part of the remaining balance of approximately RMB2.079 billion, represents the net proceeds of RMB3.279 billion raised
from the issuance of A shares of the Company in December 2006 less RMB1.2 billion already used by the end of 2006,
which will be gradually applied to projects as stated in the A share prospectus of the Company based on the progress of
construction project for the year 2007-2008; and (2) the working capital of the Company's subsidiaries or controlling
entities. The Directors (including independent non-executive Directors) consider that the above proposed cap is fair
and reasonable.



The Company confirms that there is no historical cap, nor maximum outstanding balance for the deposit services. The
deposit services is subject to the annual review requirement under the Listing Rules.



Loan Services: In view of the loan services (including, but not limited to, the credit facilities) provided by Datang
Finance to the Group are on normal commercial terms similar or even more favourable than those offered from independent
third parties for comparable services in the PRC and for the benefit of the Group, and no security over the assets of
the Group granted in respect of the loan, no cap has been set for such services.



Other Services: Other services include all other financial services besides deposit and loan services which may be
provided by Datang Finance to the Company, including mainly, entrusted loans, i.e. the Company may entrust Datang
Finance to provide entrusted loans to other enterprises. The Company will comply with the applicable reporting,
announcement and independent shareholders' approval requirements of the Listing Rules if such other enterprises are
connected persons (as defined in the Listing Rules) of the Company. The Company confirms that there will not be any
provision of financial assistance by the Company to Datang Finance under this arrangement. The Company expects that
percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the total fees payable by the Company to Datang
Finance will fall within the de minimis threshold as stipulated under Rule 14A.33 of the Listing Rules.



The Company will comply with the reporting, announcement and independent shareholders' approval requirements of the
Listing Rules if the transaction amount of other financial services under the Financial Services Agreement would exceed
the relevant threshold.



CONTINUING CONNECTED TRANSACTIONS



CDGC is the substantial shareholder of the Company. As at the date hereof, CDGC holds approximately 33.99% of the
issued share capital of the Company. Datang Finance is a subsidiary of CDGC, and is therefore a connected person of the
Company. Accordingly, the Financial Services Agreement and the transactions contemplated thereunder constitute
continuing connected transactions of the Company under the Listing Rules.



As each of the percentage ratio(s) (as defined in Rule 14.07 of the Listing Rules) applicable to the deposit services
is less than 2.5%, the deposit services to be provided by Datang Finance to the Group is subject to the reporting and
announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules but exempt from the independent
shareholders' approval requirement under Rule 14A.66 of the Listing Rules.



The loan services (including, but not limited to, the credit facilities) provided by Datang Finance to the Group would
amount to financial assistance by a connected person for the benefit of the Group, which are on normal commercial terms
similar or even more favourable than those offered from independent third parties for comparable services in the PRC,
and which is exempt under Rule 14A.65(4) of the Listing Rules from all reporting, announcement and independent
shareholders' approval requirements since no security over the assets of the Group granted in respect of the loan.



In respect of other financial services to be provided by Datang Finance to the Group, each of the percentage ratio(s)
is below the de minimis threshold set out in Rule 14A.33 of the Listing Rules, therefore the provision of other
financial services by Datang Finance to the Group is exempt from the reporting, announcement and independent
shareholders' approval requirements of the Listing Rules.



INFORMATION ON DATANG FINANCE



Datang Finance has been duly established in the PRC as a non-bank financial institution on 10 May 2005. The registered
capital of Datang Finance is RMB500 million, of which RMB262.50 million, RMB100 million and RMB137.5 million were
contributed by CDGC, the Company and other 11 subsidiaries of the CDGC respectively, representing 52.5%, 20%, and 25%,
respectively, of the registered capital of Datang Finance. The principal business of Datang Finance includes the
provision of, among others, deposit services, loan services, entrusted loan services and entrusted investment services.



Datang Finance is currently regarded as an associated company in the accounts of the Company.



INFORMATION RELATING TO THE GROUP



The principal business of the Group includes the development and operation of power plants, the sale of heat and
electricity, and the repair and maintenance of power equipment and power-related technical services.



SHAREHOLDERS' APPROVAL



In compliance with the relevant requirements of the Shanghai Stock Exchange, the matter on the execution of the
Financial Services Agreement shall be presented at the annual general meeting of the Company for the year 2006 for
consideration and approval. CDGC and its associates shall abstain from voting at the general meeting.



DEFINITIONS



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


'associates'                                shall have the meaning as defined in the Listing Rules;
'Board'                                     the board of Directors;
'CBRC'                                      (Chinese Word)(China Banking Regulatory Commission);
'CDGC'                                      China Datang Corporation (Chinese Word), a state-owned enterprise
                                            established under the laws of the PRC and is a substantial shareholder of
                                            the Company holding approximately 33.99% of the issued share capital of the
                                            Company;
'Company'                                   Datang International Power Generation Co., Ltd. (Chinese Word), 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 Limited and the A Shares are listed on the
                                            Shanghai Stock Exchange;
'connected person'                          shall have the meaning as defined in the Listing Rules;
'Datang Finance'                            China Datang Finance Co. Ltd. (Chinese Word);
'Directors'                                 the directors of the Company;
'Financial Services Agreement'              a financial services agreement entered into between Datang   Finance and
                                            the Company on 10 May 2007;
'Group'                                     the Company and its subsidiaries;
'Listing Rules'                             The Rules Governing the Listing of Securities on the Stock Exchange;
'PBOC'                                      People's Bank of China(Chinese Word) ;
'PRC'                                       the People's Republic of China;
'RMB'                                       Renminbi, the lawful currency of the PRC;
'Shanghai Stock Exchange'                   Shanghai Stock Exchange;
'Stock Exchange'                            The Stock Exchange of Hong Kong Limited;
'%'                                         percentage.


                                                                                          By Order of the Board
                                                                                                  Yang Hongming
                                                                                         Secretary to the Board



Beijing, the PRC, 10 May 2007



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




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