Document:

EX-10.26

Exhibit 10.26

     Contract Number: 2009A06

POWER PURCHASE AND SALE CONTRACT

POWER SELLER: SICHUAN HUABANG HYDROELECTRIC DEVELOPMENT CO., LTD.

POWER PURCHASER: SICHUAN CANGXI ELECTRIC POWER CO., LTD.

Signing Place: Sichuan Cangxi Electric Power Co., Ltd.

Signing Date: May 16, 2009

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Power Purchase and Sale Contract

This Power Purchase and Sale Contract (the “Contract”) is entered into by and between the two
parties set forth below:

	Power Purchaser:  	 	Sichuan Cangxi Electric Power Co., Ltd., a
power supply enterprise, registered with the
Administration for Industry and Commerce of
Cangxi County.

Tax Registration Number: 510824206100402

Legal Address: No.15, Renmin West Road, Lingjiang Town, Cangxi County

Legal Representative:Yang Sheng Hua
	 
	Power Seller:  	 	Sichuan Huabang Hydroelectric Development Co., Ltd., a power
generation enterprise with the legal person status registered with the
Administration for Industry and Commerce of Sichuan Province.

Tax registration number: 510824660270321

Legal Address: Jin Xia Yi Yuan, Binjiang Road, Cangxi County

Legal Representative: John Kuhns.

The information regarding the contact and address and account opening bank provided by both Parties
to this Contract are as follows:

	 	 	 	 	 
	Name of the Power Purchaser:

	 	Sichuan Cangxi Electric Power Co., Ltd.

	Telephone Number:

	 	5222084
	Facsimile:

	 	5222084
	Zip Code:

	 	628400
	Mail Address:

	 	No.15 of Renmin West Road, Lingjiang Town,
Cangxi County

	Name for the Account Opening:

	 	Sichuan Cangxi Electric Power Co., Ltd.

	Account Opening Bank:

	 	Agricultural Bank of China, Cangxi County
Renmin Zhonglu Sub-branch

	Account Number:

	 	286701040000315
	 
	Name of the Power Purchaser:

	 	Sichuan Huabang Hydroelectric Development
Co., Ltd.

	Telephone Number:

	 	5285466
	Facsimile:

	 	5285468
	Zip Code:

	 	628400
	Mail Address:

	 	Jin Xia Yi Yuan, Binjiang Road, Cangxi County

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	Name for the Account Opening:

	 	Sichuan Huabang Hydroelectric Development
Co., Ltd.

	Account Opening Bank:

	 	Agricultural Bank of China, Cangxi Sub-branch

	Account Number:

	 	286101040003320

WHEREAS:

	1	 	The Power Seller owns, operates and manages the Cangxi Liyuantan Hydropower Station over the
Donghe River, the branch river of Jialingjiang River, which is located at Renhe Village,
Zhongtu Township, Cangxi County, Sichuan Province, with a total installed capacity of 12MW
(the “Power Plant”);
	 
	2	 	The Power Plant has been connected to the grid operated and managed by the Power Purchaser.

After friendly consultations and on the principles of equality, willingness and good faith, the
Power Purchaser and the Power Seller have entered into this Contract in accordance with the
Contract Law of the People’s Republic of China, the Power Law of the People’s Republic of China,
the Administration Regulations on the Dispatching of Power Grid and other national laws and
regulations.

CHAPTER I DEFINITION AND INTERPRETATION

	1.1	 	Unless otherwise required by the context, the terms used in this Contract shall have the
meanings set forth as follows:

	 	1.1.1	 	“Power Plant” refers to the power generation facilities and all its auxiliary facilities
extending to the property demarcation point over the Donghe River, the branch river of
Jialingjiang River, which is owned and operated and managed by the Power Seller and located
in Renhe Village, Zhongtu Township, Cangxi County, Sichuan Province, with a total installed
capacity of 12 MW (six generator units, respectively referring to No.1, No.2, No.3, No.4,
No.5 and No.6, each with the capacity of 2 MW).
	 
	 	1.1.2	 	“Actual Annual Grid-connected Power Output” refers to the annual power output
transmitted to the Power Purchaser by the Power Seller at the Metering Point, and the
metering unit for the power output shall be kwh.
	 
	 	1.1.3	 	“The Power Purchaser’s Reason” refers to the requirement and liability of the Power
Purchaser, including the liability for the enlargement of the
accidents, which

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	 	 	 	 shall be assumed by the Power Purchaser, due to the non-implementation of the relevant national
regulations and standards and etc. by the Power Purchaser.
	 
	 	1.1.4	 	“The Power Seller’s Reason” refers to the requirement and liability of the Power Seller,
including the liability for the enlargement of the accidents, which shall be undertaken by
the Power Seller, due to the non-implementation of the relevant national regulations and
standards and etc. by the Power Seller.
	 
	 	1.1.5	 	“Grid-connection Point” refers to the electric connection point connecting the Power
Plant owned and operated by the Power Seller and the grid managed by the Power Purchaser.
	 
	 	1.1.6	 	“Metering Point” refers to the point indicated in Appendix II, which is for the
installation of the power output metering devices. Generally, the Metering Point is
installed on the property demarcation point of the Power Purchaser and Power Seller; in the
event that the power output metering devices could not be installed on the property
demarcation point, the installation location shall be selected through consultations between
the Power Purchaser and Power Seller.
	 
	 	1.1.7	 	“Emergency” refers to the accidents occurred to the grid or material accidents to the
power generation and supply facilities, such as frequency or voltage of grid over the
regulated scope, the loading of the transmission and transformation equipment over the
regulated value, the power of the main line over the regulated stability limitation and
other operation conditions that could threaten the safety and stability of the grid
operation, lead to a break-down of the grid and a large area power-cut, etc.
	 
	 	1.1.8	 	“Force Majeure” refers to any objective circumstance which cannot be foreseen, avoided
and overcome, including volcano eruption, tornado, snowstorm, mudslide, landslide, flood,
fire, the input water volume below the designed standard, and earthquake, typhoon, thunder
and lightening, fog flash, icing flashover and ice coating, etc., which exceed the designed
standards, and nuclear radiation, war, plague, riot, etc.

	1.2	 	Interpretation

	 	1.2.1	 	The Appendices hereto shall have the same legal effect as the text of this Contract.
	 
	 	1.2.2	 	This Contract shall be binding on the legal successor or assignee of any Party to this
Contact, unless otherwise agreed by the Power Purchaser and Power Seller. In case of the
occurrence of the circumstance provided in this Article, relevant obligator shall fulfill
the requisite notification obligation and complete procedures required by laws and
regulations.

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	 	1.2.3	 	References to “Date”, “Month” and “Year”, unless otherwise required by the context,
shall be considered as the Date, Month and Year in Gregorian calendar.
	 
	 	1.2.4	 	References to “include (including)” shall mean “include without limitation”.

CHAPTER II REPRESENTATION OF BOTH PARTIES

Any Party to this Contract hereby represents to the other Party that:

	2.1	 	It is an enterprise duly established and validly existing, and has the full right to execute
and the ability to perform this Contract.
	 
	2.2	 	It has legally and effectively completed all requisite procedures for the execution and
performance of this Contact (including the procurement of requisite governmental approvals,
business license and power business operation permit, and etc.).
	 
	2.3	 	Upon the execution of this Contract, no judgment, award, ruling or specific administrative
act has been produced by any court, arbitration institute, administrative authority or
regulatory authority that is sufficient to have any material adverse effect on the performance
of this Contract by any Party.
	 
	2.4	 	It has taken all necessary corporate action to authorize the execution of this Contract, and
the signing person for this Contact shall be its legal representative or authorized
representative. This Contract shall be binding on it upon it comes into effect.

CHAPTER III OBLIGATIONS OF BOTH PARTIES

	3.1	 	The obligations of the Power Purchaser shall include:

	 	3.1.1	 	To purchase the power energy from the Power Seller in accordance with the provisions set
forth in this Contract.
	 
	 	3.1.2	 	To abide by the grid-connection and dispatching agreement entered into by and between
the Power Purchaser and the Power Seller, to operate and maintain the relevant
transformation and transmission facilities in accordance with the national and industry
standards, and to ensure a safe, high quality and economic operation of the power system.
	 
	 	3.1.3	 	To carry out the power dispatching and information disclosure on the principle of
publicity, justice and fairness in accordance with the relevant national regulations, and to
provide the information regarding the electricity load, reserve capacity, the operation
status of the transformation and transmission facilities and etc. for the

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	 	 	 	implementation of this Contract.
	 
	 	3.1.4	 	To supply the Power Seller with the power needed for the restart of the power
generator units in accordance with relevant national regulations or agreements entered
into by and between the Power Seller and the Power Purchaser.

	3.2	 	The obligations of the Power Seller shall include:

	 	3.2.1	 	To supply the Power Purchaser with the power energy in compliance with the national and
industry standards according to the provisions hereof.
	 
	 	3.2.2	 	To abide by the grid-connection and dispatching agreement entered into by and between
the Power Purchaser and the Power Seller, and the unified power dispatching, to operate and
maintain the Power Plant in accordance with the national and industry standards, and
dispatching rules and regulations to ensure the safe operation of the power generator units,
reach the requirements of the technical standards and regulations issued by the relevant
departments of the State and maintain the safe, high quality and economy operation of the
power system.
	 
	 	3.2.3	 	Not to supply the power to the end user directly or sell the power to other grids
without the approval from the Power Purchaser.

CHAPTER IV PURCHASE AND SALE OF THE POWER

	4.1	 	The daily on-grid loading curve shall be released by Cangxi Power Dispatching Center in light
of the system loading condition. The power station owned by the Power Seller shall be operated
in strict accordance with the released active loading voltage curve.
	 
	4.2	 	The on-grid power output of the Power Seller shall be checked by the Power Purchaser each
day, and the electricity fees shall be settled by the power sales department on a monthly
basis.
	 
	4.3	 	The on-grid power output supplied by the Power Seller, which is not in compliance with the
relevant provisions stipulated in this Contract and the Grid-connection and Dispatching
Agreement attached as the Appendix to this Contract, shall be considered as the un-qualified
power output.
	 
	4.4	 	Allowance of the Deviation for the Actual Generated Power
	 
	 	 	During any period of time, the allowed deviation range between the actual generated power of
the Power Plant and the power determined according to the planned daily power generation
dispatching curve (including the temporarily adjusted curve) released by the power dispatching
agency shall be from -2% to 2%.

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CHAPTER V ON-GRID TARIFF

	5.1	 	On-grid Tariff during the Business Operation Period

	 	5.1.1	 	The on-grid tariff during the business operation period of the power generator units of
the Power Plant owned by the Power Seller shall be measured and calculated by the Power
Seller in accordance with the relevant national regulations, and carried out after the
procurement of the approvals of the competent governmental authority in charge of the
examination and approval of tariff.

CHAPTER VI POWER METERING

	6.1	 	Grid-connection Point
	 
	 	 	The Grid-connection Point between the Power Seller, namely, Sichuan Huabang Hydroelectric
Development Co., Ltd., and the Power Purchaser is located at the T connection point of 544
Lingjiao Line of 110KV Lingjiang Substation.
	 
	 	 	The temporary property demarcation point is located at the T connection point of 544 Lingjiao
Line of 110KV Lingjiang Substation, the maintenance work of which shall be undertaken by the
Power Seller and Power Purchaser in accordance with the temporary property demarcation point.
The ownership of the equipments installed across the property demarcation point by the Power
Seller or the Power Purchaser shall belong to the Party who installs equipments.
	 
	6.2	 	Metering Point
	 
	 	 	The Metering Point for the metering of the on-grid power output of the Power Seller and power
output supplied by the Power Purchaser to the Power Seller shall be located at the following
points (please refer to the Appendix hereto for detailed information):

	 	(1)	 	The Metering Point for the on-grid power output of the Power Seller, namely,
Sichuan Huabang Hydroelectric Development Co., Ltd., will be installed at the T
connection point of the 544 Lingjiao Line of 110KV Lingjiang Substation of the Power
Purchaser; in addition, two sets of metering devices with the no-load voltage ratio of
the potential transformer being 110/0.1 and no-load voltage ratio of the current
transformer being 150/5 and 75/5 respectively, will be installed at the above-mentioned
points.

	6.3	 	Power output metering devices and relevant facilities

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	 	6.3.1	 	The Power output metering devices shall include kilowatt-hour meter, potential
transformer for metering usage, current transformer and secondary circuit, and power energy
metering box/tank, etc.
	 
	 	6.3.2	 	Power output metering devices shall be allocated in accordance with the Technical
Administrative Code of Electric Energy Metering (DL/T 448-2000). Neither auxiliary
connection point for disconnecting switch nor voltage compensation appliance in any form
shall be installed or connected in the secondary circuit of potential transformer.
	 
	 	6.3.3	 	Static multifunctional kilowatt-hour meter, the technical performance of which is in
compliance with the requirement of the Alternating Current Static Watt-hour Meters for
Active Energy(Class 0.2S and 0.5S) (GB/T 17883-1999) and the Multifunctional Electricity
Meters (DL/T 614-1997), will be adopted. The kilowatt-hour meter shall have the function of
voltage and current recording and storage, shall be equipped with standard communication
interface, and available for the data local communication and remote transmission (or
through the power energy remote terminal).
	 
	 	 	 	The technical performance and management status of the electricity power metering
devices, which has already been adopted and used, shall be recognized technically by the
electricity energy metering inspection and testing agency recognized by the State
metering administration authority and confirmed by the Power Seller and the Power
Purchaser. As for those aspects which fail to satisfy the requirements, both Parties
shall reach an agreement through consultation to provide the time limit for accomplishing
the transformation.
	 
	 	6.3.4	 	Electricity energy meter, capable of metering the on-grid power output and the power
output supplied by the Power Purchaser to the Power Seller respectively, which shall fulfill
the requirements of Article 6.3.3 hereof, shall be installed at the Metering Point metering
both the on-grid power output and power output supplied by the Power Purchaser to the Power
Seller.
	 
	 	6.3.5	 	Electricity energy metering devices shall be inspected and affixed with a seal or seal
stamp or other seal measures by the electricity energy metering inspection and testing
agency recognized by the State metering administration authority and confirmed by the Power
Seller and the Power Purchaser. Neither Party shall unseal, alter the electricity energy
metering devices and its interconnected lines or replace the components of the metering
devices without consent of the other Party. In case of any technical transformation required
by any Party to this Contract, the transformation plan shall only be implemented upon the
consent from the counterparty and with the presence of both Parties to this Contract; and
the transformation project shall not be put into usage until the completion acceptance has
been completed.

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	6.4	 	The Power Seller shall be responsible for the purchase, installation, commissioning, daily
management and maintenance of the electric energy metering devices.
	 
	6.5	 	The verification and check of the electric energy metering devices

	 	6.5.1	 	The defect investigation and periodic verification and check of the electric energy
metering devices shall be implemented by the electric energy metering inspection and testing
agency recognized by the State metering administration authority and confirmed by the Power
Seller and the Power Purchaser, with the presence of both the Power Purchaser and Power
Seller; in addition, any costs and expenditures incurred shall be borne by the owner of the
electric energy metering devices.
	 
	 	6.5.2	 	Any Party to this Contract is entitled to require the verification and check, or testing
of the electric energy metering devices other than the periodic verification and check at
any time, which shall be implemented by the electric energy metering inspection and testing
agency recognized by the State metering administration authority and confirmed by the Power
Seller and the Power Purchaser. In the event that, after the verification and check, or
testing, the deviation is considered to be out of the regulated range, the costs and
expenditures incurred shall be borne by the owner of such electricity energy metering
devices; in the event that the deviation is considered to be within the regulated range, the
costs and expenditure incurred shall be borne by the Party requiring such verification and
check.

	6.6	 	Resolution for metering abnormality
	 
	 	 	In the event that any party to this Contract notices the abnormality or fault of the electric
energy metering devices, which affect the metering of the power output, it shall immediately
notify the other Party and the electric energy metering inspection and testing agency confirmed
by the Power Seller and the Power Purchaser in order to jointly investigate the defect and make
such electric energy metering devices restore its normal operation as soon as possible.
	 
	 	 	Under normal conditions, the settlement for the power output will mainly rely on the data of
master meter located on the trade settlement point; in case of abnormal conditions, on the
basis of adequate consultation between both Parties, the power output during the period of
abnormal conditions shall be determined in light of the information indicated by the voltage
and current data in storage.

CHAPTER VII POWER OUTPUT CALCULATION

	7.1	 	The on-grid power output and the power output supplied by the Power Purchaser to the Power
Seller shall be settled on a monthly basis in order to realize the goal of

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	 	 	accounting by day,
settlement by month and clearance at the end of the year. The power output shall be calculated
in accordance with the power output recorded at 8:00 on the 21st day of each month
which has already been confirmed by both Parties.
	 
	7.2	 	Reading and Recording of the Data for Power Output Settlement

	 	7.2.1	 	Under normal conditions, the accounts shall be settled in accordance with the power
output data recorded by the meter located on the Metering Point by the Parties to this
Contract.

	7.3	 	Power Output Calculation

	 	7.3.1	 	On-grid Power Output
	 
	 	 	 	On-grid power output shall be the accumulated amount of the total power output (reverse
Lingjiang Line +forward Chengjiao Line—forward Lingjiang Line) copied from the Metering
Point in accordance with Article 6.2 herein, which has been supplied by the power
generator units of the Power Plant to the Power Purchaser.
	 
	 	 	 	Any wear and tear of the interconnecting transformer of the Power Plant due to the
penetration power of the Power Purchaser shall be borne by the Power Purchaser.
	 
	 	7.3.2	 	Power Output Supplied by the Power Purchaser to the Power Seller
	 
	 	 	 	Power output supplied by the Power Purchaser to the Power Seller means the power output
supplied by the Power Purchaser to the Power Seller during the startup and testing period
of the Power Plant or the complete outage of the power generator units due to the Power
Seller’s reasons, which shall be the accumulated account of the reverse power output
through the 35KV Line of Set-up Substation of Liyuantan Station.

	7.4	 	The on-grid power output and power output supplied by the Power Purchaser to the Power Seller
shall be respectively settled in light of their corresponding power tariff, which shall not be
offset.

CHAPTER VIII SETTLEMENT AND PAYMENT OF ELECTRICITY FEES

	8.1	 	Calculation of Electricity Fees

	 	8.1.1	 	The electricity fees shall be settled in Renminbi.
	 
	 	8.1.2	 	The electricity fees for the on-grid power output shall be calculated according to the

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	 	 	 	formula set forth below:
	 
	 	 	 	Electricity fees = Accumulated Purchased Power Output X the Corresponding On-grid Tariff (including tax)

	8.2	 	Settlement of Electricity Fees

	 	8.2.1	 	After the meter reading carried out by the Parties to this Contract in accordance with
Article 7.2 hereof, the grid dispatching department shall provide the daily check report to
the power marketing department for further check, accurately calculate the on-grid power
output and electricity fees according to the check result, fill out the Power Output
Settlement Statement and Electricity Fees Settlement Statement and settle the electricity
fees.

	8.3	 	The Payment of the Electricity Fees for the Power Output Supplied by the Power Purchaser to
the Power Seller
	 
	 	 	Before the promulgation of relevant national regulations, the electricity fees for the power
output supplied by the Power Purchaser to the Power Plant which is calculated in light of
Article 7.3.2 hereof, shall be calculated in accordance with the average power sale tariff of
the grid enterprise, the payment of which shall be made by the Power Plant within the
subsequent month.
	 
	8.4	 	Form of Payment
	 
	 	 	Any amount payable by any Party to this Contract (“Paying Party”) to the other Party to this
Contract (“Receiving Party”) in accordance with this Contract shall be directly remitted to the
bank account of the Receiving Party as provided in this Contract. In case of any receipt of the
written notice for the alteration of account opening bank or the bank account of the Receiving
Party, the Paying Party shall remit the amount payable to the altered bank account.
	 
	 	 	The bank account indicated in the Special Invoice for Value-added Tax issued by the Receiving
Party shall be the same as the bank account provided in this Contract or the altered account by
written notice.
	 
	8.5	 	Materials and Records
	 
	 	 	The Parties to this Contract agree to keep the original materials and records respectively so
as to facilitate the reasonable checking of the statements and records or the examination of
the accuracy of calculations in accordance with this Contract.

CHAPTER IX LIABILITY FOR BREACH OF CONTRACT

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	9.1	 	Any breach of the terms and conditions of this Contract shall be considered as the breach of
this Contract, the non-defaulting party shall be entitled to require the defaulting party to
compensate its economic losses arising from the breach of contract.
	 
	9.2	 	Besides the provisions stipulated in other chapters hereof, the liabilities for beach of
contract which shall be assumed by the Power Purchaser shall also include:
	 
	9.3	 	The loss of the power generator units or equipments of the Power Plant owned by the Power
Seller due to the Power Purchaser’s Reason shall be borne by the Power Purchaser.
	 
	9.4	 	Besides the provisions stipulated in other chapters hereof, the liabilities for breach of
contract which shall be borne by the Power Seller shall also include:
	 
	9.5	 	The loss incurred by the Power Purchaser, the customer of the power supplied by the Power
Purchaser or other persons due to the reasons of the power generator units, other equipments
or facilities of the Power Plant owned by the Power Seller, shall be borne by the Power
Seller.
	 
	9.6	 	In the event that the Power Seller supplies its generated power directly to the customers,
which breaches the regulations of Article 3.2.3 hereof, such power supply shall be considered
as the breach of contract. In the event that the Power Seller takes the power for the office
usage outside the plant area, employee life and other non-power-generation business, etc.
without any consent as the power used for the power generation operation, this kind of action,
which shall be deemed as the breach of contract, shall be rectified immediately; the
electricity fees for the power supply produced before the completion of the rectification work
shall be calculated on the basis of the nature of the power customers confirmed in accordance
with the Regulation on Supply and Utilization of Electricity and the corresponding power
tariff, which shall be deducted from the electricity fees payable by the Power Purchaser to
the Power Seller; in addition, the on-grid plan of the peak time contract for the period,
during which the generated power is directly supplied to the customers by the Power Seller,
shall be deducted by the equivalent power output. In the event that the Power Seller fails to
correct its breach and continues its defaults, the Power Purchaser shall resend to the Power
Seller the notice concerning the rectification within the prescribed time as the warning; and
if the Power Seller still fails to rectify its breach, the Power Purchaser is entitled to
disconnect the Power Seller from its grid, all the consequences and losses of which shall be
borne by the Power Seller. In addition, the Power Purchaser is entitled to refuse the payment
of the on-grid electricity fees to the Power Seller before the completion of the compensation
of the losses caused by the Power Seller.
	 
	9.7	 	The change of the electric lines connection, the movement, alteration and operation of the
purchase and sale metering devices, grid-connection equipments and other

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	 	 	equipments, which has been agreed to be dispatched, used and managed by the Power Seller or the Power Purchaser,
shall be deemed as the material breach of contract; in case of any over calculation caused by
the aforesaid breaches, besides the return of the balance of the electricity fees, the
liquidated damages in the amount equivalent to three (3) times of such
balance shall be paid by the Power Seller. In the event that the defaulting period could not
be identified, 180 days shall be considered as the basis for the calculation of the balance of
the power output and electricity fees. In case of any other loss incurred by the Power
Purchaser, such loss shall be borne by the Power Seller.
	 
	9.8	 	In the event of a breach committed by any Party to this Contract, the non-defaulting Party
may notify the defaulting Party to cease the breach and serve a written notice regarding the
breach correction and payment of liquidated damages set out in this Contract as soon as
possible to the defaulting Party. The defaulting Party shall take measures to correct its
breach immediately, confirm the breach in accordance with this Contract and make payment of
the liquidated damages or compensate the non-defaulting Party.
	 
	9.9	 	Before the expiration date stipulated in this Contract, in case of any express representation
or implication indicated through actions taken by any Party to this Contract for the
non-performance of this Contract, the other Party to this Contract is entitled to require such
Party to assume relevant liabilities for breach of contract.

CHAPTER X EFFECTIVENESS AND TERM

	10.1	 	This Contract, which is deemed as the main contract between the Power Purchaser and the Power
Seller with the Grid Connection and Dispatching Agreement as the collateral contract, shall be
deemed to be concluded upon the signing of the legal representatives or authorized
representative and being affixed with their respective official stamps of the Parties to this
Contract, and become effective upon the date of effectiveness stipulated in this Contract.
	 
	10.2	 	The valid term of this Contract shall be from May 16, 2009 to May 17, 2010. Upon the
expiration date of this Contract, this Contract may be performed continuously and effectively
provided that there is no objection from the Parties to this Contract.
	 
	10.3	 	Within one (1) month before the expiration of this Contract, the Parties to this Contract
shall consult with each other in relation to the extension of this Contract.

CHAPTER XI APPLICABLE LAW

	11.1	 	The formation, validity, interpretation, performance and dispute resolution of this Contract
shall be governed by the laws of PRC.

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CHAPTER XII AMENDMENT, TRANSFER AND TERMINATION OF THIS CONTRACT

	12.1	 	Any modification, amendment or supplement to this Contract shall be conducted in written
form.
	 
	12.2	 	The Power Purchaser and Power Seller expressly represent that, without the written consent
from the other Party, neither of them has the right to transfer or assign all or part of its
rights or obligation as stipulated in this Contract to any third party.
	 
	12.3	 	During the valid term of this Contract, the Parties to this Contract agree to adjust and
amend this Contract accordingly if any of the following events occurs:

	 	(1)	 	Any changes to the relevant national laws, regulations, rules and polices;
	 
	 	(2)	 	The promulgation and implementation of relevant rules, measures and regulations,
etc. by the State power regulatory authority.

	12.4	 	Termination of this Contract
	 
	 	 	If any of the following events occurs to any Party to this Contract, the other Party is
entitled to terminate this Contract thirty (30) days after the service of the termination
notice:

	 	(1)	 	If any Party to this Contract goes bankrupt or liquidated, or the business
license or the power business permit of any Party to this Contract or the Power Plant is
revoked;
	 
	 	(2)	 	If any Party to this Contract is merged with the other Party, or all or majority
of the assets of any Party to this Contract are transferred to another entity, which
cannot assume all obligations of the transferring Party stipulated in this Contract;
	 
	 	(3)	 	If the Grid Connection and Dispatching Agreement entered into between and by the
Parties to this Contract is terminated.

CHAPTER XIII DISPUTE RESOLUTION

	13.1	 	All disputes arising from the performance of this Contact and in connection with this
Contract may be resolved through friendly consultation or mediation by the power regulatory
authority. In the event that no settlement can be reached through friendly consultation or
mediation, any Party to this Contract may submit the dispute to the

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	 	 	people’s court.

CHAPTER XIV MISCELLANEOUS

	14.1	 	Appendix to this Contract
	 
	 	 	Appendix II: Diagram for the Main Wiring and Metering Points of the Power Plant
	 
	 	 	The Appendix to this Contract shall constitute the integral part of this Contract, which has
the same effect as this Contract.
	 
	14.2	 	Text
	 
	 	 	The Contract comprises nine (9) pages, and is executed in four (4) counterparts, and each Party
to this Contract holds two (2) counterparts.
	 
	14.3	 	The Power Purchaser and the Power Seller have reached the understanding for Article 8.2
hereof as below:
	 
	 	 	Considering the irregular market and economy order in the current period, the Power Seller
understands and agrees that the electricity fees provided in this Contract shall be paid by the
Power Purchaser in accordance with the ratio equivalent to the recovery rate of the electricity
fees for the sold power of the Power Purchaser.

15

 

The Power Seller: Sichuan Cangxi Electric Power Co., Ltd.

               (stamp)

Legal Representative (or Authorized Representative):

Contact Person: Li Min

Signing Date: May 16, 2009

Signing Place:

The Seller: Sichuan Huabang Hydroelectric Development Co., Ltd.

               (stamp)

Legal Representative (or Authorized Representative):

Contact Person:

Signing Date: May 16, 2009

Signing Place:

16

 

Appendix: Power Supply Circuit and Property Rights Demarcation Diagram

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GRID CONNECTION AND DISPATCHING AGREEMENT

PARTY A: Sichuan Cangxi Electric Power Co., Ltd.

PARTY B: Sichuan Huabang Hydroelectric Development Co., Ltd.

SIGNING PLACE: Sichuan Cangxi Electric Power Co., Ltd.

SINGING TIME: May 17, 2009

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CONTENT

	 	 	 	 	 	 	 
	CHAPTER I
	 	DEFINITION AND INTERPREATION	 	 	5	 
	CHAPTER II
	 	REPRESENTATION	 	 	9	 
	CHAPTER III
	 	OBLIGATIONS	 	 	10	 
	CHAPTER IV
	 	CONDITIONS FOR GRID CONNECTION	 	 	13	 
	CHAPTER VI
	 	POWER GENERATION PLAN	 	 	19	 
	CHAPTER VII
	 	EQUIPMENT OVERHAUL	 	 	20	 
	CHAPTER VIII
	 	RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES	 	 	24	 
	CHAPTER IX
	 	DISPATCHING AUTOMATIZATION	 	 	28	 
	CHAPTER X
	 	DISPATCHING COMMUNICATION	 	 	30	 
	CHAPTER XI
	 	ACCIDENT SETTLEMENT AND INVESTIGATION	 	 	32	 
	CHAPTER XII
	 	FORCE MAJEURE	 	 	34	 
	CHAPTER XIII
	 	LIABILITY FOR BREACH OF AGREEMENT	 	 	36	 
	CHAPTER XIV
	 	EFFECTIVENESS AND TERM	 	 	41	 
	CHAPTER XV
	 	ALTERATION, TRANSFER AND TERMINATION OF THIS AGREEMENT	 	 	41	 
	CHAPTER XVI
	 	DISPUTES SETTLEMENT	 	 	42	 
	CHAPTER XVII
	 	GOVERNING LAWS	 	 	43	 
	CHAPTER XVIII
	 	MISCELLANEOUS	 	 	43	 
	SPECIFICATION CLAUSES	 	 	47	 
	APPENDIX I
	 	DIAGRAM FOR THE GRID CONNECTION POINTS	 	 	50	 
	APPENDIX II
	 	THE TECHNICAL PARAMETERS OF THE POWER STATION	 	 	51	 
	APPENDIX III
	 	THE DISPATCHING DIVISION OF THE POWER STATION’S EQUIPMENT	 	 	54	 

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(Agreement Number: 2009001)

GRID CONNECTION AND DISPATCHING AGREEMENT

This Grid Connection and Dispatching Agreement (this “Agreement”) is entered into by and between
the two parties set forth below:

	Party A:  	 	Sichuan Cangxi Electric Power Co., Ltd., a grid operation enterprise, which is
registered with the Administration for Industry and Commerce of Cangxi County, Guangyuan
City, Sichuan Province, with the tax registration number of 510824206100402 and
legal address at No.13, Renmin West Road, Lingjiang Town, Cangxi County, whose legal
representative is Zhang Rong An;
	 
	Party B:  	 	Sichuan Huabang Hydroelectric Development Co., Ltd., a power generation
enterprise with legal person status, which is registered with the Administration for Industry
and Commerce of Sichuan Province, having obtained the power business permit for the
power generation of the hydropower station referred hereof (with the permit number of
1052508-00613 ), which is issued by the State Electricity Regulatory Commission,
with the tax registration number of 51082466027032-1 and legal address at Jin Xia
Yi Yuan, Binjiang Road, Cangxi County, whose legal representative
is John • Kuhns.

WHEREAS:

	(1)	 	Party A operates and manages the power grid available for the operation of the power station,
and agrees the grid-connection operation of the power station owned by Party B in accordance
with the stipulations of this Agreement;

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	(2)	 	Party B owns, operates and manages the Cangxi Liyuan Hydropower Station (the “Power Station”)
over the Donghe River, the branch river of Jialingjiang River, which is located at Renhe
Village, Zhongtu Township, Cangxi County, Sichuan Province, with a total installed capacity of
12MW, and agrees to connect the Power Station to the grid owned by Party A in accordance with
the stipulations of this Agreement.

In order to ensure the safety, high quality and economic operation of the electric power system,
regulate the dispatching and on-grid operations, and protect the lawful rights and interests of the
two parties to this Agreement (hereinafter collectively referred to as “both Parties” as well as
individually as “Party”), on the principle of equality, willingness and good faith, both Parties
hereto have entered into this Agreement through consultations in accordance with the Electric Power
Law of the People’s Republic of China, the Contract Law of the People’s Republic of China, the
Administration Regulations on the Dispatching of Power Grids and other relevant laws and
regulations of the People’s Republic of China.

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CHAPTER I DEFINITIONS AND INTERPREATIONS

	1.1	 	Unless otherwise required by the context, the following terms used in this Agreement shall
have the meanings set forth as follows:

	 	1.1.1	 	“Power Dispatching Agency” refers to the power dispatching center of Sichuan Cangxi
Electric Power Co., Ltd., an agency for the organization, direction, guidance and
coordination of the power system operation in accordance with law, which is affiliated to
Party A;
	 
	 	1.1.2	 	“Power Station” refers to the power generation facilities and all its auxiliary
facilities stretching to the property demarcation point in the Donghe River, the branch
river of Jialingjiang River, which is owned and operated and managed by Party B and located
at Renhe Village, Zhongtu Township, Cangxi County, Sichuan Province, with a total
installed capacity of 12 MW (six (6) generator units have been installed, which are
No.1 generator unit with the capacity of 2 MW, No.2 with the capacity of 2
MW, No.3 with the capacity of 2 MW, No.4 with the capacity of 2 MW, No.5
with the capacity of 2 MW and No.6 with the capacity of 2 MW, please refer
to Appendix II for technical parameters of such generator units).
	 
	 	1.1.3	 	“Grid-connection Point” refers to the interconnection points between the Power Station
and the power grid (please refer to Appendix I).
	 
	 	1.1.4	 	“Initial Grid Connection Date” refers to the first day for the synchronous connection of
the Power Station (generator units) and the grid.
	 
	 	1.1.5	 	“Application Letter for Grid Connection” refers to the written application documents
submitted by Party B to Party A for the grid-connection of its Power Station (generator
units).

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	 	1.1.6	 	“Grid-connection Form” refers to one systematic connection form between the Power
Station (generator units) and the power grid.
	 
	 	1.1.7	 	“AGC” refers to Automatic Generation Control.
	 
	 	1.1.8	 	“AVC” refers to Automatic Voltage Control.
	 
	 	1.1.9	 	“RTU” refers to Remote Terminal Unit.
	 
	 	1.1.10	 	“Disconnection” insofar as this Agreement is concerned, specially refers to the electric
interruption of the connection between the power grid and the generation equipments which
are interconnected to the power grid for operation.
	 
	 	1.1.11	 	“Special Operation Mode” refers to the operation arrangement for the abnormal line
connection mode of the Power Station or the power grid, which is different from the normal
line connection mode, as a result of certain demand.
	 
	 	1.1.12	 	“Unit Available Capacity” refers to the output of the generator units after the
modification as required by the restrictions of the equipment conditions from time to time.
	 
	 	1.1.13	 	“Planned Outage” refers to the status of the units of Power Station during the planned
overhaul and reserve periods, including the general overhaul, the maintenance, the planned
overhaul for general service system, and the holiday repairing, the elimination of defects
during off-break period, the shutdown reserve, and etc. which are required by the Power
Dispatching Agency.
	 
	 	1.1.14	 	“Unplanned Outage” refers to the unavailable status of the units of the Power Station
other than Planned Outage. Based on the outage urgency, the Unplanned Outage can be
classified into five categories: (1) immediate outage; (2) the outage

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	 	 	 	which could be delayed for a short while but the units must exit within six hours; (3)
the outage which could be postponed over six hours but the units must exit within
seventy-two hours; (4) the outage which could be deferred over seventy-two hours but the
units must exit before the next Planned Outage; and (5) the prolonged outage which is
beyond the period of the Planned Outage.
	 
	 	1.1.15	 	“Forced Operation Outage” refers to the unplanned operation outage listed out as
categories (1), (2) and (3) described in Article 1.1.14 hereof.
	 
	 	1.1.16	 	“Equivalent Derated Output Outage Hours” refers to the outage hours calculated in
accordance with the maximum output on the nameplate, which are converted from the derated
output hours.
	 
	 	1.1.17	 	“Equivalent Unplanned Outage Hours” refers to the sum of the hours for the Unplanned
Outage and equivalent hours for unplanned derated output.
	 
	 	1.1.18	 	“Annual Allowable Planned Outage Hours” refers to the allowable Planned Outage hours for
any given year determined by both Parties in accordance with the classification of the same
class generator unit model connected to the same grid, on the basis of the recommendations
from the equipment manufacturer and the operation conditions of the on-grid generator units,
which could be divided into the Annual Allowable Planned Outage Hours for general overhaul
year and the Annual Allowable Planned Outage Hours for the year without general overhaul.
	 
	 	1.1.19	 	“Annual Allowable Equivalent Unplanned Outage Hours” refers to the equivalent allowable
Unplanned Outage hours for any given year determined by both Parties in accordance with the
classification of the same generator unit model connected to the same grid, on the basis of
the recommendations from the equipment manufacturer and the operation conditions of the
on-grid generator units, which can be divided into the Annual Allowable Equivalent Unplanned
Outage

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	 	 	 	Hours for general overhaul year and the Annual Allowable Equivalent Unplanned Outage Hours for the
year without general overhaul. The Unplanned Outage herein refers to the Unplanned Outage
due to Party B’s Reason.
	 
	 	1.1.20	 	“Daily Power Generation Dispatching Plan Curve” refers to the curve formulated by the
Power Dispatching Agency per day to determine the power generation output of every time
period for the next day.
	 
	 	1.1.21	 	“Emergencies” refers to the material accidents occurred to the power generation or supply
facilities within the power system, including the conditions the grid frequency or voltage
being over the prescribed limit, the loading of the transmission and transformation
facilities being over the regulated value, the power value of the main lines being over the
specified stable limit, and other operation situations that may threaten the safe operation
of the power grid, and cause the breakdown of the power system to the extent of a large area
power-cut.
	 
	 	1.1.22	 	“Dispatching Regulation of Power System” refers to the regulations to regulate the
dispatching and operation of the power system in the local area, which is formulated in
accordance with the Administration Regulations on the Dispatching of Power Grids, national
and power industry standards.
	 
	 	1.1.23	 	“Party A’s Reason” refers to Party A’s requirement or liabilities that may be attributed
to Party A, including the liabilities for enlargement of accidents, which shall be assumed
by Party A , due to the non-implementation of the relevant national regulations and
standards and etc. by Party A.
	 
	 	1.1.24	 	“Party B’s Reason” refers to Party B’s requirement or liabilities that may be attributed
to Party B, including the liabilities for enlargement of accidents, which shall be assumed
by Party B, due to the non-implementation of the relevant national regulations and standards
and etc. by Party B.

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	 	1.1.25	 	“Power Purchase and Sale Contract” refers to the contract entered into by and between
Party A and Party B for the purchase and sale of the power generated by the Power Station,
and other relevant business issues.
	 
	 	1.1.26	 	“Force Majeure” refers to any objective circumstances which cannot be foreseen, avoided
and overcome, including volcanic explosion, tornado, snowstorm, mudslide, landslide, flood,
fire, the inflow water quantity below the designed quantity, and earthquake, typhoon,
lightning, fog-flash, icing flashover and ice coating, etc. with an intensity over the
designed standard,, and nuclear radiation, war, plague, riot, etc.

	1.2	 	Interpretation

	 	1.2.1	 	All headings hereof are only for the convenience of reading and shall not affect the
interpretations of this Agreement in any way.
	 
	 	1.2.2	 	The Appendices hereto shall have the same legal effect as the text of this Agreement.
	 
	 	1.2.3	 	Unless otherwise agreed by both Parties, this Agreement shall be binding on the lawful
successors or assignees of any Party.
	 
	 	1.2.4	 	Unless otherwise required by the context, the year, month and day mentioned in this
Agreement shall be the year, month and day in Gregorian calendar.
	 
	 	1.2.5	 	The word “include” herein shall mean “include without limitation”.
	 
	 	1.2.6	 	All numbers and durations mentioned in this Agreement shall include the given numbers.

CHAPTER II REPRESENTATIONS OF BOTH PARTIES

Each Party hereby represents to the other Party that:

	2.1	 	It is an enterprise duly established and validly and legally in existence in accordance

9

 

	 	 	with law, which has the full right to execute and the ability to perform this Agreement.
	 
	2.2	 	All procedures required for the execution and performance of this Agreement (including the
procurement of the requisite governmental approvals, business license and power business
permit, etc.) have been legally and validly accomplished.
	 
	2.3	 	Upon the execution of this Agreement, no judgment, verdict, award or specific administrative
act has been issued or conducted by any courts, arbitration institutes, administrative
authorities or other regulatory bodies that is sufficient to have material adverse effect on
its performance of this Agreement.
	 
	2.4	 	All internal authorization procedures required for executing this Agreement have been
accomplished and this Agreement is signed by its legal representative or authorized
representative. This Agreement shall be binding on both Parties after it comes into effect.

CHAPTER III OBLIGATIONS OF BOTH PARTIES

	3.1	 	Party A’s obligations shall include:

	 	3.1.1	 	To abide by the national laws and regulations, national and power industry standards;
and to carry out the unified dispatching of the Power Station (please refer to Appendix III
for the detailed information of the dispatching range) in accordance with the technical
specializations of the Power Station and regulations and rules of the power system, on the
principle of publicity, fairness and justice, for the purpose of the safe, high quality and
economic operation of the power system.
	 
	 	3.1.2	 	To be responsible for the operation management, overhaul maintenance and technological
improvement of the relevant equipments and facilities of the grid under its dispatching
control to satisfy the requirements of the normal operation of the Power Station.

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	 	3.1.3	 	To formulate and provide to Party B on schedule the monthly power generation plan, the
daily generation dispatching plan curve and the reactive output curve (or voltage curve) in
accordance with the provisions of the Power Purchase and Sale Contract and the actual
conditions of the power grid operation, on the basis of the proposed power output
dispatching and control purpose released by relevant department.
	 
	 	3.1.4	 	To reasonably arrange the equipment overhaul of the Power Station.
	 
	 	3.1.5	 	To support and cooperate with Party B for the technological improvement and parameters
adjustment for certain equipments; to direct and coordinate the dispatching and operation
management in connection with the grid carried out by Party B; to conduct direction and
coordination to the electric equipment, relay protection and automatic safety devices,
excitation system (including PSS), AGC and governor system, electricity metering system,
power dispatching communication, dispatching automatization and other relevant specification
and business during the operation of Party B, which are related to the safe operation of the
power grid.
	 
	 	3.1.6	 	To disclose immediately to Party B the information in relation to the defects of grid
material equipments relating to Party B, and the power transmission capacity relating to the
Power Station, and to disclose periodically to Party B the power dispatching information
relating to Party B.
	 
	 	3.1.7	 	To amend the corresponding regulations and rules in time in accordance with the
requisite procedures on the basis of the requirements of the power system operation and the
specializations of the equipments owned by Party B.
	 
	 	3.1.8	 	To take measures to prevent the occurrence of the accidents affecting the safe

11

 

	 	 	 	operation of the power system; to carry out various specialized and professional safety examinations
and inspections for the grid safety periodically, and formulate
counter-accident measures as required. Upon the authorization of power regulatory
authority, the Power Dispatching Agency shall formulate, organize and carry out the
unified grid and Power Station counter-accident rehearsal scheme.
	 
	 	3.1.9	 	To cooperate with Party B for accident investigation.

	3.2	 	Party B’s obligations include:

	 	3.2.1	 	To abide by the national laws and regulations, national and power industry standards,
and regulations and rules of the power system to which Party B is connected; and to obey the
unified dispatching of the Power Dispatching Agency and organize the Power Station’s
production reasonably, for the purpose of safe, high quality and economic operation of the
power system.
	 
	 	3.2.2	 	To organize the real-time production and operation of the Power Station in accordance
with the dispatching directions released by the Power Dispatching Agency, and participate in
the cycling loading, frequency modulation, voltage regulation and reserve operation of the
power system.
	 
	 	3.2.3	 	To provide the overhaul plan recommendation for the Power Station equipments as required
by Power Dispatching Agency, and implement the approved overhaul plan and carry out the
overhaul and maintenance for the equipments.
	 
	 	3.2.4	 	To accept the operation direction and coordination released by Party A, which are made
in accordance with Article 3.1.5 hereof, and employ corresponding technical management and
equipment overhaul staff to cooperate with Party A.
	 
	 	3.2.5	 	To conduct the technological improvement and parameter adjustment to its

12

 

	 	 	 	equipments in time as required and file them with Party A (in case of involving the safety of the grid,
subject to the approval of Party A).
	 
	 	3.2.6	 	To provide the information in relation to the equipment operation and production of the
Power Station (including the water conditions) to Party A on a prompt, accurate, objective
and complete basis.
	 
	 	3.2.7	 	To formulate the spot operation regulation in compliance with the relevant power system
regulations and rules of Party A, and file with Party A.
	 
	 	3.2.8	 	To take measures to prevent the occurrence of the accidents affecting the safe operation
of the power system; to coordinate with Party A to carry out periodically various
specialized and professional safety examinations and inspections in relation to the grid
safety, implement the precaution advanced during the examination and inspection; in case of
any specified counter-accident measures or other power system requirements of the Power
Dispatching Agency, to carry out such requirements and measures and maintenance; to file
relevant documents regarding the safety measures with the Power Dispatching Agency; and to
participate in the unified counter-accident rehearsal organized by the Power Dispatching
Agency.
	 
	 	3.2.9	 	To cooperate with Party A for accident investigation.

CHAPTER IV CONDITIONS FOR GRID CONNECTION

	4.1	 	The primary and secondary equipments of Party B shall be complied with the national and power
industry standards and other relevant regulations, installed and tested in accordance with the
designed requirements examined and confirmed by the State authorized agency, and accepted as
qualified in accordance with the completion acceptance procedures for the basic construction
regulated by the State; in addition, the mode for normal grid connection operation has been
identified, relevant parameters

13

 

	 	 	have been reasonably matched, the value for the equipment
setting has been set as required, and the conditions for the operation connected to Party A’s
grid and the acceptance of the
unified dispatching released from the Power Dispatching Agency has already been satisfied.
	 
	4.2	 	The relay protection and automatic safety devices of the Power Station (including the
excitation system and governor system) shall be complied with national and power industry
standards, and other relevant regulations, installed and tested in accordance with the
designed requirements examined and confirmed by the State authorized agency, accepted as
qualified in accordance with the completion acceptance procedures for the basic construction
regulated by the State and complied with the relevant regulations under Chapter 8 hereof.
	 
	4.3	 	The dispatching automatization facilities of the Power Station shall be complied with
national and power industry standards, and other relevant regulations, installed and tested in
accordance with the designed requirements examined and confirmed by the State authorized
agency, accepted as qualified in accordance with the completion acceptance procedures for the
basic construction regulated by the State and complied with the relevant regulations under
Chapter 9 hereof.
	 
	4.4	 	The power dispatching communication facilities of the Power Station shall be complied with
national and power industry standards, and other relevant regulations, installed and tested in
accordance with the designed requirements examined and confirmed by the State authorized
agency, accepted as qualified in accordance with the completion acceptance procedures for the
basic construction regulated by the State and complied with the relevant regulations under
Chapter 10 hereof.
	 
	4.5	 	The electricity energy measuring appliance of the Power Station shall be configured with the
requirements of the Technical Administration Code of Electric Energy Metering Devices (DL/T
448-2000), and pass the testing and acceptance jointly

14

 

	 	 	organized by Party A and Party B.
	 
	4.6	 	Party B has taken the safety precaution measures to the secondary system of the Power Station
in accordance with the requirements of the Regulations on Safe Protection of Computer
Monitoring and Control Systems and Dispatching Data Networks of Power Grids and Power Plants
(No.30 Decree issued by the former State Economic and Trade Commission) and other relevant
regulations, which has been confirmed by Power Dispatching Agency for operation availability.
	 
	4.7	 	Regulations for the operation and overhaul of the Power Station, relevant management rules
have been formulated; and among other regulations, the regulations in relation to the grid
safety shall be complied with the safety administration regulations for grid.
	 
	4.8	 	The on-duty operator with the dispatching receipt right of the Power Station has been trained
strictly, obtained relevant qualification certificate for work in accordance with the
Administration Regulations on the Dispatching of Power Grids and other relevant regulations.
	 
	4.9	 	The primary and secondary equipments of Party A corresponding to the operation of Party B
shall be complied with the national and power industry standards and other relevant
regulations, installed and tested in accordance with the designed requirements examined and
confirmed by the State authorized agency, and accepted as qualified in accordance with the
completion acceptance procedures for the basic construction regulated by the State; in
addition, relevant parameters have been reasonably matched, the value for the equipment
setting has been set as required, and the conditions for the operation connected to the Power
Station has already been satisfied.
	 
	4.10	 	The counter-accident measures corresponding to the Emergencies that might be occurred after
the on-grid connection of the Power Station have been formulated by Party A and Party B, which
has already been filed with the Power Dispatching Agency.

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CHAPTER V DISPATCHING AND OPERATION

	5.1	 	The on-duty operator of the Power Station, during the operation, shall strictly obey the
dispatching directions released by the on-duty dispatcher of the Power Dispatching Agency.

	 	5.1.1	 	The Power Station shall quickly and accurately implement the dispatching directions
released by the Power Dispatching Agency without any excuse to refuse and delay. In the
event that the implementation of such dispatching directions might threaten the safety of
the personnel or the equipment, the relevant conditions and reasons shall be immediately
reported to the on-duty dispatcher of the Power Dispatching Agency to determine the
continuity of such implementation.
	 
	 	5.1.2	 	The Power Station must operate the equipments under the direct dispatching of the Power
Dispatching Agency strictly in accordance with the dispatching directions and relevant
implementation regulations concerning the dispatching, and accurately report the spot
conditions and reply to the relevant inquiry of the on-duty dispatcher of the Power
Dispatching Agency.
	 
	 	5.1.3	 	The operation of the equipments within the dispatching jurisdiction of the Power
Dispatching Agency shall be applied for the permit to the on-duty dispatcher of the Power
Dispatching Agency by the on-duty operator of the Power Station in advance, and the on-duty
operator of the Power Station shall operate such equipments upon the consent from the
on-duty dispatcher of the Power Dispatching Agency in accordance with the power system
dispatching regulations and the spot operation regulations of the Power Station.

	5.2	 	The Power Dispatching Agency shall reasonably arrange the Daily Power Generation Dispatching
Plan Curve as required. During the real-time operation, the on-duty

16

 

	 	 	dispatcher could make
available adjustment to the Daily Power Generation Dispatching Plan Curve due to the real
operation conditions, the notice of which shall be sent to the
on-duty operator of the Power Station sixty (60) minutes in advance.
	 
	5.3	 	In case of any abnormal conditions during the equipment operation of the Power Station, the
Power Station shall apply for the overhaul twenty four (24) hours in advance to the
Power Dispatching Agency according to the provisions of the power system dispatching
regulations. In light of the provisions of the power system dispatching regulations and the
real conditions of the grid, the Power Dispatching Agency shall, in compliance with the
relevant regulated procedures, reply to the relevant overhaul application twelve (12)
hours in advance and amend the plan accordingly. In case of any urgent outage, the Power
Dispatching Agency shall reply to such application on the basis of the real conditions
immediately, and the Power Station shall carry out the overhaul according to the final
approval from the Power Dispatching Agency.
	 
	5.4	 	The Power Dispatching Agency shall, on the principle that the generator units on the same
grid, of the same type, with the same technical conditions, shall be modulated to a basically
same extent, in accordance with the grid structure and the electric technical conditions of
the Power Station, arrange the participation of the Power Station in the cycling loading,
frequency modulation, voltage regulation and reserve operation of the power system safely,
qualifiedly and economically.

	 	5.4.1	 	Cycling Loading
	 
	 	 	 	The Power Station shall participate in the cycling loading of the power system, the
capacity of which is agreed by both Parties to be 4 MW.
	 
	 	5.4.2	 	Frequency Modulation
	 
	 	 	 	Upon the agreement between and by Party A and Party B, the Power Station (generator
units), upon the normal operation of the Cangxi grid, shall be considered as the power
station free from frequency modulation; upon the isolated grid

17

 

	 	 	 	operation of the Cangxi grid, the Power Station(generator units) shall be considered as the first
frequency modulation power station, the generator units shall be required
to participate in the frequency modulation of the power system in accordance with the
power system dispatching regulations.
	 
	 	5.4.3	 	Voltage Regulation
	 
	 	 	 	The Power Station shall be operated in accordance with the reactive output curve
(or voltage curve) released by the Power Dispatching Agency to ensure the operation of
the busbar voltage of the Power Station within the prescribed range. In the event that
the Power Station has lost its control on the voltage, such conditions shall be
immediately reported to the on-duty dispatcher of the Power Dispatching Agency.
	 
	 	5.4.4	 	Reserve Operation
	 
	 	 	 	In case of being required by the Power Dispatching Agency, the Power Station shall
reserve certain ratio rotary standby capacity; in the event that the rotary standby
capacity could not satisfy the requirement of the Power Dispatching Agency, such
conditions shall be immediately reported to the on-duty dispatcher of the Power
Dispatching Agency.

	5.5	 	In case that the Special Operation Mode of Party A, which is required by the equipment
renewal and transformation, and etc., may affect the normal operation of the Power Station,
the relevant amended scheme shall be notified to the Power Station by the Power Dispatching
Agency seven (7) days in advance, and the agreed scheme shall be carried out.
	 
	5.6	 	In case that the Special Operation Mode of Party B, which is required by the equipment
renewal and transformation, and etc., may affect the normal operation of the grid, the
relevant amended plan shall be notified to the Power Dispatching Agency seven (7) days
in advance, and the agreed scheme shall be carried out.

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	5.7	 	The periodical joint conference of grid and power plant organized by the Power Dispatching
Agency and its grid-connected power stations shall invite Party B, during
which, grid operation conditions could be analyzed, the system situations could be
anticipated, the implementation of relevant technical measures for the grid safety could be
illustrated, and material issues for the power system operation could be consulted. Party B
shall attend such grid and power plant joint conference, and present the operation conditions
of the Power Station and the implementation conditions of relevant technical measures of the
Power Station safety.
	 
	5.8	 	The written name list of the relevant on-duty staff of Party A and Party B shall be
exchanged, and relevant alterations shall be notified to each Party in time.

CHAPTER VI POWER GENERATION PLAN

	6.1	 	Party B shall, on the basis of the executed Power Purchase and Sale Contract and the real
operation conditions of the Power Station, submit its proposed daily, monthly, annual and
holiday power generation plans, and proposed power generation plan under Special Operation
Mode, in accordance with the requirements set forth below:

	 	(1)	 	Before December 10 of each year, Party B shall submit the power
generation plan recommendation for the next year to Party A;
	 
	 	(2)	 	Before the 20th day of each month, Party B shall submit the
proposed power generation plan for the next month to Party A;
	 
	 	(3)	 	Five (5) days before the statutory national holidays (including New
Year’s Day, Spring Festival, May Day, National Day and etc.) or the implementation of
the Special Operation Mode, Party B shall submit the proposed power generation plan for
holidays or Special Operation Mode to Party A.

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	6.2	 	Party A shall notify Party B of the formulated monthly power generation plans for the next
year before December 25 of each year, in accordance the Power Purchase and Sale
Contract with the consideration of the proposed power generation plans applied by Party
B.
	 
	6.3	 	Party A shall notify Party B of the formulated power generation plans for the next month, the
holiday or the Special Operation Mode before the 25th day of each month,
three (3) days before the holidays or three (3) days before the implementation
of the Special Operation Mode, in light of the annual power generation plan per month
formulated in accordance with Article 6.2 hereof, the schedule for the completed power
generation output and the recent loading conditions of the grid.
	 
	6.4	 	The Power Dispatching Agency shall formulate the Daily Power Generation Dispatching Plan
Curve for the next day in accordance with the monthly power generation plan formulated
according to Article 6.3 hereof, the real condition of the grid and the data supplied by the
Power Station (the Power Station shall submit to the Power Dispatching Agency for the next
day’s maximum Available Capacity or the alteration conditions for the Available Capacity of
the generator units of the Power Station before 14:00 of each day, and report the
defects and default which affect the capacity of its generator units), and release such Daily
Power Generation Dispatching Plan Curve for the next day to the Power Station before 18:00
of each day.
	 
	6.5	 	The Power Station shall strictly carry out the Daily Power Generation Dispatching Plan Curve
released by the Power Dispatching Agency (including the amended curve temporarily by the
on-duty dispatcher) and dispatching directions, and adjust the active output of the generator
units in time and arrange the production and operation of the Power Station.

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CHAPTER VII EQUIPMENT OVERHAUL

	7.1	 	The equipment overhaul of the grid-connected stations shall be carried out as planned.

	 	7.1.1	 	Party B shall submit to the Power Dispatching Agency proposed annual and monthly
equipment overhaul plans, and proposed equipment overhaul plans for holidays and
Special Operation Mode as the submission of the proposed monthly, annual and holiday
power generation plans, and proposed power generation plan under Special Operation Mode
to the Power Dispatching Agency as planned in this Agreement.
	 
	 	7.1.2	 	After the consultation of Party A and Party B, the Power Dispatching Agency will
incorporate the equipment overhaul plan into the annual and monthly overhaul of the power
system, and the overhaul plan for holidays and Special Operation Mode.

	 	(1)	 	Before the 25th day of December of each year, to
notify the Power Station of the approved equipment overhaul plan of the Power
Station for the next year;
	 
	 	(2)	 	Before the 22nd day of each month, to notify the Power
Station of the approved equipment overhaul plan of the Power Station for the next
month;
	 
	 	(3)	 	Seven (7) days before the statutory national holidays or the
implementation of the Special Operation Mode, to notify the Power Station of the
approved equipment overhaul plan of the Power Station for the holidays and Special
Operation Mode.

	7.2	 	In the event that the Power Station needs to resolve the defects during the system load
valley period (from 23:00 of the given day to 7:00 of the next day), it shall
apply to the Power Dispatching Agency before 16:00 of the given day, and the Power
Dispatching Agency shall try its best to arrange such plan in accordance with the real
conditions of the grid and amend the Daily Power Generation Dispatching Plan Curve in time.
	 
	7.3	 	Overhaul Application and Reply
	 
	 	 	The Power Station shall submit to the Power Dispatching Agency with the overhaul

21

 

	 	 	application before its implementation of the overhaul work, and commence the work upon the approval for the
overhaul from the Power Dispatching Agency.

	 	7.3.1	 	The overhaul application shall be submitted to the Power Dispatching Agency three
(3) days prior to the commencement of the overhaul work.
	 
	 	7.3.2	 	The overhaul application shall include the content of the name of the equipments for
overhaul, the overhaul details, the measures for segregation, the requirements for the power
system and etc.
	 
	 	7.3.3	 	The Power Dispatching Agency shall notify the Power Station the reply to the overhaul
application two (2) days prior to the commencement of the overhaul work, and point
out the safety measures and other requirements that the Power Station shall take or pay
attention to; in addition, the corresponding Emergencies preplan shall be made as well.

	7.4	 	Party B shall strictly carry out the approved overhaul plan, and complete the overhaul work
on schedule.

	 	7.4.1	 	In the event that the Power Station can not complete its approved overhaul plan on
schedule due to the reason of itself, it shall submit the application for the amendment to
the approved overhaul plan to the Power Dispatching Agency two (2) days before the
approved planned commencement date of the overhaul plan. The Power Dispatching Agency shall
reasonably adjust the overhaul plan in accordance with the grid operation conditions; in the
event that the overhaul plan can be re-arranged, the Power Dispatching Agency shall notify
the Power Station the adjusted overhaul plan of the Power Station one (1) day in
advance; in the event that the overhaul plan cannot be re-arranged, the Power Station shall
do its best to implement the originally approved overhaul plan; otherwise, the Power
Dispatching Agency will not arrange extra planned overhaul within the current year in
principle.

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	 	7.4.2	 	In the event that the overhaul work of the Power Station is required to be extended, the
Power Station shall apply to the Power Dispatching Agency for the extension procedures for
the overhaul work before the completion of half of the overhaul
work.
	 
	 	7.4.3	 	In the event that the Power Station cannot carry out the overhaul work on schedule due
to the requirement of the operation of the power system, the Power Dispatching Agency shall
conduct a consultation with the Power Station in advance, adjust the overhaul plan and
notify the Power Station. In the event that the power generator units have to be operated
extendedly, Party A and Party B shall, in accordance with relevant regulations, take the
consultation for the Emergencies measures for any possible condition, and the overhaul
procedures from the operation condition corresponding to the overhaul of the generator
units.

	7.5	 	If the grid overhaul may affect the supply capacity of the Power Station, the grid overhaul
shall try to be carried out in cooperation with the equipment overhaul (or the outage for
reserve) of the Power Station.
	 
	7.6	 	The Power Dispatching Agency shall make a reasonable arrangement for the overhaul of the
grid, relay protection and automatic safety devices of Power Station, power dispatching
automatization, power dispatching communication system and other secondary equipments under
its dispatching. In principle, the overhaul for the secondary equipments shall not affect the
normal operation of the primary equipments; otherwise, the overhaul for the secondary
equipments shall be carried out in cooperation with the overhaul for the primary equipments as
much as possible.
	 
	7.7	 	After the overhaul of the equipments, the Power Station shall report to the Power Dispatching
Agency in time and resume the operation of the equipment in accordance with relevant
regulations.

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CHAPTER VIII RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES

	8.1	 	Party A shall abide by the regulations and rules for the design, operation and management of
the relay protection and automatic safety devices, be responsible for the operation management
of the relay protection and automatic safety devices within the its dispatching jurisdiction
in accordance with the requirements set forth below:

	 	(1)	 	To be responsible for the setting calculation and operation of the relay
protection and automatic safety devices within its dispatching jurisdiction, and carry
out analysis and valuation for the running conditions of the devices;
	 
	 	(2)	 	To conduct periodic check and maintenance and testing on the relay protection and
automatic safety devices within its dispatching jurisdiction to make them comply with
the originally determined device technical requirements and the entire requirements of
the Power Dispatching Agency; and to keep the testing reports and records in full;
	 
	 	(3)	 	After the running of the grid relay protection and automatic safety devices, to
carry out the analysis and settlement in accordance with the regulations, and report the
relevant materials to the Power Dispatching Agency immediately; if such running of the
grid relay protection and automatic safety devices is related to the Power Station, the
analysis and settlement for the accidents shall be carried out in cooperation with the
Power Station;
	 
	 	(4)	 	In case of any mistaken running of or defect on the grid relay protection and
automatic safety devices, to settle it down in accordance with relevant regulations
immediately, report relevant materials to the Power Dispatching Agency, and take the
precaution measures in time; if such mistake or defect is related to the Power

24

 

	 	 	 	Station, relevant situation shall be notified to the Power Station in written form;
	 
	 	(5)	 	To direct and assist the Power Station in carrying out the setting and operation
of the grid relay protection and automatic safety devices, and
provide necessary technical support to the Power Station;
	 
	 	(6)	 	To strictly implement the counter-accident measures for the relay protection and
automatic safety devices issued by the State and relevant department authority;
	 
	 	(7)	 	To complete the operation analysis report for the relay protection and automatic
safety devices of last month before the 15th day of each month; in
addition, provide one (1) copy of such report to Party B.

	8.2	 	Party B shall abide by the regulations and rules for the design, operation and management of
the relay protection and automatic safety devices, be responsible for the operation management
of the relay protection and automatic safety devices under its control, in accordance with the
requirements set forth below:

	 	(1)	 	To be responsible for the calculation setting and operation maintenance of the
relay protection and automatic safety devices under its control (the setting values for
the relay protection and automatic safety devices of the Power Station within the
dispatching jurisdiction of the Power Dispatching Agency shall be released by the Power
Dispatching Agency, and setting values of the other relay protection and automatic
safety devices of the Power Station shall be calculated and set by the Power Station
itself, which shall be filed with the Power Dispatching Agency), and to analyze and
valuate the running conditions of the devices;
	 
	 	(2)	 	To conduct periodic check and maintenance and testing on the relay protection and
automatic safety devices under its control to make them comply with the originally
determined device technical requirements and the setting requirements;

25

 

	 	 	 	and to keep the testing reports and records in full;
	 
	 	(3)	 	To make the relay protection and automatic safety devices relating to the grid
matched with the relay protection and automatic safety devices of the grid, the
relevant model selection of which shall be approved by the Power Dispatching Agency;
	 
	 	(4)	 	In case of any alteration to the relay protection and automatic safety devices of
Party A, to make the Power Station change and adjust its setting values and operation
conditions of the relay protection and automatic safety devices controlled by it in
accordance with the requirements of the Power Dispatching Agency;
	 
	 	(5)	 	In case of any running of the relay protection and automatic safety devices of
the Power Station, to report this condition to the on-duty dispatcher of the Power
Dispatching Agency immediately, analyze and settle down such condition in accordance
with the regulations, and deliver relevant materials to the Power Dispatching Agency; in
the event that such running is related to the grid, to coordinate with the Power
Dispatching Agency for such analysis and settlement;
	 
	 	(6)	 	In case of any mistaken running of or defects on the relay protection and
automatic safety devices of the Power Station, to immediately report to the on-duty
dispatcher of the Power Dispatching Agency, settle it down in accordance with relevant
regulations, analyze the reasons, and take the precaution measures in time; if such
mistake or defect is related to the grid, to deliver relevant conditions to the Power
Dispatching Agency in written form;
	 
	 	(7)	 	To take the counter-accident measures for the relay protection and automatic
safety devices promulgated by the State or relevant authorities;

26

 

	 	(8)	 	To complete the operation analysis report for the relay protection (including
line protection, transformer protection, generator units protection and busbar
protection) and automatic safety devices of the previous month before the
5th day of each month with a copy of such report to the Power Dispatching
Agency.

	8.3	 	In order to improve the stability of the power system, both Parties shall renew and transform
the equipments immediately.

	 	8.3.1	 	The renewal and transformation for the relay protection and automatic safety
devices conducted by both Parties shall be coordinated to ensure the compatibility of
the equipments [20].
	 
	 	8.3.2	 	The transformed equipments shall pass the testing and completion acceptance,
then be put into operation upon the confirmed qualification.

	8.4	 	The relay protection and automatic safety devices of Party B shall reach the following main
operational parameters (excluding any mistaken running and missing running due to Party A’s
Reason):

	 	(1)	 	The main protection operational rate of the relay protection ≥ 100%;
	 
	 	(2)	 	The accurate rate for the protection running for 6 KV and above ≥
100%;
	 
	 	(3)	 	The availability for the fault recording ≥ 95%;
	 
	 	(4)	 	The operation rate for the automatic safety devices ≥ 95%;
	 
	 	(5)	 	The accurate rate for the automatic safety devices running ≥ 100%;
	 
	 	(6)	 	Other operational parameters agreed by both Parties: none.

	8.5	 	Both Parties shall appoint specific staff to take charge of the operation maintenance

27

 

	 	 	work for the relay protection and automatic safety devices respectively to ensure the normal
operation of the relay protection and automatic safety devices.

CHAPTER IX DISPATCHING AUTOMATIZATION

	9.1	 	Party A shall strictly abide by the design, operation and management regulations for the
dispatching automatization system at the dispatching end and be responsible for the operation
maintenance of the dispatching automatization system in accordance with the requirements set
forth below:

	 	(1)	 	To monitor the stable operation of the dispatching automatization system, be in
charge of the monitoring and checking of the operation conditions of the power
dispatching automatization system and coordinate the material issues occurred during the
operation;
	 
	 	(2)	 	To provide relevant conditions for the connection of the Power Station’s
automatization signal as required by the design;
	 
	 	(3)	 	To analyze the reasons for the default of the dispatching automatization system
in a timely fashion and take precaution measures;
	 
	 	(4)	 	To direct and assist Party B in the operation maintenance for the dispatching
automatization system, and cooperate with Party B for the accident investigation;
	 
	 	(5)	 	To make the computer monitoring and control system comply with the Regulations on
Safe Protection of Computer Monitoring and Control Systems and Dispatching Data Networks
of Power Grids and Power Plants (No.30 Decree issued by the former State Economic and
Trade Commission).

	9.2	 	Party B shall strictly abide by the design, operation and management regulations for the
dispatching automatization system at the Power Station end and be responsible for the

28

 

	 	 	operation maintenance of the dispatching automatization system in accordance with the
requirements set forth below:

	 	(1)	 	To transmit the telecontrol data and electricity energy data of the computer
monitoring system, electricity data collection and transmission appliance of the
Power Station to the dispatching automatization system and electricity energy metering
system in accordance with the transmission regulations complied with the national or
power industry standards. The electricity energy metering system shall pass the
testing of the qualified testing agency, which has been confirmed by Party A and Party
B, in order to ensure the accurate transmission of the data. The quantity and
accuracy of the real-time information for the operation equipments of the Power
Station shall reach the operation requirements of the relevant national regulations
and Power Dispatching Agency.
	 
	 	(2)	 	To analyze the reasons for the failures of the dispatching automatization system
under its control in a timely fashion and to take precaution measures accordingly.
	 
	 	(3)	 	To assist Party A in carrying out the maintenance work of the dispatching
automatization system and cooperate with Party A for the accident investigation.
	 
	 	(4)	 	To make the computer monitoring and control system of the Power Station complied
with the Regulations on Safe Protection of Computer Monitoring and Control Systems and
Dispatching Data Networks of Power Grids and Power Plants (No.30 Decree issued by the
former State Economic and Trade Commission).

	9.3	 	Both Parties shall operate and maintain the automatization equipments according to the power
system dispatching regulations and relevant dispatching automatization regulations without any
withdrawal or outage at random.
	 
	9.4	 	The computer supervisory system, electricity data collection and transmission appliance

29

 

	 	 	of the Power Station shall reach the following main operational parameters:

	 	(1)	 	The available capacity of the telecontrol station of the computer supervisory
system (per month) ≥ 98%;
	 
	 	(2)	 	The deviation for the accuracy of the tele-metering ≤ 98%;
	 
	 	(3)	 	Other parameters agreed by both Parties: the accuracy for the running rate of
the tele-signaling is 98%.

	9.5	 	Both Parties shall appoint specific staff for the operation maintenance work of the
dispatching automatization system under its control respectively in order to ensure the normal
operation of the dispatching automatization systems.

CHAPTER X DISPATCHING COMMUNICATION

	10.1	 	Party A shall strictly abide by the design, operation and management regulations for the
dispatching communication system at the dispatching end and be responsible for the operation
maintenance of the dispatching communication system in accordance with the requirements set
forth below:

	 	(1)	 	To monitor the stable operation of the dispatching communication system, be
responsible for the monitoring and testing, and dispatching direction of the operation
conditions of the dispatching communication system, and coordinate the material issues
occurred during the operation;
	 
	 	(2)	 	To maintain the communication equipments at the dispatching end and ensure its
stable operation;
	 
	 	(3)	 	To analyze the reasons for the dispatching communication system’s default in a
timely fashion and take precaution measures;

30

 

	 	(4)	 	To direct and assist Party B in the operation maintenance for the dispatching
communication system, and cooperate with Party B for the accident investigation.

	10.2	 	Party B shall strictly abide by the design, operation and management regulations for the
dispatching communication system at the Power Station end and be responsible for the
operational maintenance of the dispatching communication system in accordance with the
requirements set forth below:

	 	(1)	 	To maintain the communication equipments at the Power Station end and ensure its
stable operation;
	 
	 	(2)	 	To analyze the reasons for the dispatching communication system’s default in a
timely fashion and take precaution measures;
	 
	 	(3)	 	To assist Party A in the operation maintenance of the dispatching communication
system, and cooperate with Party A for the accident investigation.

	10.3	 	The model selections and configurations for the communication equipments of Party B which
will be connected to the power communication network of Party A shall be compatible and
consistent with each other.
	 
	10.4	 	The carrier wave frequency employed by Party B, relating to the Party A’s power communication
network, shall be submitted to Party A for approval, and be used upon the procurement of
approval with written confirmation from Party A.
	 
	10.5	 	Both Parties shall own standby communication systems to assure the communication and
connection in case of any Emergencies of the Power Station or the grid.
	 
	10.6	 	The dispatching communication system of Party B shall reach the main operational parameters
set forth below:

	 	(1)	 	The circuit operation rate for the communication system ≥ 99.8%;

31

 

	 	(2)	 	The operation rate for the equipment ≥99.9%;
	 
	 	(3)	 	Other parameters agreed by both Parties: none.

	10.7	 	Both Parties shall appoint specific staff for the operational maintenance work of the
dispatching communication system under its control respectively in order to ensure the normal
operation of the dispatching communication systems.

CHAPTER XI ACCIDENT INVESTIGATION AND SETTLEMENT

	11.1	 	The Power Dispatching Agency and the Power Station shall, within their respective
jurisdictions, carry out the settlement of the accidents quickly and accurately, in accordance
with the power system dispatching regulations and spot operation regulations of the Power
Station, and notify the settlement conditions of the accidents to each other in time.
	 
	11.2	 	The settlement for the accidents within the dispatching area of the Power Dispatching Agency
shall strictly implement the direction released by the on-duty dispatcher of the Power
Dispatching Agency (except for those, in accordance with the spot regulations, which can be
settled down without the dispatching directions).
	 
	11.3	 	On the basis of the grid structure, operational features and the specification of the Power
Station, the Power Dispatching Agency shall formulate accident settlement principles and
counter-accident measures in accordance with the Guide on Safety and Stability of the Power
System (DL755-2001), power system dispatching regulations and other relevant regulations, and
specify the requirements for the necessary measures which shall be taken by the Power Station.

	 	11.3.1	 	Under any Emergencies threatening the safety of the grid, the on-duty dispatcher of

32

 

	 	 	 	the Power Dispatching Agency may take necessary measures, including the adjustment of the power
generation output of the Power Station, the releasing of direction for on-off operation, and
etc., the Disconnection of the Power Station to assure and restore the safe operation of the
grid.
	 
	 	11.3.2	 	In the event that the Power Station or any of its generator units must be disconnected
from the grid, the Power Dispatching Agency shall reconnect the Power Station or any of its
generator units for operation provided that such Emergency is over or has been remedied.
	 
	 	11.3.3	 	The Power Dispatching Agency shall notify the reasons for the aforesaid Disconnection to
Party B afterwards.

	11.4	 	The Party or both Parties under the occurrence of any accident shall investigate such
accident in accordance with the Regulations on the Production Accidents Investigation of Power
Industry, the result of which shall include the reason for the accident, the responsible party
for this accident and relevant liabilities, and the counter-accident measures for preventing
similar accidents. The responsible party for the accident shall assume the responsibilities in
accordance with the investigation result, and carry out the counter-accident measures
immediately.

	 	11.4.1	 	The grid accident shall be investigated and analyzed by Party A; in case of involving
Party B, Party B shall be invited for the investigation and analysis. Party B shall
support Party A’s work, cooperate for the spot investigation, provide default record
chart, operation conditions during the accident and relevant data for accident analysis.
	 
	 	11.4.2	 	The accident of the Power Station shall be investigated and analyzed by Party B; in
case of involving Party A, Party A shall be invited for the investigation and analysis.
Party A shall support Party B’s work, cooperate for the spot

33

 

	 	 	 	investigation, provide default record chart, operation conditions during the accident and relevant data for
accident analysis.
	 
	 	11.4.3	 	The accident involved the grid and the Power Station shall be investigated by the
specific investigation panel composed in accordance with the national regulations if
the cause of the accident cannot be identified and agreed within a short period of
time.
	 
	 	11.4.4	 	The investigation report on the accident of any Party or both Parties shall be
disclosed, the content of which shall include the reasons for the accidents, the
settlement procedures of the accidents, the responsible party for the accident and its
liabilities, the rectification plan and precaution measures for the accident, and etc.
	 
	 	11.4.5	 	The responsible party for the accident shall rectify the mistake immediately,
implement the rectification plan and the precaution measures for the accident; in case
of involving the other Party, such rectification plan and the precaution measures for
the accident shall be approved by the other Party in advance.

CHAPTER XII FORCE MAJEURE

	12.1	 	If the occurrence of any Force Majeure event completely or partially impedes one Party from
fulfilling any obligation under this Agreement, such Party may be exempted from or postpone to
perform its contractual obligations, provided that:

	 	(1)	 	the scope and duration of the exempted or postponed performance shall not extend
beyond the reasonable needs of eliminating the impact of Force Majeure;
	 
	 	(2)	 	the Party affected by Force Majeure shall continue to perform its other
obligations hereunder which have not been affected by the Force Majeure;

34

 

	 	(3)	 	in case the events of Force Majeure come to an end, the Party claiming Force
Majeure shall resume the performance of this Agreement as soon as possible.

	12.2	 	In the event that any Party is unable to perform this Agreement due to Force Majeure,
such Party shall promptly inform the other Party, and shall send a written notice to the
other Party within three (3) days thereafter. Such written notice shall indicate the date of
the occurrence of Force Majeure, the anticipated duration, the nature of the events, the
impact on its performance of this Agreement and the measures it has taken to mitigate the
impact of such Force Majeure events.
	 
	 	 	Upon the other Party’s request, the Party affected by the Force Majeure shall furnish the other
Party with an evidential document issued by the competent local notary public where the Force
Majeure event occurs within thirty (30) days commencing from the date when the Force Majeure
event occurs (in the event of communication interruption, from the restoration date of the
communication).
	 
	12.3	 	The Parties affected by the Force Majeure shall take reasonable measures to mitigate the
losses incurred by either or both Parties caused by Force Majeure. The Parties shall
immediately consult with each other to formulate and implement a remedy plan and reasonable
alternative measures to mitigate or eliminate the impact of Force Majeure.
	 
	 	 	In the event that the Party affected by the Force Majeure fails to use all endeavors to take
reasonable measures to mitigate the impact of Force Majeure, that Party shall be responsible
for the enlarged losses arising therefrom.
	 
	12.4	 	In the event that the Force Majeure has prevented a Party from performing its obligations
under this Agreement for a continuous period of over thirty (30) days, the Parties
hereto shall consult with each other to determine the conditions for continuing the
performance of this Agreement or to terminate this Agreement. If the Parties hereto fail to
reach agreement concerning the conditions for continuing the performance of this

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	 	 	Agreement or
the termination of this Agreement within 180 days after the occurrence of Force
Majeure, any Party shall be entitled to terminate this Agreement with a notice to the other
Party, unless otherwise provided herein.

CHAPTER XIII LIABILITY FOR BREACH OF AGREEMENT

	13.1	 	Any breach of the provisions hereof committed by any Party shall constitute a breach of this
Agreement, the other Party is entitled to require the defaulting Party for the assumption of
the liability for breach of this Agreement.
	 
	13.2	 	In case of committing any breach of the following, Party A shall assume the liability for
breach of this Agreement to Party B in accordance with the methods listed out in the Article
13.3:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which causes direct
economic loss to Party B;
	 
	 	(2)	 	To commit a breach of the provision provided in the Article 4.9, as a result of
which, Party B cannot generate power as planned or as normal, or suffers from direct
economic loss;
	 
	 	(3)	 	To commit a breach of the power system dispatching regulations, which causes
direct economic loss to Party B;
	 
	 	(4)	 	Any requirement of the Power Dispatching Agency to the Power Station (power
generation units) to implement cycling loading, frequency modulation and voltage
regulation being over its operation capacity or the stipulations of this Agreement,
which causes direct economic loss to Party B;
	 
	 	(5)	 	To make any setting or control mistakes to the primary or secondary equipments of
the grid, which causes direct economic loss to Party B;

36

 

	 	(6)	 	occurrence of any conditions stipulated in Article 7.4.3 due to Party A’s Reason,
which causes economic loss to Party B;
	 
	 	(7)	 	To conduct any inappropriate implementation of the provisions stipulated in
Article 11.3.1, which causes economic loss to Party B;
	 
	 	(8)	 	Any default to the relay protection and automatic safety devices, dispatching
automatization system and dispatching communication system due to Party A’s Reason,
which causes economic loss to Party B;
	 
	 	(9)	 	To commit any other inappropriate act, which causes economic loss to Party B;
	 
	 	(10)	 	Other liabilities for the breach of agreement agreed by both Parties which shall
be assumed by Party A: none.

	13.3	 	Party A shall assume the liability for each breach of this Agreement according to the methods
set forth below:

	 	(1)	 	To pay the liquidated damages to Party B in the amount of RMB 10,000 in a
lump sum;
	 
	 	(2)	 	In the event that the breach committed by Party A causes direct loss to Party B
and the liquidated damages paid in accordance with the Item (1) of this Article cannot
compensate the loss in full, Party A shall make up the direct expenses and costs for
repairing the equipments and restoring the normal operations of Party B;
	 
	 	(3)	 	In the event that the breach committed by Party A causes power output loss to
Party B, the settlement shall be carried out in accordance with relevant provisions
stipulated in the Power Purchase and Sale Contract.

37

 

	13.4	 	In case of committing any of the following acts, Party B shall assume the liability for
breach of this Agreement to Party A in accordance with the methods listed out in the Article
13.5:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which causes direct
economic loss to Party A;
	 
	 	(2)	 	Failure to complete the preparation work for the grid connection in accordance
with Chapter IV, which causes direct economic loss to Party A;
	 
	 	(3)	 	To cause any abnormal operation or default of the primary or secondary equipments
in connection with the grid operation, which makes Party A suffer from direct economic
loss;
	 
	 	(4)	 	Failure to participate in the cycling loading, frequency modulation, voltage
regulation or reserve operation of the power system in accordance with the provisions
stipulated in Article 5.4;
	 
	 	(5)	 	To cause any alteration of the overhaul duration, which causes direct economic
loss to Party A;
	 
	 	(6)	 	Failure to report the real conditions of the equipments (such as the power
generator units and electric equipments, etc.) and relevant facilities of the Power
Station to the Power Dispatching Agency;
	 
	 	(7)	 	Failure of the relay protection and automatic safety devices of the Power Station
to reach the parameters listed out in the Article 8.4, or any incorrect running or
default of the relay protection and automatic safety devices of the Power Station, due
to Party B’s Reason, leads to any accident or the enlargement of the accident, which
causes direct economic loss to Party A;

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	 	(8)	 	Failure of the power dispatching automatization system of the Power Station to
reach the parameters listed out in the Article 9.4, or any default of the power
dispatching automatization system of the Power Station, due to Party B’s Reason, leads
to any accident or the enlargement of the accident, which causes direct
economic loss to Party A;
	 
	 	(9)	 	Failure of the dispatching communication system of the Power Station to reach the
parameters listed out in the Article 10.6, or any default of the power dispatching
communication system of the Power Station, due to Party B’s Reason, leads to any
accident or the enlargement of the accident, which causes direct economic loss to Party
A;
	 
	 	(10)	 	Other liabilities for the breach of agreement agreed by both Parties which shall
be assumed by Party B: none.

	13.5	 	Party B shall assume the liability for each breach of this Agreement according to the methods
set forth below:

	 	(1)	 	To pay the liquidated damages to Party A in the amount of RMB 10,000 in a
lump sum;
	 
	 	(2)	 	In the event that the breach committed by Party B causes direct loss to Party A
and the liquidated damages paid in accordance with Item (1) of this Article cannot
compensate the loss in full, Party B shall make up the direct expenses and costs for
repairing the equipments and restoring the normal operations of Party A;
	 
	 	(3)	 	In the event that the breach committed by Party B causes power output loss to
Party A, the settlement shall be carried out in accordance with relevant provisions
stipulated in the Power Purchase and Sale Contract.

	13.6	 	In the event that Party B commits any of the serious breaches of this Agreement set

39

 

	 	 	forth below, Party A may take enforcement measures to the extent of the Disconnection of the
defaulting Power Station (power generator units), in addition, Party B is entitled to claim
for any loss due to such Disconnection:

	 	(1)	 	The Power Station arbitrarily starts up for grid connection or shuts down for
Disconnection without being approved by the Power Dispatching Agency;
	 
	 	(2)	 	Under the Emergencies, the Power Station commits the breach of the provisions
stipulated in Article 5.1.1;
	 
	 	(3)	 	Under the Emergencies, the Power Station does not accurately report the actual
conditions of the equipments (such as the power generator units or electric equipments,
etc.) and relevant facilities of the Power Station to the Power Dispatching Agency;
	 
	 	(4)	 	Other serious breaches of the Agreement agreed by both Parties: none.

	13.7	 	Unless otherwise provided by this Agreement, in case of any breach of this Agreement, the
non-defaulting Party shall inform the defaulting Party to stop the breach and send the
defaulting Party a written notice as soon as possible for the requirement of rectification
work and the assumption of the liability of such breach in accordance with this Agreement.
	 
	13.8	 	The defaulting Party shall take steps to rectify its breach promptly and assume the liability
of the breach determined in accordance with this Agreement:

	 	(1)	 	The liquidated damages paid in a lump sum shall be paid off within fifteen
(15) days after the confirmation of the breach;
	 
	 	(2)	 	The balance between the liquidated damages paid in a lump sum and the direct
economic loss shall be paid off within thirty (30) days after the confirmation
of the loss;

40

 

	 	(3)	 	In case of power output loss, the settlement shall be conducted in accordance
with relevant provisions stipulated in the Power Purchase and Sale Contract.

	13.9	 	Before the expiration of the performance term stipulated in this Agreement, any Party
explicitly expresses or indicates by its own actions that it will not perform its obligations
under this Agreement, the other Party is entitled to require such Party to assume the
liability of breach of agreement.

CHAPTER XIV EFFECTIVENESS AND TERM

	14.1	 	This Agreement comes into effect upon the signing by the legal or authorized representatives
and being affixed with the official stamps of both Parties.
	 
	14.2	 	The valid term of this Agreement is from May 17, 2009 to May 18, 2010.
	 
	14.3	 	Both Parties shall consult with each other for the extension of this Agreement one
(1) month before the expiration of this Agreement.

CHAPTER XV MODIFICATION, TRANSFER AND TERMINATION OF THIS AGREEMENT

	15.1	 	Any modification, amendment or supplement to this Agreement shall be carried out in written
form, with the conditions of effectiveness same as specified in Article 14.1 hereof.
	 
	15.2	 	Both Parties expressly indicate that, without the written consent from the other Party, any
part or all of the rights or obligations under this Agreement shall not be transferred by any
Party to any third party.

41

 

	15.3	 	During the valid term of this Agreement, both Parties agree to adjust and amend this
Agreement accordingly if any of the following circumstances occurs:

	 	(1)	 	Any changes to the relevant national laws, regulations, rules and polices;
	 
	 	(2)	 	Any content of this Agreement conflicting with any relevant compulsory rules,
administrative measures, regulations and etc. issued by the national electric power
regulatory authority;
	 
	 	(3)	 	Other circumstances agreed by both Parties: none.

	15.4	 	Termination
	 
	 	 	If any of the following events occurs to any Party, the other Party is entitled to terminate
this Agreement fourteen (14) days after serving a notice of termination:

	 	(1)	 	If any Party goes bankrupt or liquidated, or the business license or the power
business permit of any Party or the Power Station is revoked;
	 
	 	(2)	 	If any Party is merged with the other Party, or all or the major part of the
assets of any Party is transferred to another entity, and the surviving enterprise
cannot assume all its obligations under this Agreement;
	 
	 	(3)	 	Other conditions agreed by both Parties: none.

CHAPTER XVI DISPUTE RESOLUTION

	16.1	 	All disputes arising from the performance of this Agreement and in connection with this
Agreement may be resolved through friendly consultation or mediation by the power regulatory
authority. In the event that no settlement can be reached through friendly consultation or
mediation, such dispute shall be settled in the way stipulated in the
following Item (2):

42

 

	 	(1)	 	Both Parties agree to submit the dispute for arbitration in
[          ] arbitration commission in accordance with its arbitration rules. In
addition, the arbitration award shall be final and binding on both Parties.
	 
	 	(2)	 	Any Party may submit the dispute to the people’s court for resolution through
judicial proceedings.

CHAPTER XVII APPLICABLE LAW

	17.1	 	The formation, validity, interpretation, performance and dispute resolution of this Agreement
shall be governed by the laws of the People’s Republic of China.

CHAPTER XVIII MISCELLANEOUS

	18.1	 	Confidentiality
	 
	 	 	Both Parties warrant that the materials and documents obtained from the other Party which
cannot be obtained through public channel shall be treated confidentially. Without the consent
from the original provider of such materials and documents, all or any part of such materials
and documents shall not be disclosed to any third party, unless otherwise provided by the
State.

	18.2	 	Appendices
	 
	 	 	Appendix I: Diagram for the Grid Connection Points
	 
	 	 	Appendix II: The Technical Parameters of the Power Station
	 
	 	 	Appendix III: The Dispatching Division of the Power Station’s Equipments
	 
	 	 	The Appendices to this Agreement (including Special Provisions) shall constitute an integral
part of this Agreement, and shall have the same legal effect as this Agreement. In case of any
discrepancies between this Agreement and its appendices, according to the
nature of discrepancy, the content most related to and dealing more deeply with the

43

 

	 	 	point of
dispute shall prevail. In case that the discrepancy and contradiction still exist after having
applied the aforesaid principle, both Parties shall, on the principle of good faith, consult
with each other to make the determination according to the purpose of this Agreement.
	 
	18.3	 	Entire Agreement
	 
	 	 	This Agreement (including Specification Clauses) and its appendices shall constitute the entire
agreement between both Parties as to the subject matter of this Agreement, and shall supersede
all previous discussions, negotiations, contracts and agreements between them in relation to
the subject matter hereof.
	 
	18.4	 	Notification and Delivery
	 
	 	 	Any notification or document given under or in connection with this Agreement shall be in
writing. In the event that the notification or document is sent through air-mail, courier
service or personal delivery, it shall be deemed to be given upon the receipt in writing; and
in case of facsimile, it shall be deemed to be given upon the confirmation of receipt. All
notifications and documents shall not come into effect until being delivered or received. All
notifications shall be delivered to the following addresses as provided in this Agreement or to
a modified address when either Party has notified the other Party with a written notice.

	 	 	 	 	 
	 
	 	Party A:	 	 
	 
	 	 	 	 
	 
	 	Addressee:	 	Sichuan Cangxi Electric Power Co., Ltd.
	 
	 	 	 	 
	 
	 	Telephone:	 	0839-5222084
	 
	 	 	 	 
	 
	 	Facsimile:	 	0839-5222084
	 
	 	 	 	 
	 
	 	Post Code:	 	628400
	 
	 	 	 	 
	 
	 	Email:	 	cxmaster@21cn.com
	 
	 	 	 	 
	 
	 	Mail Address:	 	No.13, Renmin West Street, Lingjiang Township, Cangxi County.

44

 

	 	 	 	 	 
	 
	 	Party B:	 	 
	 
	 	 	 	 
	 
	 	Addressee:	 	Sichuan Huabang Hydroelectric Development Co., Ltd.
	 
	 	 	 	 
	 
	 	Telephone:	 	0839-5285466
	 
	 	 	 	 
	 
	 	Facsimile:	 	0839-5285468
	 
	 	 	 	 
	 
	 	Post Code:	 	628400
	 
	 	 	 	 
	 
	 	Email:	 	sichuanhuabang@163.com
	 
	 	 	 	 
	 
	 	Mailing Address:	 	Room 602, Jin Xia Yi Yuan Binjiang Road, Cangxi County

	18.5	 	No Waiver
	 
	 	 	Any waiver of any of its rights under this Agreement of any Party, which is not expressed in a
written form, shall not be deemed as a waiver thereof. Either Party’s failure to exercise any
of its rights under this Agreement shall not be considered to be a waiver of any of its
aforesaid rights or a waiver of any of its aforesaid rights in the future.
	 
	18.6	 	Continuous Effectiveness
	 
	 	 	The terms and conditions in connection with the arbitration and confidentiality under this
Agreement shall remain effective after the termination of this Agreement.
	 
	18.7	 	Text
	 
	 	 	This Agreement comprises nineteen (19) pages, and is executed in six (6)
counterparts, and each Party holds two (2) counterparts, and the rest two (2)
counterparts are filed with the Economic and Commercial Bureau of Cangxi County.

45

 

Party A: Sichuan Cangxi Electric Power Co., Ltd.

(stamp)

Legal Representative or Authorized Representative:                     

Signing Date: May 17, 2009

Signing Place: Sichuan Cangxi Electric Power Co., Ltd.

Party B: Sichuan Huabang Hydroelectric Development Co., Ltd.

(stamp)

Legal Representative or Authorized Representative:                     

Signing Date: May 17, 2009

Signing Place: Sichuan Cangxi Electric Power Co., Ltd.

46

 

Special provisions

Dispatching for the Reservoir of the Power Station

	1.1	 	Characteristics for the Reservoir and Basic Parameters

	 	1.1.1	 	The regulating characteristics for the reservoir of the Power Station is: runoff
reservoir
	 
	 	1.1.2	 	Basic Parameters

	 	(1)	 	Controlled Drainage Area: 4,934km2.
	 
	 	(2)	 	Normal Storage Level and Corresponding Reservoir Capacity: 368 m;
30,800,000 m3.
	 
	 	(3)	 	Dead Water Level and Corresponding Reservoir Capacity: 361 m;
5,900,000 m3.
	 
	 	(4)	 	Design Flood Level and Corresponding Reservoir Capacity: 372.67m; 5,988
m3.
	 
	 	(5)	 	Check Flood Level and Corresponding Reservoir Capacity: 375.05m;
77,590,000 m3.
	 
	 	(6)	 	Top Level of Flood Control: 375 m.

	 
	 	(7)	 	Beginning Water Level in Flood Season: 367.6m.

	 	1.1.3	 	Reservoir Capacity

	 	(1)	 	Total Reservoir Capacity: 30,800,000 m3.
	 
	 	(2)	 	Flood Control Capacity: 59,880,000 m3.
	 
	 	(3)	 	Usable Capacity: 29,080,000 m3.
	 
	 	(4)	 	Other Parameters: none.

	 	1.1.4	 	Flow

	 	(1)	 	Design Flood: 12,165m3/s.
	 
	 	(2)	 	Check Flood: 16,890m3/s.
	 
	 	(3)	 	Maximum Design Discharge Flow: 14,998 m3/s.

47

 

	 	(4)	 	Minimum Design Discharge Flow: 182 m3/s.
	 
	 	(5)	 	Maximum Power Generation Flow: 149.11 m3/s.

	 	1.1.5	 	The reservoir water level variation range of the Liyuan Power Station Hydroelectric
Project during the cofferdam power generation is from 367.6 m to 368 m.

	1.2	 	Reservoir Dispatching Range
	 
	 	 	Within the flood season, the flood control capacity and the usage of the flood dispatching
above the beginning water level shall be subject to the unified dispatching and direction of
the Flood Control Direction Agency of Cangxi County, and the capacity below the beginning water
level shall be subject to the unified dispatching and direction of the Power Dispatching
Agency.
	 
	1.3	 	Principles for the Reservoir Dispatching

	 	(1)	 	To conduct the reservoir dispatching in accordance with relevant laws and
regulations and the reservoir dispatching regulations to assure the safe operation of the
reservoir.
	 
	 	(2)	 	To carry out the dispatching in strict accordance with its project designed flood
control principles in order to ensure the safety of the project and satisfy the flood
control standard requirements of the upstream and downstream flows.
	 
	 	(3)	 	To make full use of the hydropower resources and develop the comprehensive
utilization of the reservoir.

	1.4	 	Basic Requirements for the Reservoir Dispatching

	 	(1)	 	Party B shall provide the design materials, operational statistical data, and
operation conclusion of the Power Station as required by Party A.
	 
	 	(2)	 	The Power Station shall submit the annual flood control plan of the current year
to the Power Dispatching Agency before March 30th of each year, pay
close attention to the meteorological changes within the drainage during the flood
season, provide the flood conditions and other conditions in relation to the flood
control in time, 

48

 

	 	 	 	and carry out the short-term flood prediction. In case of serious flood
or disastrous
climate, Party B shall report to Party A immediately.
	 
	 	(3)	 	Party B shall deliver the real-time operation conditions of the reservoir and
generator units to Party B as required.
	 
	 	(4)	 	The water level of the reservoir shall be controlled in accordance with the
designed dispatching diagram or the reservoir water level fluctuation plan agreed by
both Parties through consultation, and be assured to be operated above the dead water
level.
	 
	 	(5)	 	The comprehensive utilization, the utilization in the frequency modulation,
cycling loading of the grid, and Emergency standby duty of the Power Station shall be
fully take use of, provided that the safety of the dam and equipment of the Power
Station are assured.
	 
	 	(6)	 	Both Parties shall coordinate with each other and do their best to take full use
of the hydroelectric energy for more power generation with less water discharging.

49

 

APPENDIX I Diagram for the Grid Connection Points

	1	 	The grid connection point is the 591 switch of 35KV Lingli Line (vacuum circuit
breaker) owned, operated and maintained by Party B, which is dispatched by Party A.

	2	 	The 35KV Lingjiao Line and 544 switch indicated in the diagram are the equipments
owned by Party A; and the lines from the “T” connection point of 35KV Line till Liyuan
Power Station is the equipment owned by Party B.

50

 

APPENDIX II The Technical Parameters of the Power Station

	1	 	Data Plate Parameters of the Generator Units of the Power Station

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Rated	 	Active	 	Rated	 	Rated
	 	 	 	 	Capacity	 	Power	 	Capacity	 	Revolution
	Serial Number	 	Models	 	(MVA)	 	(MW)	 	Factor	 	(r/min)
	No.1 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3
	No.2 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3
	No.3 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3
	No.4 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3
	No.5 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3
	No.6 Generator Unit
	 	SF2000-28/2840
	 	2.5
	 	2
	 	0.8
	 	214.3

	2	 	The grid connection line for the connection between the Power Station and the
grid of Party A.

	 	(1)	 	Name of the Line: Lingli line.
	 
	 	(2)	 	Voltage Classification: 35 KV

	3	 	Party B shall provide other accurate parameters of the Power Station in
accordance with the designed parameters of the equipments and the result of the grid
connection checking.

	 	3.1	 	The Output Range for the Normal Operation
	 
	 	 	 	The maximum output of the normal operation of No.1, 2, 3, 4, 5 and 6 power

51

 

	 	 	 	generator units of the Power Station is 100% of the rated capacity, and the
minimum output of the normal operation of such aforesaid power generator units is
0% of the rated capacity.

	3.2	 	Under any specific conditions of the grid, no specific requirement
is needed for the minimum output of No.1, 2, 3, 4, 5 and 6 power
generator units of the Power Station.
	 
	3.3	 	The modulation rate for the frequency of the generator units during the
nominal operation
	 
	 	 	The rate for No.1, 2, 3, 4, 5 and 6 power generator units of the Power
Station is 2 MW/min.
	 
	3.4	 	The minimum duration required from the receipt of the dispatching
direction to the reaching of the generator units for grid connection output is 5
minutes.
	 
	3.5	 	After the receipt of the dispatching direction, the shortest shutdown
duration from full load output to zero load is 3 minutes.
	 
	3.6	 	The shortest shutdown duration from disconnection of units to
reconnection with the grid 1 minute.
	 
	3.7	 	No.1, 2, 3, 4, 5 and 6 power generator units of the Power Station
cannot be under the under-excitation operation.
	 
	3.8	 	Other technical parameters needed to be specified by both Parties:
none.

	4	 	The operation modes limited or non-recommended by the manufacturer of the
equipments:

	 	(1)	 	No.1, 2, 3, 4, 5 and 6 generator units cannot be operated for
phase modulation

52

 

	 	 	 	at any conditions.
	 	(2)	 	No.1, 2, 3, 4, 5 and 6 generator units cannot be operated for
frequency modulation under the condition of the parallel operation of the Cangxi
grid and the bigger system.

     Other non-recommended operation modes: none.

	5	 	After the business operation of the Power Station, in case of any changes to the
operational parameters of the generator units noticed by the Party B which needs to be
adjusted since it cannot reach the technical parameters indicated in Article 3 of this
appendix, Party B shall indicate the conditions to the Power Dispatching Agency, and
submit the testing report confirmed by the qualified agency.

53

 

APPENDIX III The Dispatching Division of the Power Station’s Equipments 

	1	 	The direct dispatching range of the Power Dispatching Agency after the grid
connection with the Power Station.

	 	(1)	 	The generator units: None.
	 
	 	(2)	 	Primary Equipments
	 
	 	 	 	The 591 switch of 35KV Lingli Line and the isolating switches (including the
ground switch) on both sides of the 591 switch.
	 
	 	(3)	 	The Relay Protection and Automatic Safety Devices in connection with the
Grid Operation of Party A
	 
	 	 	 	The relay protection and automatic safety devices for the 591 switch of
35KV Lingli Line.
	 
	 	(4)	 	The Dispatching Automatization and Communication Facilities in connection
with the Grid Operation of Party A
	 
	 	 	 	None.
	 
	 	(5)	 	Other Facilities Considered to be connected with the Grid Safety by the
Power Dispatching Agency
	 
	 	 	 	None.

	2	 	The permitted dispatching jurisdiction of the Power Dispatching Agency after the
grid connection of the Power Station

	 	(1)	 	No. 1, 2, 3, 4, 5 and 6 units.
	 
	 	(2)	 	No. 1, 2 and 3 main transformers.
	 
	 	(3)	 	Dispatching and communication lines..

54EX-10.27

Exhibit 10.27

Agreement No: 200814

GRID CONNECTION ECONOMIC AGREEMENT

			
	PARTY A (PURCHASER):	 	LISHUI POWER INDUSTRY BUREAU
	 
	PARTY B (SELLER):	 	YUNHE COUNTY SHAPULONG HYDROPOWER

GENERATION CO., LTD.

(Shapulong Power Plant)

-1-

 

Name of Power Purchaser: Lishui Power Industry Bureau

Contact Person: Wu Jianping

Telephone Number: 2100401      Fax:                       Zip Code: 323000

Mail Address: No.699, Zhongdong Road, Lishui City

			
	Bank of Deposit:	 	Lishui City Chuzhou Sub-branch, Industrial and Commercial Bank of China

Bank Account: 1210200009021000949

Tax Registration Number: 331100848862337

Business License Number: 3325001001125 (1/1)

			
	Name of Power Seller:	 	Yunhe County Shapulong Hydropower Generation Co., Ltd. (Shapulong Power
Plant)

Contact Person: Zha Guoqiang

E-mail: cgq1946@sohu.com            Telephone Number: 13645783722

Fax: 0578-2291172                           Zip Code:  323600 

Mail Address: No.42, Xinhua Street, Yunhe County

Name of Bank Account: Yunhe County Shapulong Hydropower Generation Co., Ltd.

Bank of Deposit: Yunhe County Sub-branch, Agricultural Bank of China

Bank Account: 815101040001415

Tax Registration Number: 331125704765490

Business License Number: 331100400000365

-2-

 

For the purpose of coordinating the relationship between the Power Seller and the Power Purchaser,
specifying the rights and obligations of both Parties, establishing the normal relationship among
power generation, power purchase and power supply, and smoothly carrying out sale and purchase of
power, in accordance with the Contract Law of the People’s Republic of China, the Electric Power
Law of the People’s Republic of China, the Interim Measures on the Mediation of Power Disputes, the
Regulation on the Supply and Use of Power, the Administration Regulation on Grid Dispatching, and
other relevant laws and regulations, on the principle of equality and willingness, the Power Seller
and the Power Purchaser, after consultations, have entered into the following agreement to be
jointly observed and strictly implemented (“this Agreement”):

	1.	 	 Definition and Interpretation
	 
	1.1	 	Unless the context otherwise requires, the terminologies of this Agreement shall be
defined as follows:
	 
	1.1.1	 	“Power Plant” refers to the power generation facilities with the total
installed capacity of 25,000 kw (with the capacity of 12,500 kw per unit, the total
number of generators is two, specifically, No.1 and 2) owned, constructed, operated and
managed by the Power Seller and all auxiliary facilities stretching to the Division
Point of Property, which are located within Yunhe County, Zhejiang Province.
	 
	1.1.2	 	“Annual Actual On-grid Electricity Output” refers to the electricity
output transmitted to the Power Purchaser at the Metering Point each year. The metering
unit for electricity output is kwh.
	 
	1.1.3	 	“Power Purchaser’s Cause” refers to the requirements raised by or
liabilities assumed by the Power Purchaser, including the liabilities assumed by the
Power Purchaser due to the failure to implement relevant State provisions and standards,
etc., which results in the enlargement of the scope of accidents.
	 
	1.1.4	 	“Power Seller’s Cause” refers to the requirements raised by or
liabilities assumed by the Power Seller, including the liabilities assumed by the Power
Seller due to the failure to implement relevant State provisions and standards, etc.,
which results in the enlargement of the scope of accidents.
	 
	1.1.5	 	“Metering Point” refers to the points on which the electric energy
metering devices are installed as indicated on Appendix II hereto. Metering points are
generally located at the division point of property of both Parties. In the event that
the electric energy metering devices cannot be installed at the division point of
property of both Parties, then the installation point shall be

-3-

 

	 	 	determined by both Parties through consultation.
	 
	1.1.6	 	“Grid Connection” refers to the transmission of the power generated by
the Power Seller to the Power Purchaser’s grid.
	 
	1.1.7	 	“Method of Grid Connection” refers to the method for the connection
between the Power Plant of the Power Seller and the grid of the Power Purchaser.
	 
	1.1.8	 	“Division Point of Property” refers to the division point of the assets
of the Power Seller and the assets of the Power Purchaser.
	 
	1.1.9	 	“Regulations” refers to all laws, administrative regulations, rules,
provisions, policies, decrees, orders, instructions, notices, requirements,
interpretations, etc. promulgated by the State, government and government departments.
	 
	1.1.10	 	“On-grid Output” refers to the electricity output transmitted to the Power
Purchaser’s grid by the Power Plant of the Power Seller.
	 
	1.1.11	 	“Grid Supply Output” refers to the electricity output transmitted to the Power
Plant of the Power Seller from the grid of the Power Purchaser.
	 
	1.1.12	 	“CT” refers to current transformer.
	 
	1.1.13	 	“PT” refers to potential transformer.
	 
	1.1.14	 	“Power Factor” refers to the factor of power.
	 
	 	 	“Average Monthly Power Factor” refers to the monthly average of the factor of
power, which may be calculated in accordance with the following formula:
	 
	 	 	Average Monthly Power Factor =active component of current month/
	 
	 	 	
	 
	1.1.15	 	“On-grid Tariff” refers to the tariff executed for the purchase of power by
the Power Purchaser from the Power Seller.
	 
	1.1.16	 	“Grid Supply Tariff” refers to the tariff executed for the purchase of power
by the Power Seller from the Power Purchaser.
	 
	1.1.17	 	“On-grid Electricity Fees” refers to the fees paid to the Power Seller for the
purchase of On-grid Output by the Power Purchaser.

-4-

 

	1.1.18	 	“Grid Supply Electricity Fees” refers to the fees paid to the Power Purchaser
for the purchase of Grid Supply Output by the Power Seller.
	 
	1.1.19	 	“Peak Period” refers to 8:00 to 22:00
	 
	 	 	“Valley Period” refers to 22:00 to 8:00 of the next day
	 
	1.1.20	 	“Force Majeure” refers to the objective events which cannot be predicted,
avoided or overcome, including eruption of volcano, tornado, tsunami, snowstorm,
mudslide, landslide, flood, fire, failure of water to reach the designed standard,
earthquake, typhoon, thunder and lightening and fog flash beyond the designed standard,
nuclear radiation, war, plague, turbulence etc.
	 
	1.2	 	Interpretation
	 
	1.2.1	 	This Agreement shall be binding on the legal successor or assignee of any Party,
unless otherwise agreed by the Parties. When the circumstance provided in this paragraph
occurs, relevant obligors shall perform necessary notification obligation and perfect
legal procedures in accordance with law.
	 
	1.2.2	 	Unless the context otherwise requires, the day, month and year referred to in
this Agreement shall refer to the day, month and year of the Gregorian calendar.
	 
	1.2.3	 	The word “include” in this Agreement refers to including without limitation.
	 
	2.	 	 Obligations of both Parties
	 
	2.1	 	The obligations of the Power Purchaser shall include the following:
	 
	2.1.1	 	To purchase the electricity generated by the Power Plant owned by the Power
Seller in accordance with the plan of generation output made by relevant governmental
authority.
	 
	2.1.2	 	To comply with the Grid Connection and Dispatching Agreement entered into by and
between both Parties, operate and maintain relevant transmission and transformation
facilities in accordance with the standards of the State and power industry, and
maintain the safety, high grade and economic operation of power system.
	 
	2.1.3	 	To implement power dispatching and information disclosure publicly,

-5-

 

	 	 	impartially
and fairly in accordance with relevant State provisions and to furnish relevant
information concerning electricity utilization load, reserve capacity, operational
status of transmission and transformation facilities, etc. so as to perform this
Agreement.
	 
	2.1.4	 	To provide the Power Seller with the power needed for the re-start of generator
units of the Power Plant in accordance with relevant State provisions or agreements of
both Parties.
	 
	2.1.5	 	To strictly execute the Administration Regulation on Grid Dispatching, the Rules
on the Power System Dispatching of Zhejiang Province, and administration systems of
power production and operation.
	 
	2.1.6	 	To comply with the unified administration of power grid and to execute the
Notice concerning Administration Regulations on the Operation of the Connection of Power
Plants of Zhejiang Province, Local Grids and Zhejiang Grid (Trial).
	 
	2.2	 	The obligations of the Power Seller shall include the following:
	 
	2.2.1	 	To sell the electricity which is in compliance with the standards of the State
and power industry to the Power Purchaser in accordance with this Agreement.
	 
	2.2.2	 	To observe the Grid Connection and Dispatching Agreement entered into by and
between both Parties, to follow the uniform power dispatching, and to strictly execute
the Administration Regulation on Grid Dispatching, the Rules on the Power System
Dispatching of Zhejiang Province, and administration systems of power production and
operation; to operate and maintain the Power Plant in accordance with the standards of
the State and power industry and dispatching rules so as to ensure the operational
capacity of generator units to reach the requirements of technical standards and rules
issued by relevant government departments of the State, and maintain the safe, high
quality and economic operation of power system.
	 
	2.2.3	 	To provide the Power Purchaser with production report forms, reliability index
of generator units of the Power Plant and the operational status of the facilities every
month.
	 
	2.2.4	 	To disburse reasonable cost incurred by the Power Purchaser for the provision of
auxiliary service with consideration as required in accordance with relevant State
provisions.
	 
	2.2.5	 	Not to carry out power supply business directly with the customers.

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	2.2.6	 	To install electric power load control device and information collection device
of the Power Plant in accordance with the State provisions, to be responsible for the
protection and monitoring of the normal operation of the devices mentioned above; and in
case of abnormity, to notify the Power Purchaser in a timely fashion. In the event that
the aforesaid devices are damaged due to the Power Seller’s Cause, the Power Seller
shall be liable for compensation. The Power Purchaser shall be responsible for the
maintenance and management of the electric energy metering device, electric power load
control device and information collection device of the Power Plant which have been
installed.
	 
	2.2.7	 	To strictly execute the active curve, voltage curve and power factor curve
ordered by the Power Purchaser for grid connection.
	 
	2.2.8	 	To formulate the on-site operational manuals and security measures for the safe
operation of the Power Plant which shall be filed with the Power Purchaser for record
and which shall not be in conflict with the aforesaid provisions and the terms of this
Agreement.
	 
	3.	 	 Method and Capacity of Grid Connection
	 
	3.1	 	Method of Grid Connection: the grid connection voltage level of the Power Seller is 110 kv.
The power generated by Party B can be connected to 110 kv Yunhe Substation for Grid Connection
through 110kv Shahe 1067 Line.
	 
	3.2	 	Capacity of Grid Connection: 25,000kw, including two generator units with a unit capacity of
12,500kw.
	 
	4.	 	 Division of Property and Maintenance & Management
	 
	4.1	 	The Division Point of Property shall be set at the connection point of the down lead of No.1
standard bar at the interval line of 110kv Shahe 1067 Line outside of the wall of 110 kv Yunhe
Substation.
	 
	4.2	 	Scope for the liability of maintenance and management of the facilities: Party A shall be
responsible for the section beside the substation where the Division Point of Property is
located and Party B shall be responsible for the rest.
	 
	5.	 	 Metering of Electric Power

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	5.1	 	The Metering Point of On-grid Output and Grid Supply Output of the Power Plant shall be set
at the following point:

	 	(1)	 	the interval of 110 kv Yunhe Substation 110kv Shahe 1067 Line, the no-load voltage
ratio of CT shall be 600/5=120, the comprehensive no-load voltage
ratio=120×1,100=132,000;
	 
	 	(2)	 	the interval of the Step-up Substation of Shapulong Power Plant 110 kv Jinsha 1090
Line, the no-load voltage ratio of CT shall be 400/5=80, the comprehensive no-load
voltage ratio=80×1,100=88,000;
	 
	 	(3)	 	the interval of the Step-up Substation of Shapulong Power Plant 10 kv Yuesha 101
Line, the no-load voltage ratio of CT shall be 100/5=20, the comprehensive no-load
voltage ratio=20×100=2,000;
	 
	 	(4)	 	according to the agreement entered into between Party B and Jinkengkou Power Plant,
the metering electricity output of the interval of Jinsha 1090 Line needs to assume 1.1%
line loss of Shahe 1067 Line;
	 
	 	(5)	 	according to the agreement entered into between Party B and Yuewan Power Plant, the
metering electricity output of the interval of Yuesha 101 Line needs to assume the line
loss of Shahe 1067 Line and loss of step-up substation, namely, 1.5% in aggregate.

	5.2	 	The electric energy metering devices shall include kilowatt-hour meter, potential voltage
transformer for metering, current transformer, secondary circuit and electric energy metering
tank/case, etc. The metering checking department of the Power Purchaser (the metering
institute authorized by the State) shall be responsible for the checking, installation,
replacement and sealing of the electric energy metering devices and both Parties may supervise
it on the spot. The Power Seller may, when necessary, install self-equipped electric energy
metering devices on the non-metering points so as to verify the accuracy of the metering
devices of the Power Purchaser, (provided that the quality of such devices shall be subject to
the examination of the legal or authorized metering checking institute of the State). In case
of any default to the metering devices of the Power Purchaser, the data on the metering
devices of the Power Seller may be used for reference.
	 
	5.3	 	The Power Purchaser shall enseal the kilowatt-hour meter, the front and back door of the
electric energy metering screen (tank/case) (including marshal panel and rosette of CT circuit
terminal), PT terminal tank (including PT metering
circuit fuse) and the knife of differential pressure transmitter, all of which shall not be
unsealed by the Power Seller without permission except under emergency circumstances. In the
event that the Power Seller must unseal such devices mentioned above under emergency
circumstances, it shall report to the Power 

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	 	 	Purchaser within twelve (12) hours after the
unsealing and provide the Power Purchaser with relevant evidential documents or records
regarding the occurrence of the emergency.
	 
	5.4	 	Treatment of metering abnormality. In the event that any Party finds any abnormality or
default to the electric energy metering devices which affects the metering of electric energy,
such Party shall notify the other Party and the metering examination institute recognized by
both Parities immediately so as to jointly find out the problems and to restore the normal
metering as soon as possible.
	 
	 	 	Under normal circumstances, the settlement electricity output shall be determined based on the
data indicated on the main meter of trade settlement metering point. In the event that the
main meter appears abnormal, then the data indicated on the sub-meter shall prevail. In the
event that both the main meter and sub-meter of trade settlement metering point appear
abnormal, the data indicated on the main meter of the counterparty shall prevail. In case that
the main meter of the counterparty appears abnormal, then the data indicated on the sub-meter
of the counterparty shall prevail. As for other abnormal circumstances, on the basis of fully
consultations between both Parties, the electricity output within the abnormal period shall be
determined in accordance with the information provided by the no-voltage records and
no-voltage time metering devices, etc.
	 
	6.	 	 Purchase and Sale of Electricity Output
	 
	6.1	 	Purchase and sale of On-grid Output
	 
	6.2	 	The Power Purchaser shall approve the On-grid Output plan of the Power Seller within
different period of time each month in accordance with the requirements of safe operation of
the grid. The Power Seller shall strictly generate power in accordance with the On-grid Output
plan index approved by the Power Purchaser.
	 
	6.3	 	On-site excerption date of the settlement electricity output. Prior to the startup operation
of distant terminal of electric energy output of the Power Purchaser, the recorded data shall
be the data at 24:00 indicated in the clause (3) by using the frozen function of the
kilowatt-hour meter and shall be written down on the spot the next day as agreed by the staff
of both Parties.
	 
	6.4	 	In the event that the On-grid Output exceeds the index of the monthly plan
arranged by the Power Purchaser due to the Power Seller’s Cause, the Power Purchaser will not
purchase the portion of the On-grid Output exceeding 3‰ of the planned index; in the event
that the On-grid Output exceeds the index of the monthly plan arranged by the Power Purchaser
due to the Power Purchaser’s

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	 	 	Cause, the Power Purchaser shall purchase the exceeding portion. However, the total On-grid
Output of the year of the Power Seller shall not exceed the planned index arranged by the
Power Purchaser.
	 
	6.5	 	In the event that the On-grid Output is below the index of the monthly plan due to the Power
Purchaser’s Cause, as for the difference between the On-grid Output and the index of the
monthly plan, the Power Purchaser agrees to transfer such difference for the usage of next
month. In the event that the On-grid Output is below the index of the monthly plan arranged by
the Power Purchaser due to the Power Seller’s Cause, such difference of current month shall be
cancelled.
	 
	6.6	 	The Power Seller shall generate power in strict compliance with the active curve, and power
factor curve of daily power generation instructed by the Power Purchaser and transmit the
qualified on-grid electric power to the Power Purchaser. The permitted deviation of power
generation active curve is ±3% and the Power Purchaser will not pay fees for the portion
above 3% of the power generation active curve, and deduct the deficiency electricity portion
below 3% of the power generation active curve correspondingly from the index of current month
electricity.
	 
	 	 	The permitted deviation of power factor curve is ±0.01 and the active electricity output
generated during the period over the permitted deviation shall be calculated on 0.8 times.
	 
	 	 	In the event that the operation of the Power Seller is over the ±3% of active curve and
±0.01 of power factor curve in accordance with the requirements of the Power Purchaser, then
the On-grid Output shall be settled in accordance with the actual output.
	 
	6.7	 	The Power Purchaser will purchase the electricity from the Power Seller on the principle of
competitive bidding for grid connection when the timing is ripe.
	 
	7. 	 	 Tariff, Electricity Fees and Settlement
	 
	7.1	 	Both the Power Purchaser and the Power Seller shall strictly execute the tariff approved by
the price regulatory authority.
	 
	7.2	 	The peak On-grid Tariff for the power transmitted from the Power Seller to the Power
Purchaser shall be RMB 0.535/kwh and the valley On-grid Tariff shall be RMB 0.268/kwh. The
power transmitted from Power Purchaser to the Power Seller shall execute the uniform
non-industrial tariff of Zhejiang Province.
	 
	7.3	 	In the event that the tariff is adjusted during the valid period of this Agreement,

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	 	 	then the adjusted tariff shall apply.
	 
	7.4	 	The aforesaid tariff shall include taxes.
	 
	7.5	 	The Power Purchaser shall issue the clearance list of the previous month prior to the
10th of each month and the Power Seller shall issue invoice to the Power Purchaser
at the same time and settle the electricity fees with the Power Purchaser on the third month.
The payment shall be delayed accordingly upon statutory holiday and vacation.
	 
	7.6	 	As for the Grid Supply Electricity Fees transmitted from the Power Purchaser to the Power
Seller, the Power Purchaser shall issue electricity fee invoice to the Power Seller prior to
the 10th of the next month and the Power Seller shall pay off such fees prior to
the 10th of each month. The payment shall be delayed accordingly upon statutory
holiday and vacation.
	 
	7.7	 	The Grid Supply Electricity Fees transmitted from the Power Purchaser to the Power Seller
shall be calculated in accordance with the following formula:
	 
	 	 	The Grid Supply Electricity Fees= Grid Supply Electric Energy Fee (1±Adjusted Value of Power
Factor)
	 
	 	 	Among which, Grid Supply Electric Energy Fee= Grid Supply
Output × Grid Supply Tariff
	 
	 	 	Grid Supply Output= Degree of Kilowatt-hour Meter of Active Output Transmitted from 110 kv
Yunhe Substation Shahe 1067 × 132,000 — Degree of Kilowatt-hour Meter of Active Output
Transmitted from Shapulong Power Plant 110 kv Jinsha 1090 Line × 88,000/(1—1.1%)— Degree of
Kilowatt-hour Meter of Active Output Transmitted from Shapulong Power Plant 10 kv Yuesha 101
Line × 2,000/(1—1.5%)
	 
	7.8	 	The On-grid Electricity Fees shall be calculated in accordance with the following formula
when all indexes are in compliance:
	 
	 	 	On-grid Electricity Fees= On-grid Peak Output × Peak Tariff + On-grid Valley Output × Valley
Tariff
	 
	 	 	Among which, On-grid Peak Output= Peak Degree of Kilowatt-hour Meter of Active Output
Transmitted to 110 kv Yunhe Substation Shahe 1067 × 132,000 — Peak Degree of Kilowatt-hour
Meter of Active Output Transmitted to Shapulong Power Plant 110 kv Jinsha 1090
Line × 88,000 × (1—1.1%)— Peak Degree of Kilowatt-hour Meter of Active Output Transmitted to
Shapulong Power Plant 10 kv Yuesha 101 Line × 2,000 × (1—1.5%);

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	 	 	On-grid Valley Output= Valley Degree of Kilowatt-hour Meter of Active Output Transmitted to
110 kv Yunhe Substation Shahe 1067 × 132,000 — Valley Degree of Kilowatt-hour Meter of Active
Output Transmitted to Shapulong Power Plant 110 kv Jinsha 1090 Line × 88,000 × (1—1.1%)—
Valley Degree of Kilowatt-hour Meter of Active Output Transmitted to Shapulong Power Plant 10
kv Yuesha 101 Line × 2000 × (1—1.5%)
	 
	7.9	 	In the event that both Parties cannot reach agreement on the metering of electric energy or
electricity fees, both Parties shall firstly pay off electricity fees on the basis of
settlement list (invoice), thereafter, both Parties shall negotiate on the refund or further
payment of electricity fees in accordance with the provisions of Regulations regarding
electric power and metering.
	 
	 	 	Both Parties agree to keep original materials and records respectively for the examination of
statements and records or double-check of the accuracy of the calculation within the
reasonable scope in accordance with this Agreement.
	 
	8. 	 	Force Majeure
	 
	8.1	 	Both Parties affected by the Force Majeure shall take reasonable measures so as to mitigate
the losses incurred by one Party or both Parties due to the Force Majeure. Both Parties shall
consult, formulate and carry out the remedies and reasonable replacement measures in a timely
fashion so as to mitigate or eliminate the impact caused by the Force Majeure.
	 
	 	 	In the event that the Party affected by the Force Majeure fails to make efforts to take
reasonable measures to mitigate the impact caused by the Force Majeure, then such Party shall
be liable for the expanded losses caused by such failure.
	 
	8.2	 	In the event that the Force Majeure impedes any Party to fulfill its obligations over thirty
(30) days, both Parties shall negotiate and determine whether to continue to perform this
Agreement or to terminate this Agreement. In the event that both Parties fail to reach
agreement on the conditions for the continued performance of this Agreement or the termination
of this Agreement sixty (60) days after the occurrence of the Force Majeure, then any Party
shall have the right to notify the other Party to rescind this Agreement, unless otherwise
provided herein.
	 
	8.3	 	In the event that the Power Seller or Power Purchaser is unable to fulfill its obligations of
the sale or purchase of power under this Agreement due to governmental acts, change of law, or
substantial change of power market, then both Parties shall, on the principle of fairness and
reasonableness, consult with

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	 	 	each other to resolve it as soon as possible, or make proper amendments to this Agreement if
necessary.
	 
	8.4	 	In the event that the occurrence of the Force Majeure impedes any Party to fulfill its
obligations under this Agreement, then such Party may suspend its performance under the
following circumstances:

	 	8.4.1	 	the scale and time of the suspension of performance does not exceed the scale and
time affected by the Force Majeure.
	 
	 	8.4.2	 	the Party affected by the Force Majeure continues to perform its other obligations
which are not affected by the Force Majeure.

	8.5	 	In the event that any Party is unable to fulfill its obligations under this Agreement due to
the Force Majeure, such Party shall immediately notify the other Party. The aforesaid notice
shall describe the nature of the Force Majeure event, the estimated enduring period, and the
actions already taken by the affecting Party for the mitigation of impact.
	 
	9. 	 	Liability for Breach of Contract and Compensation
	 
	9.1	 	In case of breach of contract, the breaching Party shall assume liabilities in accordance
with relevant provisions of the Contract Law of the PRC, the Electric Power Law of the PRC,
the Regulation on the Supply and Use of Power, the Administration Regulation on Grid
Dispatching, the Rules on the Operation of Power Supply, and other relevant laws and
regulations concerning electric power. The breaching Party shall also be liable for the losses
incurred by the other Party.
	 
	9.2	 	With respect to the dispatching contact, both Parties shall enter into a separate dispatching
agreement. In case that the Power Seller does not follow the dispatching instruction by the
Power Purchaser, the Power Purchaser shall have the right to restrict the on-grid load of the
Power Seller, or even to pull brake for disconnection. All consequences thereof shall be
assumed by the Power Seller itself.
	 
	9.3	 	In the event that the Power Seller violates Article 5.3 of this Agreement and unseals the
seal privately, unseals privately the electric power load control device and power plant
information collection device, disconnecting the work power, or take other actions which make
the devices function abnormally, in accordance with Article 100 of the Rules on the Operation
of Power Supply, the Power Seller shall pay RMB5,000 each time to the Power Purchaser as
electricity fees for defaulting usage.

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	9.4	 	In the event that the Power Seller supplies or resupplies in private the power to the power
equipments which have nothing do with the power use of the Power Plant, or introduce other
power source in private, then the Power Seller shall be ordered to remove the connection line,
deliver written statement, and pay RMB500 per kilowatt (kilovar) to the Power Purchaser as
electricity fees for defaulting usage in accordance with the capacity supplied, resupplied or
introduced.
	 
	9.5	 	The Power Seller shall assume full liability if any accident occurs to the system of the
Power Purchaser due to the Power Seller’s Cause.
	 
	9.6	 	If any Party incurs any loss due to any of the following events, the other Party shall not
assume any liability:

	 	(1)	 	Force Majeure;
	 
	 	(2)	 	Any Party’s own fault;
	 
	 	(3)	 	Any third party’s fault.

	10.	 	 Dispute Resolution
	 
	 	 	In case of any dispute arising out of the performance of this Agreement, both Parties shall
resolve it through consultation in accordance with the principles of this Agreement. In the
event that such dispute cannot be resolved through consultation, then both Parties may jointly
apply to the electric regulatory agency for mediation. In case that such dispute cannot be
resolved by mediation, then any Party may bring lawsuit to the people’s court of the signing
place of this Agreement.
	 
	11. 	 	Miscellaneous
	 
	11.1	 	This Agreement shall come into effect after having been signed and sealed by both
Parties. In the event that any Party proposes to amend this Agreement after the
effectiveness of this Agreement, such amendment shall be done in written form and subject
to the agreement reached by both Parties through consultation. In case of changes of
national policies, both Parties shall amend or supplement this Agreement in accordance with
the adjusted policies. The amended or supplementary agreement shall have the same legal
effect as this Agreement.
	 
	11.2	 	Any Party shall not transfer its rights or obligations under this Agreement

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	 	 	without the prior written consent of the other Party.
	 
	11.3	 	In the event that any Party fails to perform its obligations within the agreed time
limit, then the other Party shall have the right to notify such Party in writing to rescind
this Agreement.
	 
	11.4	 	The valid term of this Agreement shall be three (3) years, commencing from October 1,
2008 to September 30, 2011.
	 
	11.5	 	This Agreement shall be signed in two (2) originals and each Party shall hold one (1).
This Agreement shall also be signed in four (4) duplicates and each Party shall hold two
(2). The duplicates shall have the same legal effect as the originals.

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	The Power Purchaser:	 	Lishui Power Industry Bureau

(seal)

Address: No.699, Zhongdong Road, Lishui City

Legal Representative: Du Xiaoping

(Authorized Representative)

			
	The Power Seller:	 	Yunhe County Shapulong Hydropower Generation Co.,

Ltd. (Shapulong Power Plant)

(seal)

Address: No.42, Xinhua Street, Yunhe County

Legal Representative: John D. Kuhns

(Authorized Representative)

October 2008

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