Re Agreement

Beijing Datang Power Generation Com
15 June 2001


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.


BEIJING DATANG POWER GENERATION COMPANY LIMITED

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


CONNECTED TRANSACTION


Pursuant to an investment agreement for the Phase II Expansion Project of
Gansu Province Liancheng Power Plant made amongst Beijing Datang Power
Generation Company Limited (the ''Company''), Gansu Province Power Company and
Gansu Province Power Construction Investment and Development Company, the
parties to such agreement agreed to invest 55%, 25% and 20%, respectively in
the registered capital of a company to be established with the name of Gansu
Datang Liancheng Power Generation Company Limited for the purpose of jointly
developing and operating the Phase II Expansion Project of Gansu Province
Liancheng Power Plant.

The above transaction between the Company and Gansu Province Power Company
constitutes a connected transaction for the Company under Chapter 14 of the
Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong
Limited (''Listing Rules''). The above transaction will be subject to the
approval of the shareholders at a Shareholders' General Meeting. An
Extraordinary General Meeting of the Company will be held on 14 August 2001 to
consider the above investment.



INTRODUCTION

On 28 May 2001, the Company entered into an investment agreement for the Phase
II Expansion Project of Gansu Province Liancheng Power Plant (''Investment
Agreement'') with Gansu Province Power Company (''Gansu Power'') and Gansu
Province Power Construction Investment and Development Company (''Gansu
Investment'').



Pursuant to the Investment Agreement, the Company, Gansu Power and Gansu
Investment agreed to invest 55%, 25% and 20%, respectively in the registered
capital of a company to be established with the name of Gansu Datang Liancheng
Power Generation Company Limited (''Liancheng Power Generation Co'') for the
purpose of jointly developing and operating the Phase II Expansion Project of
Gansu Province Liancheng Power Plant (''Liancheng Power Plant'').



As North China Power Group Company (''NCPGC'') holds shares in the Company
representing approximately 35.43% of the total registered share capital of the
Company, according to the Listing Rules, NCPGC is a controlling shareholder of
the Company. Both NCPGC and Gansu Power are wholly-owned subsidiaries of the
State Power Company (''State Power''). Therefore, the transaction between the
Company and Gansu Power constitutes a connected transaction for the Company
pursuant to Chapter 14 of the Listing Rules.



THE INVESTMENT

Pursuant to the Investment Agreement, the registered capital of Liancheng
Power Generation Co will amount to approximately RMB480 million. The
registered capital will be contributed in cash by the Company, Gansu Power and
Gansu Investment as to 55%, 25% and 20%, respectively. Accordingly, the
Company will contribute approximately RMB264 million in total to the
registered capital of Liancheng Power Generation Co. Such amount will be
funded from the Company's internal financial resources. The detailed timing
and manner of such capital contribution by each of the parties to the
agreement will be set out in the Articles of Association of Liancheng Power
Generation Co.



The total investment of Liancheng Power Generation Co is approximately
RMB2,400 million (subject to the approval of the relevant PRC authorities). It
is proposed that the balance of the total investment other than the registered
capital will be funded internally by Liancheng Power Generation Co. The
parties to the agreement have agreed, subject to the specific funding
requirements of Liancheng Power Generation Co, to severally provide guarantees
for the funding of the project according to their investment ratios. Save for
its contribution to the registered capital of Liancheng Power Generation Co
and its obligation to provide guarantees for the funding of the project
according to its investment ratio as referred to above, the Company is not
obliged to provide any other funding to Liancheng Power Generation Co.



The Phase II Expansion Project of Liancheng Power Plant will be established in
central Gansu Province, Liancheng, adjacent to Gansu Yaojie Mining Bureau. Two
300 MW coal-fired power generation units will be installed. The project is
expected to begin construction at the end of 2001 and the two coal-fired power
generation units are expected to start operation in 2004 and 2005,
respectively. The project proposal of the Phase II Expansion Project of
Liancheng Power Plant has been approved by the State Development and Planning
Commission.



It is proposed that Liancheng Power Generation Co will be established in
Liancheng, Gansu Province. Liancheng Power Generation Co will be a company
with limited liability, and the proposed operation term will be 20 years
(excluding project construction period).



The electric power produced by Liancheng Power Generation Co will be
transmitted to the power grid of Gansu Province. The electric power on the
grid will be purchased and sold in accordance with the relevant PRC
regulations, and a power purchase contract to be made between Liancheng Power
Generation Co and Gansu Power. Based on the information currently available to
the Company, the signing of the power purchase contract between Liancheng
Power Generation Co and Gansu Power will constitute a connected transaction
for the Company. The Company will comply with the relevant disclosure and/or
approval requirements of the Listing Rules at the time of the signing of such
contract. Liancheng Power Generation Co will produce and operate according to
the State regulations regarding grid management, and a grid connection and
management agreement to be made between Liancheng Power Generation Co and
Gansu Power.



REASONS FOR THE INVESTMENT

The principal business of the Company is to develop, construct, own and
operate power plants. The investment in the Phase II Expansion Project of
Liancheng Power Plant will increase the installed capacity of the Company,
strengthen its asset base, enlarge its profit margin, increase shareholders
return and realise its development plan to expand into China's western
regions.



In 1999, the Chinese government announced its policy to develop western China.
The government has decided to construct electric power grids, step up the
developments of its power resources in western China which includes Gansu
Province. After satisfying the local power demand, the government plans to
transmit the electric power to the developed coastal region of eastern China.



Gansu Province's aluminium, iron alloy industries and other heavy industries
are densely located in the Liancheng area. This region maintains a high power
demand which is expected to increase rapidly in the near future as output
rises. To date, Liancheng Aluminium Factory, Baiyin Aluminium Factory and
Lanzhou Aluminium Factory surrounding Liancheng Power Plant have undergone
technological innovations and undertaken expansion projects, which are
expected to start operation in 2003. As power is the main energy for the
industrial production, it is estimated that the power demand in this area will
be increased by about 530,000 KW accordingly. Hence, the construction of the
Phase II Expansion Project of Liancheng Power Plant will not only satisfy the
power demand in the Liancheng area, but will also enhance the stability of the
power supply of the Gansu power grid to high load areas.



Liancheng Power Plant will be located near the mines and may utilise coal from
the neighbouring Gansu Yaojie Mining Bureau. The stable coal supply and the
short transportation distance will help lower Liancheng Power Plant fuel cost.



GENERAL

The transaction constitutes a connected transaction for the Company. According
to the Listing Rules, it must be approved by the independent shareholders who
have no interest in the transaction. Any connected person interested in the
transaction shall abstain from voting at the meeting. In this respect, NCPGC
has confirmed that it will not exercise its voting rights. An Extraordinary
General Meeting of the Company will be held on Tuesday, 14 August 2001 to
consider and approve the transaction between the Company and Gansu Power.



The Company will appoint an Independent Board Committee to provide an opinion
in respect of the investment for the independent shareholders. The Company
will also appoint an independent financial adviser to the Independent Board
Committee to provide an opinion on the investment for the Independent Board
Committee.



A Circular containing the details of the investment, opinion to the
Independent Board Committee from the independent financial adviser and opinion
of the Independent Board Committee will be despatched to the shareholders at
the earliest convenience.





                                                         By order of the Board

                               Beijing Datang Power Generation Company Limited

                                                                 Yang Hongming

Company Secretary

Beijing, 15 June 2001