Document:

EX-10.38

Exhibit 10.38

FUJIAN PROVINCE PINGNAN COUNTY POWER SUPPLY CO., LTD.

PINGNAN COUNTY YUANPING HYDROELECTRIC CO., LTD.

POWER PURCHASE AND SALE CONTRACT

FOR

TECHNOLOGICAL UPGRADING PROJECT

OF

YUANPING HYDROPOWER STATION

December 2008

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CONTENTS

	 	 	 	 	 
	CHAPTER I DEFINITIONS AND INTERPRETATIONS
	 	 	4	 
	 
	 	 	 	 
	CHAPTER II REPRESENTATIONS BY BOTH PARTIES
	 	 	5	 
	 
	 	 	 	 
	CHAPTER III OBLIGATIONS OF THE PARTIES
	 	 	5	 
	 
	 	 	 	 
	CHAPTER IV METERING OF ELECTRIC POWER
	 	 	7	 
	 
	 	 	 	 
	CHAPTER V ELECTRICITY OUTPUT
	 	 	11	 
	 
	 	 	 	 
	CHAPTER VI SETTLED ELECTRICITY TARIFF
	 	 	11	 
	 
	 	 	 	 
	CHAPTER VII PAYMENT AND SETTLEMENT FOR ELECTRICITY FEES
	 	 	12	 
	 
	 	 	 	 
	CHAPTER VIII FORCE MAJEURE
	 	 	14	 
	 
	 	 	 	 
	CHAPTER IX LIABILITY FOR BREACH OF CONTRACT
	 	 	16	 
	 
	 	 	 	 
	CHAPTER X EFFECTIVENESS AND VALID TERM
	 	 	17	 
	 
	 	 	 	 
	CHAPTER XI APPLICABLE LAW
	 	 	17	 
	 
	 	 	 	 
	CHAPTER XII MODIFICATION, ASSIGNMENT AND TERMINATION OF THIS
CONTRACT
	 	 	18	 
	 
	 	 	 	 
	CHAPTER XIII DISPUTE RESOLUTION
	 	 	19	 
	 
	 	 	 	 
	CHAPTER XIV MISCELLANEOUS
	 	 	19	 
	 
	 	 	 	 
	APPENDIX I: DIAGRAM FOR METERING POINTS
	 	 	23	 
	 
	 	 	 	 
	APPENDIX II: DIAGRAM FOR CONNECTION AND LIABILITY DEMARCATION OF
JIAYANG TRANSFORMER 
ON 110KV LIJIA LINE
	 	 	24	 

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

POWER PURCHASE AND SALE CONTRACT

This Power Purchase and Sale Contract (hereinafter referred to as this “Contract”) is executed by
and between the following two Parties:

Party A (hereinafter referred to as the “Power Purchaser”): Fujian Province Pingnan
County Power Supply Co., Ltd., a limited liability company registered and established with
the Administration for Industry and Commerce of Pingnan County;

Legal Address: No. 7, Huating Road, Gufeng Town, Pingnan County

Zip Code: 352300

Legal Representative: Wei Nai Sheng

Party B (hereinafter referred to as the “Power Seller”): Pingnan County Yuanping
Hydroelectric Co., Ltd., a joint-stock enterprise registered and established with the
Administration for Industry and Commerce of Ningde City;

Legal Address: Yuanping Village, Shoushan Township, Pingnan County

Zip Code: 352300

Legal Representative: John D. Kuhns.

WHEREAS:

	(1)	 	The Power Seller is currently owning, managing, operating and maintaining the Technological
Upgrading Project of Yuanping Hydropower Station (hereinafter referred to as the “Hydropower
Station”) with the total installed capacity of 16 MW in Yuanping Village, Shoushan Township,
Pingnan County.

	(2)	 	Having been approved by the document with the number of Ping Jing Mao [2005] No. 46 and
confirmed by the document with the number of (Min) Jing Mao Fa Zhan [2006] No. 006, the
Hydropower Station will be connected to the power grid of Pingnan County

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	according to the Grid Connection and Dispatching Agreement and operated on the power grid
operated and managed by the Power Purchaser.

After friendly consultations, on the principles of equality, free will and good faith, both
Parties have reached this Contract 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 Administration Regulations on
the Dispatching of Power Grids and other relevant laws and regulations of the People’s Republic of
China.

CHAPTER I DEFINITIONS AND INTERPRETATIONS

	1.1	 	Unless otherwise required by the context, the following terms used in this Contract

shall have the meanings set forth as follows:

	(1)	 	“Hydropower Station” refers to the power generation facilities with the total installed
capacity of 16 MW (one (1) set of generator unit with the capacity of 16 MW), which is owned,
managed, operated and maintained by the Power Seller and located in Yuanping Village, Shoushan
Township, Pingnan County.

	(2)	 	“Grid Connection and Dispatching Agreement” refers to the agreement entered into by the
Power Purchaser and Power Seller concerning the grid connection and the dispatching
arrangements of the Hydropower Station.

	1.2	 	Interpretations

	1.2.1	 	All headings hereof are only for the convenience of reading and shall not be considered as
part of this Contract or affect the interpretation of this Contract in any way.

	1.2.2	 	This Contract shall have binding force on the assignees of any Party.

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

CHAPTER II REPRESENTATIONS BY BOTH PARTIES

Each Party hereby represents to the other Party that:

	2.1	 	It is an enterprise that has been duly established and validly and legally in existence in
accordance with law, and has the full right to enter into and the ability to perform this
Contract.

	2.2	 	All procedures required for entering into and performing this Contract (including procuring
requisite governmental approvals and relevant licenses and permits, etc.) have been
accomplished and are legal and valid.

	2.3	 	Upon entering into this Contract, no judgments, verdicts, awards or specific administrative
acts have been carried out by any courts, arbitration institutes or administrative organs that
will have material adverse effect on its performance of this Contract.

	2.4	 	All internal authorization procedures required for executing this Contract have been
accomplished and this Contract is signed by its legal representative or authorized proxy. This
Contract shall have binding force on both Parties hereto after it comes into effect.

CHAPTER III OBLIGATIONS OF THE PARTIES

	3.1	 	The Power Purchaser’s obligations shall include the following:

	3.1.1	 	To purchase the electric power generated by the generator units of Hydropower Station of the
Power Seller in accordance with the provisions of this Contract.

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	3.1.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by Party A and Party
B, operate and maintain the power transmission and transformation facilities in accordance
with relevant national standards and electric power industry standards, and maintain the
safety, high quality and economic operation of the electric power system.

	3.1.3	 	To dispatch the electric power and disclose information publicly, justly and fairly
according to relevant regulations of the State, and provide information relating to the power
load, reserved capacity and operational conditions of power transmission and transformation
facilities, etc. for the purpose of performing this Contract.

	3.1.4	 	To provide electric power to the Power Seller for restarting the generator units of the
Hydropower Station according to relevant national regulations.

	3.1.5	 	To compensate the Power Seller for the reasonable fees arising from the paid assistant
services provided by the Power Seller upon the request of the Power Purchaser according to
relevant national regulations.

	3.2	 	The Power Seller’s obligations shall include the following:

	3.2.1	 	To sell to the Power Purchaser the electric power that satisfies the national standards and
the electric power industry standards in accordance with the provisions of this Contract.

	3.2.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by Party A and Party
B, comply with the unified dispatching of electric power, operate and maintain the Hydropower
Station according to national standards, the electric power industry standards and the
dispatching codes, ensure the operational abilities of the power generation units satisfy the
technical standards and rules issued by relevant departments of the State, and maintain the
safety, high quality and economic operation

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	of the electric power system.

	3.2.3	 	To provide to the Power Purchaser with the reliability index and the operational conditions
for the units of the Hydropower Station on a monthly basis, provide information concerning the
defects of facilities in a timely fashion, regularly provide the overhaul plan for the units
of the Hydropower Station, and strictly implement the overhaul plan for the generator units of
the Hydropower Station which has been comprehensively arranged and balanced by the Power
Purchaser and determined by the Parties through consultations.

	3.2.4	 	To compensate the Power Purchaser for the reasonable fees arising from the paid assistant
services provided by the Power Purchaser upon its request according to relevant national
regulations.

	3.2.5	 	Not to conduct the business of supplying power directly to the consumers without the
approvals from relevant authorities of the State.

CHAPTER IV METERING OF ELECTRIC POWER

	4.1	 	Gateway Metering Point
	 
	 	 	The gateway metering point shall be installed according to the Supplemental Agreement on the
Gateway Metering Point Installment, Electricity Output Calculation and Line Loss Calculation
for the Openness of the Temporary Integrated Channel of Pingnan Rongping Supply District.
Details please refer to Appendix I.

	4.2	 	Metering Devices
	 
	4.2.1	 	The metering devices shall be installed and allocated in accordance with the Technical

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	Administration Code of Electric Power Metering (DL / T448-2000) and the Technical Code of
Gateway Metering Devices issued by Fujian Province Electric Power Co., Ltd.(trial version).
Before the metering devices start operation, the Parties hereto shall carry out the
completion acceptance of the metering devices according to the requirements of the Technical
Administration Code of Electric Power Metering (DL / T448-2000) and the Technical Code of
Gateway Metering Devices issued by Fujian Province Electric Power Co., Ltd. (trial version),
and without passing the completion acceptance, the metering devices can not be put into
operation. The wiring terminal, testing terminal on the secondary circuit of the metering
devices and the metering box/tank shall be ready for being sealed with stamps.

	4.2.2	 	The on-grid and off-grid electricity output of the Power Seller shall be measured by two
sets (one set as main meter and the other as assistant meter, both the main and assistant
meters shall be marked clearly and of the same type, specification and grade) of electronic
multifunctional power meters which are capable of bidirectional watt-hour (the accuracy level
is 0.2) metering function and four-quadrant var-hour (the accuracy level is 2.0) metering
function, and such power meters must be capable of the functions needed by the settlement ways
of the electricity fees. The metering devices shall be purchased, installed and owned by the
Power Seller. The Power Seller shall be responsible for the daily maintenance and other
management of the metering devices, and ensure that the metering devices will not suffer from
any damage and the seals and stamps are kept complete and intact.

	4.2.3	 	Before the metering devices are put into operation, the Power Seller shall file a written
application for completion acceptance according to the Administration Regulations on the
Operation of Grid Gateway Metering Devices of Fujian Province, together with the drawings and
other materials of the gateway metering devices. As for those metering devices which do not
conform to the technical codes, the Power Seller shall take active measures to upgrade the
technology. Prior to the acceptance of the upgrading, the Parties shall correct the errors of
the settled output according to relevant laws and

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	regulations of the State.

	4.2.4	 	The Power Seller shall install testing metering points, which shall be installed at the
bus-bar of the same voltage grade as the gateway metering devices. The installment and
allocation of the testing metering devices may refer to the technical requirements of gateway
metering devices.

4.3 Checking and Operational Management of Metering Devices

	4.3.1	 	The metering devices shall be checked and tested by a qualified metering testing agency, and
shall not be installed and put into operation until having been tested to be qualified. All
fees and expenses arising therefrom shall be borne by the Power Seller.

	4.3.2	 	The periodical checking (rotation), the on-site periodical testing and other operational
management of the metering devices shall be carried out by a qualified metering testing
agency which has been jointly entrusted by the Power Purchaser and the Power Seller. All fees
and expenses arising therefrom shall be borne by the Power Seller, and the Power Seller shall
assist in the operations and management of the metering devices.

	4.3.3	 	The periodical checking (rotation) and the on-site periodical testing of the metering
devices shall be carried out in accordance with relevant national and electric power industry
standards, codes and regulations.

	4.3.4	 	After having been checked or tested on site, the metering devices shall be sealed. Neither
the Power Purchaser nor the Power Seller may unseal the devices, change the devices, and its
interconnections or the components of the metering devices without the prior consent of the
other Party. In case of any metering inaccuracy caused by any Party’s unauthorized unsealing
or changing of the devices, its interconnections or components of the metering devices,
besides refunding or compensating relevant electricity fees, the defaulting Party shall be
responsible for all consequences and

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	liabilities arising therefrom.

	4.3.5	 	In order to prevent the metering inaccuracy caused by the break of PT/CT, the Power Seller
shall make at every month the balancing of the electricity output of the bus-bar on which the
metering devices are located.

	4.3.6	 	Any Party may require at any time to check or test the metering devices besides the
periodical testing and checking. All fees and expenses arising therefrom shall be borne by
the Party who proposes such checking or testing.

4.4 Meter Reading

	4.4.1	 	The meter reading day shall be set at the zero hour of the twenty-eighth day of each month.
The electricity output shall be subject to the data read from the energy meters, in the event
that the data recorded in the long-distance power energy billing system could satisfy the
requirements of settling the electricity fees, the electricity fees shall be settled according
to the data recorded in the long-distance power energy billing system. In case the data
recorded in the long-distance power energy billing system differs from the data read from the
energy meters, the data read from energy meters shall be adopted. All of the above-mentioned
data of electricity output shall be signed and confirmed on the spot, photographed and kept
for record by the Power Purchaser and the Power Seller.

4.5 Metering Deviation

	4.5.1	 	In the event that any Party detects the inaccuracy or malfunctions of the metering devices,
it shall immediately inform the other Party, and both Parties shall consult with each other
and determine the resolution as soon as possible. Both Parties may determine the amount of
electricity output during the malfunction or inaccuracy period according to other referential
data. In case of lacking enough referential data to determine the

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	electricity output during the malfunction or inaccuracy period, both Parties shall determine
the electricity output through further consultations.

CHAPTER V ELECTRICITY OUTPUT

	5.1	 	Annual Basic On-grid Electricity Output
	 
	 	 	Following the guidance of the annual electricity generation control plan, on the principle
of “Justice, Fairness and Publicity”, and considering the hydrological condition of the
Hydropower Station, the power supply and demand condition of the whole grid and the
conditions for the safe operation of the grid, etc., the Power Purchaser shall arrange in
detail the monthly electricity generation plan and relevant adjusted plans for the
Hydropower Station of the Power Seller.

	5.2	 	Principles of Allocating the Electricity Output between the New and Old Hydropower
Stations
	 
	 	 	On the premise of ensuring the safety of the grid and facilities and making the best use of
water resources, when arranging the electricity generation plans for the Technological
Upgrading Project of Yuanping Hydropower Station and the Old Yuanping Hydropower Station,
the electricity output generated by the Technological Upgrading Project of Yuanping
Hydropower Station and the Old Yuanping Hydropower Station shall be allocated in principle
in the proportion of 28:72 of the initially designed multi-year average electricity
generation output.

CHAPTER VI SETTLED ELECTRICITY TARIFF

	6.1	 	The on-grid electricity tariff for the units of the Power Seller: in the Power Seller’s
opinion, the on-grid electricity tariff of RMB 0.317/kwh (including value added tax at a

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	rate of 6%) shall be applied for approval, while in the Power Purchaser’s opinion, the
on-grid electricity tariff of RMB 0.26/kwh (including value added tax at a rate of 6%) shall
be applied for approval. The Power Seller and the Power Purchaser agree to temporarily settle
the on-grid electricity tariff at the price of RMB 0.26/kwh before obtaining the approval and
they will finally execute the electricity tariff approved by the competent price regulatory
authority.

CHAPTER VII PAYMENT AND SETTLEMENT FOR ELECTRICITY FEES

	7.1	 	All fees and expenses between both Parties shall be calculated and paid in RMB.
	 
	7.2	 	Calculation of the Electricity Output for Monthly Settlement
	 
	 	 	The electricity output shall be settled in accordance with the Supplemental Agreement on the
Gateway Metering Point Installment, Electricity Output Calculation and Line Loss Calculation
for the Openness of the Temporary Integrated Channel of Pingnan Rongping Supply District.
Details please refer to Appendix I.
	 
	7.3	 	Electricity Fees for On-grid Electricity Output

	7.3.1	 	The Power Purchaser shall pay the electricity fees to the Power Seller in an amount
calculated from the electricity output calculated according to Article 7.2 and the settled
electricity tariff provided in Chapter VI. The Power Seller and the Power Purchaser shall
confirm the amount of liquidated damages provided in the Grid Connection and Dispatching
Agreement every month.

	7.3.2	 	The Power Seller and the Power Purchaser shall complete the annual clearing of the
electricity fees before February 10 of the next year.

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	7.4	 	Payment of Electricity Fees
	 
	 	 	After having read the meters, the Power Seller shall accurately calculate the on-grid
electricity output and the electricity fees, and fill in the Electricity Output Settlement
Sheet and the Electricity Fees Settlement Sheet. After having been confirmed by the Power
Purchaser, the Power Seller shall deliver such Electricity Output Settlement Sheet and
Electricity Fees Settlement Sheet to the Power Purchaser on the same day or on the next
working day.
	 
	 	 	After having received the Electricity Output Settlement Sheet and the Electricity Fees
Settlement Sheet delivered by the Power Seller, the Power Purchaser shall check and confirm
them as soon as possible. In case of any dissidence, the Power Purchaser shall inform the
Power Seller within three (3) working days after the receipt of those settlement sheets.
After having been amended by the Parties through consultations, the Power Seller shall
deliver the amended Electricity Output Settlement Sheet and Electricity Fees Settlement
Sheet to the Power Purchaser. In the event that the Power Purchaser fails to inform the
Power Seller of any dissidence within three (3) working days after the receipt of the
settlement sheets, it shall be deemed as having been confirmed with no dissidence.
	 
	 	 	The Power Seller shall issue the special value added tax invoice ( the date indicated on the
invoice shall be within the month of settlement) based on the settlement sheets which have
been confirmed by the Power Purchaser, and deliver such invoice to the Power Purchaser. After
the receipt of the originals of correct Electricity Output Settlement Sheet, Electricity Fees
Settlement Sheet and special value added tax invoice, the Power Purchaser shall pay off the
electricity fees for that period to the Power Seller according to Article 4 of the document
with the number of Min Dian Jian Jia Cai [2008] No. 61.
	 
	7.5	 	Payment Method

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	The electricity fees paid by the Power Purchaser to the Power Seller shall be directly
remitted to the bank account indicated in the special value added tax invoice of the Power
Seller (or the bank account designated by the Power Seller in written form). The bank
account must be under the name of the Power Seller, otherwise the Power Purchaser shall be
entitled to refuse to pay for the electricity fees.
	 
	7.6	 	Materials and Records
	 
	 	 	The Power Seller and the Power Purchaser agree to keep their 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 VIII FORCE MAJEURE

	8.1	 	Force Majeure refers to the objective events which are unforeseen, unavoidable and
insurmountable. Such events shall include volcano eruptions, tornados, tsunamis, snowstorms,
mudslide, landslide, flood, fire, the earthquakes, typhoons, thunder and lightening, fog
flash, etc. beyond the designed standards, and nuclear radiation, wars, plagues and riots,
etc.

	8.2	 	In the event that any Party’s contractual obligations wholly or partially affected by the
occurrence of an event of Force Majeure , that Party may suspend the performance of its
contractual obligations provided that:

	 	(1)	 	the scope and period for the suspended performance shall not exceed the
reasonable requirements for eliminating the consequences of Force Majeure;

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	(2)	 	the Party affected by the Force Majeure shall continue to perform its other
obligations under this Contract which has not been affected by the Force Majeure;
	 
	 	(3)	 	In case the event of Force Majeure comes to an end, the Party claiming Force
Majeure shall resume the performance of this Contract as soon as possible.

	8.3	 	In the event that any Party is unable to perform this Contract due to Force Majeure, such Party shall inform the other Party in written form as soon as possible. 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 Contract and the
measures it has taken to mitigate the impact of such Force Majeure events.
	 
	 	 	The Party affected by the Force Majeure shall furnish the other Party with an evidential
document 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).
	 
	8.4	 	The Party affected by the Force Majeure shall take reasonable measures to mitigate the losses incurred by the other Party 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 consequences of Force
Majeure.
	 
	 	 	In the event the Party affected by Force Majeure fails to use all its reasonable endeavors
to mitigate the consequences of Force Majeure, that Party shall be responsible for the
enlarged losses arising therefrom.
	 
	8.5	 	In the event that the Force Majeure has prevented a Party from performing its
obligations under this Contract for a continuous period of over sixty (60) days, the

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	Parties hereto shall consult with each other to determine the conditions for continuing the
performance of this Contract or to terminate this Contract. If the Parties hereto fail to
reach agreement concerning the conditions for continuing the performance of this Contract or
the termination of this Contract within one year after the occurrence of the Force Majeure,
any Party shall be entitled to terminate this Contract with a notice to the other Party,
unless otherwise provided herein.

CHAPTER IX LIABILITY FOR BREACH OF CONTRACT

	9.1	 	Principles for Handling Breach of Contract
	 
	9.1.1	 	Any Party’s non-performance of its obligations under this Contract or non-conforming
performance of its obligations shall be deemed as a breach of contract. The breaching Party
shall assume liabilities for breach of contract to the non-defaulting Party, such as to
continue the performance, take remedy measures or compensate for the losses, etc.
	 
	9.1.2	 	In case of any breach of contract, the non-defaulting Party shall immediately take proper
measures to prevent the enlargement of losses. In the event that such Party fails to take
proper measures resulting in the enlargement of losses, it shall not require the defaulting
Party to compensate the enlarged losses.
	 
	9.2	 	In the event that the Power Seller violates the provisions of Article 7.4 of this Contract
and fails to accurately and timely provide the invoices and materials for settlement, the
Power Purchaser may correspondingly postpone the deadline for the payment of electricity fees.
	 
	9.3	 	As for those funds which should have been paid by one Party to the other Party hereto as
provided in this Contract but have not been fully paid off, such Party shall pay liquidated
damages to the other Party in an amount of 0.3‰ of the unpaid portion per day.

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	9.4	 	In the event that any Party violates the provisions of this Contract and causes losses to
the other Party, such Party shall be responsible for the compensation for the losses incurred
by the other Party.
	 
	9.5	 	Both Parties agree that the liabilities for breach of contract which have not been mentioned
under this Contract shall refer to the relevant provisions of the Grid Connection and
Dispatching Agreement.

CHAPTER X EFFECTIVENESS AND VALID TERM OF THIS CONTRACT

	10.1	 	This Contract shall come into effect when it has been signed by the legal representatives or
authorized representatives of both Parties and affixed with the official stamps, and upon the
effectiveness of the Grid Connection and Dispatching Agreement.

	10.2	 	The valid term of this Contract shall be from December 28, 2008 to December 28, 2009.

	10.3	 	Within three (3) months before the expiration of this Contract, both Parties shall negotiate
with each other concerning the extension of this Contract. If both Parties all believe this
Contract needs no amendments, the valid term of this Contract shall be extended to the
expiration date of the operation period of the Hydropower Station. During such extension
period, in the event that any Party proposes a written objection to the other Party, this
Contract shall terminate automatically, and both Parties shall execute a new contract.

CHAPTER XI APPLICABLE LAW

	11.1	 	The establishment, effectiveness, interpretation, performance and dispute resolution shall
be governed by the laws of the People’s Republic of China.

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

CHAPTER XII MODIFICATION, ASSIGNMENT AND TERMINATION

OF THIS CONTRACT

	12.1	 	Any modification, amendment or supplement to this Contract shall be conducted in written
form, and shall come into effect after having been signed by the authorized representatives
of both Parties.
	 
	12.2	 	Both Parties expressly agree that, without the other Party’s prior written consent, any of
them shall not be entitled to assign to any other party all or part of its rights or
obligations under this Contract.
	 
	12.3	 	Within the valid term of this Contract, both Parties agree to adjust or amend this Contract
accordingly under any of the following conditions:

	 	(1)	 	Relevant laws, regulations, rules and polices of the State have been amended;
	 
	 	(2)	 	Relevant rules, measures or regulations, etc. in relation to the power market are
promulgated and implemented by the State power regulatory agency.

	12.4	 	Termination of Contract
	 
	 	 	In the event that any of the following events occurred to any Party, the other Party shall be
entitled to terminate this Contract after having served a notice of termination:

	 	(1)	 	The Power Seller fails to deliver electricity safely as required by this
Contract for a continuous period of sixty (60) days; or the Power Purchaser fails to
receive the electricity normally as prescribed in this Contract for a continuous period
of sixty (60) days (excluding Force Majeure);

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	(2)	 	Any Party goes bankrupt, liquidated or the business license of any Party has been
revoked;
	 
	 	(3)	 	One Party is merged with the other Party or all or majority part of its assets
has been transferred to another entity, and the surviving enterprise cannot reasonably
perform its all obligations under this Contract.

CHAPTER XIII DISPUTE RESOLUTION

	13.1	 	Any dispute arising out of the performance of this Contract or any dispute in relation to
this Contract shall be firstly resolved by both Parties through consultations. If such dispute
cannot be resolved through consultations within thirty (30) days, the Parties shall submit
such dispute to the power regulatory authority of Fujian Province for mediation. In the event
that such dispute cannot be resolved through mediation within sixty (60) days, both Parties
agree to submit the disputes to the Arbitration Committee of Pingnan County for arbitration.
The arbitration award shall be final and binding on both Parties. During the arbitration
process, other than the disputed matter, both Parties hereto shall continue to perform this
Contract.

CHAPTER XIV MISCELLANEOUS

	14.1	 	Liability Demarcation
	 
	 	 	The liability demarcation point of 110kv Lijia Line shall refer to Appendix II for details
and the liability shall be demarcated as follows:

	 	(1)	 	The liability demarcation point: the property demarcation point shall be at one
meter away from the 1321 Switch on the line connecting Jiayang Substation 110kv bus-bar
jumper and Lijia Line;

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Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	(2)	 	The space electrics and communication equipments of 110kv Lijia Line which belong
to Party B shall be entrusted by Party B on its own expense to Party A for the operation
and maintenance management (the agreement entrusting Party A to manage the operation and
maintenance shall be signed separately);
	 
	 	(3)	 	The equipments one meter away from the space gantry of Lijia Line directing to
the grid shall be operated and maintained by Party B itself (the 110kv Lijia Line
operation demarcation agreement shall be signed separately).

	14.2	 	Confidentiality
	 
	 	 	The Parties warrant that they will keep confidential the materials and documents which are
procured from the other Party and cannot be procured through public channels. Without the
prior approval from the original provider of such materials and documents, the other Party
shall not disclose to any third party all or part of the materials and documents, unless
otherwise provided by laws.

	14.3	 	The Entire Agreement
	 
	 	 	This Contract and its appendices constitute the entire agreement of both Parties pertaining
to the transaction agreed upon in this Contract, and shall replace all previous discussions,
negotiations, agreements and contracts between both Parties to this Contract in respect of
the transaction of this Contract.

	14.4	 	Notification
	 
	 	 	Any notification, document or checked bills pertaining to this Contract shall be conducted
in written form. Documents sent by a registered letter, express mail or sent in person shall
be deemed as having been served after signed and confirmed with the receiver; if sent by
facsimile, the documents shall be deemed as having been served after those documents have
been received. All notifications, documents or checked bills

20

 

Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

	 	 	shall come into effect upon the service or receipt. All notifications, bills, information or
documents shall be sent to the following legal addresses and mail addresses provided in this
Contract, unless one Party issues a written notice to other Party to change its address.

Party A: Fujian Province Pingnan County Power Supply Co., Ltd.

	 	 	 
	Addressee:	 	Lin Xiong Que

	Telephone Number:	 	0593-3304003

	Facsimile Number:	 	0593-3302386

	Zip Code:	 	352300

	Mail Address:	 	No. 7, Huating Road, Gufeng Town, Pingnan County, Fujian Province

	

Party B: Pingnan County Yuanping Hydroelectric Co., Ltd.

	 
	Addressee:	 	John D. Kuhns

	Telephone Number:	 	0593-3325389

	Facsimile Number:	 	0593-3332698

	Zip Code:	 	352300

	Mail Address:	 	the 5th Floor, Cuibai Building, Gufeng Town, Pingnan County

14.5 Text

This Contract shall be signed in six (6) counterparts, with two (2) originals and four (4)
duplicates. Party A and Party B shall each hold one (1) original and two (2) duplicates.

21

 

Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

Party A: Fujian Province Pingnan County Power Supply Co., Ltd.

(Stamp)

Representative: Wei Nai Sheng

Party B: Pingnan County Yuanping Hydroelectric Co., Ltd.

(Stamp)

Representative: Lian Xin Chun

Signing Place and Date: Pingnan County, December 2008

22

 

Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

APPENDIX I: DIAGRAM FOR METERING POINTS

23

 

Power Purchase and Sale Contract for Technological Upgrading Project of Yuanping Hydropower Station

APPENDIX II: DIAGRAM FOR LIABILITY DEMARCATION POINT

DIAGRAM FOR CONNECTION AND LIABILITY DEMARCATION OF JIAYANG SUBSTATION 110KV LIJIA LINE

24EX-10.39

Exhibit 10.39

Contract Serial Number: H Diao Du 091 [2006] No.0338

GRID CONNECTION AND

DISPATCHING AGREEMENT

FOR

SANMING ZHONGYIN BANZHU 
HYDROELECTIRC

CO., LTD.

Fujian Province Sanming Power Industry Bureau

sanming Zhongyin Banzhu Hydroelectric Co., Ltd.

September 2006

1

 

(Agreement Serial Number:     )

GRID CONNECTION AND DISPATCHING AGREEMENT

This Grid Connection and Dispatching Agreement (hereinafter referred to as this “Agreement”) is
executed by and between the following two Parties:

Party A: Fujian Province Sanming Power Industry Bureau, a local power grid operation
enterprise registered with the Administration Authority for Industry and Commerce, with the tax
registration number of 35040215558376, the registered address at No.1032, Liedong
Street, Sanming City, Fujian Province, and Post Code of 365000, the legal
representative of which is Cai Hong Xian.

Party B: Sanming Zhongyin Banzhu Hydroelectric Co., Ltd., a power generation enterprise
with the status of legal entity, registered with the Administration for Industry and Commerce of
Sanming City, Fujian Province, with the registration number of Qi Zuo Ming Zong Fu Zi
No.000597, the registered address at Building 160, Qianlong New Village, Xinshi North Road,
Sanming City, and Post Code of 365000, the legal representative of which is Yao
Zheng Xiang.

WHEREAS:

Party B constructs, owns, operates and manages the Banzhu Hydropower Station (hereinafter referred
to as the “Power Plant”) with a total installed capacity of 45MW in Sanming City, and agrees to
connect the Power Plant to Party A’s grid for operation in accordance with the

2

 

provisions hereof and accept the dispatching management conducted by the dispatching agency of
Party A within its functional area.

In order to ensure the safety, high quality and economic operation of the electric power system,
regulate the dispatching of power grid and grid-connected 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 a “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.

CHAPTER I DEFINITIONS AND INTERPRETATIONS

	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	 	“Fujian Power Dispatching (Trading) Center” (“Provincial Dispatching” for
abbreviation) refers to the agency in charge of the organization, direction and
coordination of the operation of the electric power system of Fujian Province pursuant to
laws.
	 
	 	1.1.2	 	“Sanming Local Dispatching Agency” (“Local Dispatching” for abbreviation) refers to
the Power Dispatching Station of Sanming City in charge of the organization, direction
and coordination of the operation of the electric power system of Sanming area pursuant
to laws.
	 
	 	1.1.3	 	“Power Plant” refers to the power generation facility with all its auxiliary

3

 

	 	 	 	facilities stretching to the property demarcation point with the total installed capacity
of 45 MW (including three (3) generator units, namely, No. 1 generator unit with a
installed capacity of 15 MW, No. 2 generator unit with a installed capacity of 15 MW and
No. 3 generator unit with a installed capacity of 15 MW, the detailed technical
parameters please refer to Appendix II hereto), which is constructed, owned, managed and
operated by Party B and located at Banzhu, Meilie District.
	 
	 	1.1.4	 	“Connection Points” refer to the interconnection points between the Power Plant and the
power grid.
	 
	 	1.1.5	 	“Connection Form” refers to one systematic connection form between the Power Plant
(generator units) and the power grid.
	 
	 	1.1.6	 	“AGC” refers to the Automatic Generation Control.

	 
	 	1.1.7	 	“AVC” refers to Automatic Voltage Control.

	 
	 	1.1.8	 	
 “RTU” refers to Remote Terminal Unit.
	 
	 	1.1.9	 	“Disconnection” insofar as this Agreement is concerned, specially refers to the electric
interruption of the connection between the power grid and the power generation equipments
which are interconnected to the power grid for operation.
	 
	 	1.1.10	 	“Special Operation Mode” refers to the operation arrangement for the abnormal line
connection mode of the Power Plant or the power grid, which is different from the normal line
connection mode, as a result of certain demand.
	 
	 	1.1.11	 	“Unit Available Capacity” refers to the output of the generator units modified at any time
due to the restrictions of the equipment conditions (including the restrictions of water
condition, shipping and etc. on the output of the generator units).
	 
	 	1.1.12	 	“Planned Outage” refers to the status of the units of the Power Plant 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-peak period, the shutdown reserve,

4

 

	 	 	 	and etc. which are required by Sanming Local Dispatching Agency.
	 
	 	1.1.13	 	“Unplanned Outage” refers to the unavailable status of the units of Power Plant other than
Planned Outage. Based on the outage urgency, the Unplanned Outage can be classified into five
categories: (1) immediate outage; (2) the outage 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.
	 
	 	1.1.14	 	“Forced Outage” refers to the categories 1, 2 and 3 of the Unplanned Outage set forth in
1.1.13.
	 
	 	1.1.15	 	“Equivalent Unit Derated Hours” refers to the outage hours calculated in accordance with the
maximum output on the nameplate, which are converted from the derated output hours.
	 
	 	1.1.16	 	“Equivalent Unplanned Outage Hours” refers to the sum of the hours for the Unplanned Outage
and unplanned Equivalent Unit Derated Hours.
	 
	 	1.1.17	 	“Daily Generation Dispatching Plan Curve” refers to the curve worked out by Sanming Local
Dispatching Agency on a daily basis for the determination of the generation output of the
Power Plant for each period of time of the next day in accordance with the daily generation
dispatching plan curve for Shaxi river valley released by the Provincial Dispatching.
	 
	 	1.1.18	 	“Emergencies” refer to the material accidents occurred to the power generation or supply
facilities within the power system, including the conditions of 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
stability 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.
	 
	 	1.1.19	 	“Dispatching Regulations for Electric Power System” (hereinafter referred to

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	 	 	 	as “Dispatching Regulations” or “Grid Dispatching Regulations”) refers to the
regulations formulated in accordance with the Administration Regulations on the
Dispatching of Power Grids, the national standards and the electric power industry
standards, in order to regulate the power system dispatching and operation activities
of the electric power system within the local area. The Dispatching Regulations include
the Power System Dispatching Regulations of Fujian Province and the Power System
Dispatching Regulations of Sanming District.
	 
	 	1.1.20	 	“Party A’s Reason” refers to the requirements of Party A or liabilities attributed to
Party A, including the liabilities which shall be assumed by Party A for the enlargement
of accident due to Party A’s failure to perform relevant national regulations and
standards, etc.
	 
	 	1.1.21	 	“Party B’s Reason” refers to the requirements of Party B or liabilities attributed to
Party B, including the liabilities which shall be assumed by Party B for the enlargement
of accident due to Party B’s failure to perform relevant national regulations and
standards, etc.
	 
	 	1.1.22	 	“Power Purchase and Sale Contract” refers to the contract entered into by and between
Party A and Party B regarding the purchase and sale of the electricity output generated
by the Power Plant and other relevant commercial issues.
	 
	 	1.1.23	 	“Force Majeure” refers to the objective conditions which are unforeseen, unavoidable
and insurmountable, including volcano eruptions, tornados, tsunamis, snowstorms,
mudslides, landslides, flood, fire, water inflows below the designed standards, and
earthquakes, typhoons, thunder and lightening and fog flash, etc. with an intensity over
the designed standards, and nuclear radiation, wars, plagues and riots, etc.

	1.2	 	Interpretations

	 	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.

6

 

	 	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 words “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 THE 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 with
laws, which has the full right to execute and the capability 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 accomplished legally and validly.

	2.3	 	Upon the execution of this Agreement, no judgment, verdict, award or specific administrative
activity has been issued or conducted by any courts, arbitration institutes, administrative
authorities or other supervisory bodies that is sufficient to

7

 

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	 	Both Parties shall abide by the national laws, regulations, electric power industry
standards, and relevant policies, regulations and administrative measures formulated and
issued by the power administration authority of the State or Fujian Province with respect to
the basic construction, operation, maintenance, dispatching and management.
	 
	 	 	In addition, both Parties shall abide by the regulations, rules and administrative measures
and other regulative document in relation to technology regulations and operation
management which are formulated by the grid company of the State or Party A to ensure the
safe and stable operation of the power grid, presently those documents mainly include:

	 	(1)	 	The Power System Dispatching Regulations of Fujian Province and the Power
System Dispatching Regulations of Sanming District;
	 
	 	(2)	 	The Regulations on the Safe and Stable Operation of the Power System of
Fujian Province;
	 
	 	(3)	 	The Regulations on the Management of the Relay Protection and Automatic
Safety Devices of the Power System of Fujian Province;
	 
	 	(4)	 	The Implementation Rules on the Main Points of the Counter-accident Measures
for the Relay Protection and Automatic Safety Devices of the Power

8

 

	 	 	 	System of Fujian Province;
	 
	 	(5)	 	The Implementation Rules on the Technology Supervision for the Relay
Protection and Automatic Safety Devices of the Power System of Fujian Province;
	 
	 	(6)	 	The Administration Rules on the Setting Calculation of the Relay Protection
of the Power System of Fujian Province;
	 
	 	(7)	 	The Grounding Scheme for the Secondary System of the Relay Protection of the
Power System of Fujian Province;
	 
	 	(8)	 	The Administration Regulations for the Operation of the Power Grid
Dispatching Automatization System of Fujian Province;
	 
	 	(9)	 	Relevant Counter-accident Measures in connection with the Power Grid of
Fujian Province Power Co., Ltd.

	 	 	During the period for the performance of this Agreement, in case of any amendments to the
above-mentioned regulations, rules and administrative measures, the amended regulations,
rules and administrative measures shall be implemented.

	3.2	 	Unless otherwise expressly provided in this Agreement, the obligations of Party A shall
include:

	 	3.2.1	 	Under the unified direction and coordination of the Provincial Dispatching,
Sanming Local Dispatching Agency shall carry out unified dispatching for the grid within
its dispatching area, be responsible for the operation and management of the relevant
equipments and facilities relating to the power grid within its controlled area to
fulfill the requirements for the normal operation of the Power Plant and the power grid.
	 
	 	3.2.2	 	To strictly abide by the laws, regulations, rules, standards, codes, provisions,
administrative measures and etc. provided in the Article 3.1 hereof and carry out the
unified dispatching accordingly on the principle of fairness, justice, publicity,
economy and reasonableness.

9

 

	 	3.2.3	 	To reasonably arrange the active and reactive outputs of the Power Plant on the
basis of the Daily Generation Dispatching Plan Curve of Shaxi water valley released by the
Provincial Dispatching and incorporation with the actual operation condition of the power
grid under its dispatching;
	 
	 	3.2.4	 	To carry out unified arrangement for the power generation, frequency modulation, voltage
regulation, reserve and etc. of the Power Plant to satisfy the safe and stable operation and
qualified power energy of the power grid under its dispatching;
	 
	 	3.2.5	 	To take measures to prevent the occurrence of accidents which would affect the safety
operation of the power system under its dispatching, to carry out special and professional
safety inspections concerning the grid safety in coordination with the arrangement of the
Provincial Dispatching, and formulate counter-accident measures as required, and carry out
the grid-plant unified counter-accident rehearse plan in coordination with the Provincial
Dispatching and organize and implement accordingly. In case of the occurrence of any accident
that affects the safe and stable operation of the power grid, Party A is entitled to
participate in the accident investigation and accident analysis;
	 
	 	3.2.6	 	To arrange the equipment overhaul of the Power Plant in time according to the Dispatching
Regulations and overhaul regulations, and the tendency of the non-emergency defects of the
equipment of the Power Plant advanced by Party B, subject to the actual conditions of the
operation of the power grid under its dispatching;
	 
	 	3.2.7	 	To support and coordinate with Party B for the technological improvement and parameters
adjustment implemented to certain equipments; to direct and coordinate the dispatching,
operation and management of Party B in relation to the grid under the dispatching of Party A;
to conduct direction and coordination to the electric equipments, relay protection and
automatic safety devices, excitation system and speed governor system, power dispatching
communication, dispatching automatization and other relevant specification and business
during the operation of the Party B, which are related to the safe operation of the power

10

 

	 	 	 	grid under Party A’s dispatching; and to conduct statistical examination on the
equipment operation conditions of the Power Plant in accordance with relevant
regulations;
	 
	 	3.2.8	 	To circulate the defects information of the material equipments of the power grid
related to Party B and the power transmission capacity of the channels related to Party
B according to relevant regulations in a timely fashion, and disclose the power
dispatching information related to Party B twice every year;
	 
	 	3.2.9	 	To cooperate with Party B in respect of the investigations on accidents.

	3.3	 	Unless otherwise expressly provided in this Agreement, the obligations of Party B shall
include:

	 	3.3.1	 	To obey the unified dispatching of Sanming Local Dispatching Agency, reasonably
organize the production of the Power Plant, and strictly abide by the Dispatching
Regulations and the dispatching directions.
	 
	 	3.3.2	 	To work out the field operation regulations in full compliance with the power
system regulations and rules of Party A, which shall be revised every four years, and to
file the aforesaid regulations with Party A.
	 
	 	3.3.3	 	According to the requirement of Sanming Local Dispatching Agency, to provide
proposals concerning the equipment overhaul plans for the Power Plant, to implement the
approved overhaul plans, and organize the overhaul and maintenance work for the
equipments.
	 
	 	3.3.4	 	To timely carry out technological improvements or parameter adjustments for the
equipments according to the needs, and file such improvements or adjustments with Party A
(in case of involving grid safety, the approval from Party A must be procured).
	 
	 	3.3.5	 	To take measures to prevent accidents that may affect the operation safety of the
electric power system, to cooperate with Party A for the periodic special and professional
safety inspections relating to the grid safety, and implement the

11

 

	 	 	 	precaution measures proposed during the inspections; in case of any specific
counter-accident measures or other requirements for the electric power system safety
issued by Sanming Local Dispatching Agency, to implement and maintain the operations
according to such requirements; to file relevant documents of safety measures to Sanming
Local Dispatching Agency; and to participate in the joint counter-accident rehearsal
organized by Sanming Local Dispatching Agency.
	 
	 	3.3.6	 	In case of the occurrence of any material defects or hidden dangers of the material
equipments of the Power Plant, to settle it in a timely fashion according to the electric
power industry standards and Dispatching Regulations, and report the actual conditions to
Sanming Local Dispatching Agency; in addition, to notify Sanming Local Dispatching Agency the
settlement result upon the completion of such settlement.
	 
	 	3.3.7	 	To operate in accordance with the daily dispatching plan issued by Sanming Local Dispatching
Agency, modulate the frequency and regulate the voltage according to the dispatching direction
of Sanming Local Dispatching Agency, participate in the frequency modulation, voltage
regulation of the power grid and undertake the basic reserve power volume of the power grid
and other basic auxiliary services of the power grid.
	 
	 	3.3.8	 	To provide Sanming Local Dispatching Agency with the operating conditions of the equipments
of the Power Plant and the production information including the water resources, statements
and etc. timely and accurately in accordance with requirements indicated in documents issued
by Sanming Local Dispatching Agency on the basis of the stipulations provided in Article 3.1
hereof, and ensure the accuracy of the information provided.
	 
	 	3.3.9	 	To provide a full cooperation and support for the accidents investigations and analysis in
which Party A participates.
	 
	 	3.3.10	 	Within the valid term of this Agreement, in the event that Party A needs to add facilities
and equipments within the Power Plant or counter-accident measures and technological
improvements, etc. due to the requirements of the safe and

12

 

	 	 	 	stable operation of the power grid or other requirements to the Power Plant, to take
charge of the implementation and operation maintenance and bear the corresponding fees
and costs in accordance with the requirement advanced by Sanming Local Dispatching
Agency.
	 
	 	3.3.11	 	To participate in the professional conferences, counter-accident rehearsal and
technology training organized by Sanming Local Dispatching Agency; and to accept the
centralized management and supervision in respect of the professional technology, such as
operation dispatching, system stability, relay protection, communication, automatization,
reservoir dispatching and etc.
	 
	 	3.3.12	 	To provide training services for the field professional technology to the on-duty staff
for the dispatching operation of Party A.

CHAPTER IV CONDITIONS FOR GRID CONNECTION

	4.1	 	The primary and secondary equipments of Party B shall conform to the national standards, the
electric power industry standards and other relevant regulations (refer to the
counter-accident measures to prevent occurrence of the equipment flashover, electric
mis-operation and malfunction or missing operation of relay protection and automatic safety
devices, etc.), the equipment setting values have been set as required by the dispatching
range division with all conditions available for being connected to the power grid of Party A
and accepting the unified dispatching by Sanming Local Dispatching Agency.

	4.2	 	The relay protection and automatic safety devices (including the excitation system and speed
governor system) of the Power Plant shall conform to the national standards, the electric
power industry standards and other relevant regulations.

13

 

	4.3	 	The dispatching automatization facilities of the Power Plant, including the computer
monitoring system, power output metering devices and etc., shall conform to the national
standards, the electric power industry standards and other relevant regulations.

	4.4	 	The power dispatching communication facilities of the Power Plant shall conform to the
national standards, the electric power industry standards and other relevant regulations.

	4.5	 	The electricity energy metering devices of the Power Plant shall be configured according to
the Technical Administration Code of Electric Power Metering Devices (DL / T448-2000) and the
Power Purchase Contract, and pass the testing and acceptance jointly organized by both
Parties.

	4.6	 	According to 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 of the State Economic and Trade Commission) and relevant regulations, the secondary
system of the Power Plant have already carried out the safety precaution measures, which have
been approved by Sanming Local Dispatching Agency and available for operation.

	4.7	 	All operation and overhaul regulations for the Power Plant have been formulated and relevant
management regulations are complete.

	4.8	 	The names and serial numbers for the equipments of the Power Plant shall be indicated in
eye-catching places of the corresponding electric equipments in accordance with the names and
serial numbers released by Sanming Local Dispatching Agency.

14

 

	4.9	 	The on-duty operator of the Power Plant with the authority to take dispatching
directions shall, pursuant to the provisions of the Administration Regulations on the
Dispatching of Power Grids and other relevant regulations, receive the training organized
by the Provincial Dispatching or Local Dispatching, and procure relevant qualification
certificates for the positions.

	4.10	 	The primary and secondary equipments of Party B being operated in conjunction with the system
of Party A shall conform to the national standards, the electric power industry standards and
other relevant regulations.

	4.11	 	Both Parties have worked out relevant counter-accident measures against possible Emergencies
after the grid connection of the Power Plant, and such measures shall be filed with Sanming
Local Dispatching Agency.

	4.12	 	After the issuance of the rectification opinion letter, Sanming Local Dispatching Agency is
entitled to refuse the production of the generator units for operation, which could not reach
the conditions for independent operation in safety and the requirements of the dispatching
communication and power grid automatization.

CHAPTER V GRID CONNECTION APPLICATION AND ACCEPTANCE

(OMITTED)

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CHAPTER VI GRID CONNECTION AND DISPATCHING DURING THE

COMMISSIONING PERIOD

(OMITTED)

CHAPTER VII OPERATION UNDER DISPATCHING

	7.1	 	During the operation period, the on-duty operators of the Power Plant shall strictly follow
the dispatching directions given by the on-duty dispatchers of Sanming Local Dispatching
Agency.

	 	7.1.1	 	The Power Plant must implement the dispatching directions released by the Sanming
Local Dispatching Agency in a prompt and accurate manner, and shall not refuse or delay
such implementation with any excuse. In case that the implementation of the dispatching
direction may endanger the personnel or equipments, the on-duty operators of the Power
Plant shall immediately report to the on-duty dispatchers of Sanming Local Dispatching
Agency with the reasons, and the on-duty dispatchers of Sanming Local Dispatching Agency
shall be entitled to determine whether to continue such implementation or not.
	 
	 	7.1.2	 	As for those equipments within the scope of direct dispatching by Sanming Local
Dispatching Agency, the Power Plant must strictly follow the relevant operation rules of
dispatching and carry out operations according to the dispatching directions, and take the
responsibility for the accuracy and timeliness of the dispatching direction
implementation; shall accurately report the field conditions and answer the inquiries from
the on-duty dispatchers of Sanming Local Dispatching Agency. The on-duty staff of the
Power Plant shall not operate the above-mentioned equipments without any dispatching
direction. Only in case of any conditions endangering the safety of the personnel and
equipments according to the field regulations, the on-duty staff may settle it in advance
according to relevant regulations, and shall report to the dispatcher of Sanming Local
Dispatching Agency after the completion of such settlement.

16

 

	 	7.1.3	 	As for those equipments within the permitted range of Sanming Local Dispatching
Agency, the on-duty operators of the Power Plant shall make a report to the on-duty
dispatchers of Sanming Local Dispatching Agency prior to the operations, and operates
such equipments upon the procurement of the approval according to the Dispatching
Regulations and the field operation regulations of the Power Plant.
	 
	 	7.1.4	 	The Power Plant shall ensure the attendance of certain staff with the authority to
take the dispatching directions in central control room at any time applicable for the
communication with the on-duty dispatcher of Sanming Local Dispatching Agency, and the
receiving of the dispatching directions released by Sanming Local Dispatching Agency.

	7.2	 	Sanming Local Dispatching Agency shall reasonably arrange the Daily Generation Dispatching
Plan Curve of the Power Plant according to the daily generation dispatching plan curve of
Shaxi water valley released by the Provincial Dispatching. During the normal operation, the
on-duty dispatcher of Sanming Local Dispatching Agency is entitled to make appropriate
adjustment to the Daily Generation Dispatching Plan Curve according to the actual operation
conditions, and such adjustment shall be notified to the on-duty operators of the Power Plant
five (5) minutes in advance.

	7.3	 	In case of any abnormal condition for the operation of the equipments of the Power Plant,
the Power Plant may, according to the regulations of the Dispatching Regulations, submit the
overhaul application to Sanming Local Dispatching Agency in advance. Sanming Local
Dispatching Agency may, according to the stipulations of the Dispatching Regulations and the
actual conditions of the power grid, approve such overhaul application in advance upon going
through relevant provided procedures and adjust the corresponding plans accordingly. In the
event that the equipments need emergent outage, Sanming Local Dispatching shall make timely
response considering the actual conditions. The Power Plant shall implement

17

 

	 	 	according to the final approval of Sanming Local Dispatching Agency, and in case of any
requirements of the grid operation, Sanming Local Dispatching Agency cannot arrange the
applied overhaul promptly, both Parties shall make a consultation for accident precaution
measures and accident settlement procedures in accordance with the provisions of the
Dispatching Regulations.

	7.4	 	Sanming Local Dispatching Agency shall, on the principle that the generator units on the
same grid, of the same type, with the same technical conditions and the same water valley,
shall be modulated to a basically same extent, with the consideration of the power grid
structure, the requirement of the power grid operation, and the electric technical conditions
of the Power Plant, arrange the Power Plant to be involved in the peak regulation, frequency
modulation, voltage regulation and reserve operation of the electric power system in a safe,
high quality and economic manner.

	 	7.4.1	 	Peak Regulation
	 
	 	 	 	The Power Plant shall participate in the peak regulation of the electric power system
in accordance with relevant national regulation, standards and the capacity of the
generator units. The amplitude of such peak regulation shall reach the relevant
national regulations and standards.
	 
	 	7.4.2	 	Frequency Modulation

	 	(1)	 	Sanming Local Dispatching Agency may arrange the Power Plant to be
the frequency modulation plant for the power grid of the local district in
accordance with the actual conditions of the power grid in Sanming district, and
the Power Plant must carry out the frequency modulation according to the
dispatching directions and maintain the power frequency being within the provided
range in the Dispatching Regulations.
	 
	 	(2)	 	The Power Plant shall participate in the frequency modulation work
of the electric power system pursuant to the requirements of the Dispatching
Regulations, and fulfill corresponding obligations.
	 
	 	(3)	 	Upon the on-grid connection of the generator units, the automatic speed

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	 	 	 	governor system of the Power Plant must be put into operation; in case of any
occurrence of the failure or abnormal conditions to the automatic speed governor
system of the Power Plant, the staff of the Power Plant shall notice Sanming Local
Dispatching Agency immediately and resolve such defaults as soon as possible.

	 	7.4.3	 	Voltage Regulation

	 	(1)	 	The voltage of the 110kv busbar of the Power Plant shall be the examination
point for the voltage of the power grid, which shall be operated within the upper and
lower limits of the voltage curve in the monthly plan released by Sanming Local
Dispatching Agency to ensure the monthly qualification rate of the voltage of the
examination point being 100%.
	 
	 	(2)	 	In the event that during the operation, the generator units lose the
reactive regulation capability (or reach the operational limit), or the voltage of
the examination point deviates from the qualification range of voltage, the Power
Plant shall notice Sanming Local Dispatching Agency immediately, and the dispatcher
of Sanming Local Dispatching Agency shall take corresponding measures to control the
voltage at the examination point being within the qualification range. In case of any
requirements for the reactive optimization of the power grid of Sanming district, the
Power Plant shall carry out the regulations pursuant to the reactive load released by
Sanming Local Dispatching Agency provided that the voltage at the examination point
of the Power Point could be ensured to be within the qualified range.

	 	7.4.4	 	Reserve Operation
	 
	 	 	 	In case of any requirement of Sanming Local Dispatching Agency, the Power Plant shall
reserve certain capacity. If the reserved capacity could not satisfy the requirement of
Sanming Local Dispatching Agency, the Power Plant shall report to the on-duty dispatcher
of Sanming Local Dispatching Agency immediately.

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	 	7.4.5	 	After the on-grid operation of the generators, unless the Power Plant’s Staff
take rectification measures according to the dispatching direction of Sanming Local
Dispatching Agency, the automatic excitation system of the Power Plant must be put
into operation; in case of any failure or default to the automatic excitation system
of the Power Plant, the staff of the Power Plant shall immediately notice Sanming
Local Dispatching Agency, and resolve the defaults as soon as possible; and if
necessary, the generator could be disconnected from the grid until such defaults get
resolved.

	7.5	 	In case of any Special Operation Mode of Party A due to the equipment upgrading or
transformation which may affect the normal operation of the Power Plant, Sanming Local
Dispatching Agency shall notify the Power Plant of relevant plans two (2) days in advance and
implement the plan determined through consultation.

	7.6	 	In case of any Special Operation Mode of Party B due to the equipment upgrading or
transformation which may affect the normal operation of the power grid, Party B shall notify
Sanming Local Dispatching Agency of relevant amended plans seven (7) days in advance.

	7.7	 	Sanming Local Dispatching Agency shall organize the grid and plants joint meeting with the
on-grid power plants once a year, in which Party B shall be invited to participate, for the
analysis of the operation conditions of the power grid, anticipation of the system tendency,
presentation of the implementations of relevant technical measures for power grid safety, and
the consultation for the settlement of major issues concerning the operation of the electric
power system. Party B shall participate in such joint meetings, and report the operation
conditions of the Power Plant and the implementations of relevant technical measures for the
safety of the Power Plant.
	 
	7.8	 	Both Parties shall exchange the name lists of the on-duty staff in written form and

20

 

	 	 	notify any alteration thereof promptly.

	7.9	 	The Power Plant shall keep the daily field operation records, recording the actual power
produced every hour, the operation conditions of all equipment, and any abnormal condition
occurred during the period of planned or unplanned power cut and overhaul, the date and time
for each record shall be clearly indicated in the recording book, and such materials shall be
provided in time if required by Sanming Local Dispatching Agency. The operation records of
the Power Plant shall be kept for record according to the requirements for files management.

	7.10	 	The electric power output metering devices of the Power Plant shall be normally put into
operation, and the tele-transmission of the data recorded in the electric power output
metering devices of the Power Plant to the electric power output metering system of Party A
could be realized; and Sanming Local Dispatching Agency shall considered the power output data
collected by the electric power output metering system as the reference for the statistics and
power output settlement. In case of any default to the electric power output metering devices
of the Power Plant, such condition shall be reported to Party A and the withdrawal application
for such default shall be submitted as well. In addition, the Power Plant shall resolve the
default as soon as possible.

CHAPTER VIII EQUIPMENT OVERHAUL AND MAINTENANCE

	8.1	 	The annual overhaul plan of the Power Plant shall be submitted according to the relevant
regulations of Sanming Local Dispatching Agency, which shall be reported to Sanming Local
Dispatching Agency through email before the 15th day of October in each year. Upon
the examination and approval of Sanming Local Dispatching Agency, the annual overhaul plans
for the equipments within the dispatching area of

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	 	 	Local Dispatching shall be released. The Power Plant shall carry out the preliminary work
for the equipment overhaul to ensure the completion of the equipment overhaul plan on
schedule.

	8.2	 	The Power Plant shall submit the overhaul plan for the next month to Sanming Local
Dispatching Agency through email before the 20th day of each month according to
the regulations of Dispatching Regulations. In addition, after the arrangement, Sanming Local
Dispatching Agency shall formulate the monthly dispatching plan in light of the released
annual overhaul plan and the monthly overhaul plan and the actual operation conditions of the
power grid provided by the Power Plant.

	8.3	 	The Power Plant shall arrange the planned overhaul of the equipment according to the schedule
of the monthly dispatching plan. The Power Plant shall file an application to Sanming Local
Dispatching Agency for any planned equipment overhaul in accordance with the stipulations of
the Dispatching Regulations and Sanming Local Dispatching Agency shall reply to such
application within the time limit provided in the Dispatching Regulations.

	8.4	 	In case of the requirement of any material testing project after the general overhaul or
technological improvement to the equipments of the Power Plant, the Power Plant shall provide
Sanming Local Dispatching Agency with the testing plan not less than five (5) days in advance,
including the equipment parameters, testing projects and testing procedures, and submit the
testing start-up application in advance according to the Dispatching Regulations.

	8.5	 	In case of the requirement of Unplanned Outage or derated output due to the default of the
equipments, the Power Plant shall submit the application to Sanming Local Dispatching Agency
in advance according to the Dispatching Regulations (excluding urgent accidents). After the
approval of such application, Sanming Local Dispatching

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	 	 	Agency shall amend the dispatching plan and arrange the equipment outage or derated
output.

	8.6	 	In case of any repeated outage of the main equipments for power transmission and
transformation (including the lines, switch, busbar and main transformer) due to the reason
of the Power Plant itself, Sanming Local Dispatching Agency shall carry out the annual
examination for repeated outage.

CHAPTER IX POWER GENERATION PLAN

	9.1	 	The Power Plant shall strictly abide by the Daily Generation Dispatching Plan Curve
(including the curve which is amended by the on-duty dispatcher temporarily) and the
dispatching directions released by Sanming Local Dispatching Agency, and modulate the active
and reactive outputs of the generator units in a timely fashion and arrange the production
operation of the Power Plant.

	9.2	 	Under normal conditions, Sanming Local Dispatching Agency shall arrange the generation plan
of the Power Plan for the next day according to the generation dispatching plan curve for the
next day of Shaxi water valley released by the Provincial Dispatching and the conditions of
the power grid in relation to the safety restrictions and generation output balance.

	9.3	 	In case of any deviation of the water from the upper reaches from the arrangement of the
daily generation plan, the Power Plant shall submit the application for the amendment to the
daily generation plan more than two hours in advance to Sanming Local Dispatching Agency and
implement the amended curve upon the approval of such application.

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	9.4	 	In case of any outage or urgent derated output due to the default, the Power Plant
shall notify Sanming Local Dispatching Agency the outage and the derated capacity as soon
as possible; if such outage or derated output could not recover immediately, application
shall be made up as soon as possible and Sanming Local Dispatching Agency may amend the
generation plan accordingly.

CHAPTER X RESERVOIR DISPATCHING

	10.1	 	Reservoir Flood Dispatching

	 	10.1.1	 	The Power Plant shall copy the flood dispatching scheme of the Power Plant, which shall
be submitted at the end of March in each year, to Sanming Local Dispatching Agency, then
shall submit the approved flood dispatching scheme, flood control plan measures, pre-plan
for the control of the flood exceeding the standard to Sanming Local Dispatching Agency
for record and filing within ten (10) days commencing from the arrival of such documents.
Sanming Local Dispatching Agency carries out the reservoir generation dispatching in
accordance with the reservoir flood control dispatching scheme released by the people’s
government.
	 
	 	10.1.2	 	The Power Plant shall make the analysis for the flood dispatching within one (1) week
from the leaving of the flood, and copy it to Sanming Local Dispatching Agency when such
analysis is submitted to relevant authorities.
	 
	 	10.1.3	 	The Power Plant shall complete the summary of the annual flood control work within one
(1) month after the completion of the flood control, and copy it to Sanming Local
Dispatching Agency when such summary is submitted to relevant authorities.
	 
	 	10.1.4	 	In case of any changes to the anticipated water volume entering into the reservoir, the
Power Plant shall report to Sanming Local Dispatching Agency in advance

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	 	 	 	for a timely adjustment of the loading in order to improve the utilization rate of the
water energy.

	10.2	 	The Reservoir Dispatching Plan, Statement and Summary

	 	10.2.1	 	The Reservoir Generation Dispatching Plan

	 	10.2.1.1	 	The Reservoir Daily Generation Plan.
	 
	 	 	 	Before 9:00 of the normal working day, the Power Plant shall submit the
anticipated average water volume entering into the reservoir, anticipated
generation output and the output of the hydropower station available for
dispatching for the next day to Sanming Local Dispatching Agency (and in case
of holidays and vacations, such applications for the next three or ten days
shall be submitted).
	 
	 	10.2.1.2	 	The Reservoir Monthly Generation Plan
	 
	 	 	 	The Power Plant shall submit the generation plan recommendation for the next
month to Sanming Local Dispatching Agency and relevant authorities before the
20th day of each month.
	 
	 	10.2.1.3	 	The Reservoir Annual Generation Plan
	 
	 	 	 	The Power Plant shall submit the control and utilization recommendation of the
reservoir for the next year to Sanming Local Dispatching Agency and relevant
authorities before the end of October in each year, the main content of which
shall include monthly water volume, generation output, controlled water level
at the end of each month and other requirements of the departments utilizing
the water.

	 	10.2.2	 	The Monthly Reservoir Dispatching Statement
	 
	 	 	 	The Power Plant shall fill out the monthly water and electric power dispatching
statements (in accordance with the standard form provided by Sanming Local Dispatching
Agency and relevant authorities) prior to the third day of each month

25

 

	 	 	 	and send it to the dispatching and communication center and Sanming Local Dispatching
Agency through email, and send the originals by mail.
	 
	 	10.2.3	 	Relevant Summary for the Reservoir Dispatching

	 	10.2.3.1	 	The Power Plant shall submit the annual summary for the operation of water
automatic monitoring and reporting system to Sanming Local Dispatching Agency before
the 10th of October in each year.
	 
	 	10.2.3.2	 	The Power Plant shall submit the annual reservoir dispatching summary and the
operation summary for the water dispatching automatization system of the sub-centre of
the Power Plant of the last year to Sanming Local Dispatching Agency before the
10th of January in each year.

	10.3	 	The Water Automatic Monitoring and Reporting System and Water Dispatching Automatization
System

	 	10.3.1	 	In case of any default to the water automatic monitoring and reporting system of the
Power Plant and the water dispatching automatization system of the sub-centre of the
Power Plant, the Power Plant shall recover such system in time and report to Sanming
Local Dispatching Agency, in order to provide services for the improvement of the Power
Plant’s economy operation level and the assurance of the flood control for the up and
down stream safety of the reservoir through collecting the real-time water and rain
conditions of the water valley of the reservoir.
	 
	 	10.3.2	 	In the event that the overhaul or equipment maintenance of the water automatic
monitoring and reporting system of the Power Plant and the water dispatching
automatization system of the sub-centre of the Power Plant might cause the outage of the
monitoring and reporting system, such overhaul or equipment maintenance shall be approved
by Sanming Local Dispatching Agency.
	 
	 	10.3.3	 	The transformation and upgrading scheme of the water automatic monitoring and reporting
system of the Power Plant and the water dispatching automatization system of the
sub-centre of the Power Plant must be submitted

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	 	 	 	to the Provincial Dispatching or Sanming Local Dispatching Agency for examination.

	10.4	 	The Liability Affirmation for Breach of Reservoir Dispatching
	 
	 	 	In case of the occurrence of any of the following events, Party B shall assume the
liability of breach in accordance with the provisions of Chapter 16 to Party A:

	 	(1)	 	The outage which has not been reported to Sanming Local Dispatching Agency in
time, due to the occurrence of overhaul or equipment maintenance of the water
automatic monitoring and reporting system of the Power Plant and the water dispatching
automatization system of the sub-centre of the Power Plant, causes mistaken
dispatching of Sanming Local Dispatching Agency;
	 
	 	(2)	 	The Power Plant has not in time filled out and reported the water and
electric power dispatching monthly statement twice within one year;
	 
	 	(3)	 	Any transformation or upgrading scheme of the water automatic monitoring and
reporting system of the Power Plant and the water dispatching automatization system of
the sub-centre of the Power Plant has been carried out without the examination and
approval of the Provincial Dispatching and Sanming Local Dispatching Agency.

CHAPTER XI RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES

	11.1	 	Party A shall strictly abide by the regulations and rules concerning the design, operation
and management of relay protection and automatic safety devices, take charge of the setting
calculation and operation of the relay protection and automatic safety devices within the
range of its dispatching, and make analysis and valuation for the equipment running conditions
for such devices. The setting values for the

27

 

	 	 	relay protection and automatic safety devices of the Power Plant within the range under the
dispatching of Sanming Local Dispatching Agency shall be released by Sanming Local
Dispatching Agency, and setting values of other relay protection and automatic safety
devices of the Power Plant could be calculated and set by the Power Plant itself, which
shall be filed with Sanming Local Dispatching Agency, however, the setting values for the
boundaries shall be examined and approved by Sanming Local Dispatching Agency.

	11.2	 	Party B shall strictly abide by the regulations and rules concerning the design, operation
and management of relay protection and automatic safety devices and counter-accident measures
of the relay protection, the regulation of Sanming Local Dispatching Agency for the assurance
of the safe operation of the power grid, and take charge of operation management of relay
protection and automatic safety devices under the dispatching of Sanming Local Dispatching
Agency, and conform to the following requirements:

	 	(1)	 	The calculation of the setting value of the relay protection and automatic
safety devices under the ownership of the Power Plant and dispatching of Sanming Local
Dispatching Agency shall be carried out by the qualified unit and personnel appointed
by the Power Plant, and Party B shall be responsible for the correctness and
completeness of the setting values, the letter of which shall be examined by Sanming
Local Dispatching Agency.
	 
	 	(2)	 	Party B shall take responsibility for the field setting of the value, the
operation maintenance of the relay protection and automatic safety devices under the
ownership of the Power Plant, make the corresponding devices running analysis and
valuation and ensure the correctness and completeness of such analysis and valuation.
	 
	 	(3)	 	Upon the running of the relay protection and automatic safety devices of the
Power Plant, Party B shall notice the on-duty dispatcher of Sanming Local Dispatching
Agency immediately, make analysis and settlement according to the regulations, the
relevant materials of which will be submitted to Sanming Local

28

 

	 	 	 	Dispatching Agency as required.
	 
	 	(4)	 	In case of any missing running of or defect to the relay protection and
automatic safety devices of the Power Plant, Party B shall immediately report to the
on-duty dispatcher of Sanming Local Dispatching Agency, take measures in accordance
with the regulations, make analysis and take precaution measures promptly.
	 
	 	(5)	 	In case of any occurrence of the running of the relay protection and
automatic safety devices within the Power Plant in given month, Party B shall submit
the operation analysis report for the relay protection (including the line protection,
transformer protection, generators protection, busbar protection and etc.) and
automatic safety devices to the local team of Sanming Local Dispatching Agency through
email two (2) days before next month..

	11.3	 	The technology improvement scheme for any technology improvement to the relay protection and
automatic safety devices of the Power Plant’s equipment under the dispatching of Sanming Local
Dispatching Agency (including the equipment under the direct dispatching and permitted
equipment) must be examined and approved by Party A.

	11.4	 	In case of any trip of the switch of the generator units or lines of Party B due to the relay
protection, the Power Plant shall submit the relevant default conditions of the equipments set
forth below to Sanming Local Dispatching Agency within twenty four (24) hours, mainly
including but not limited to:

	 	(1)	 	The equipment turning-on condition and the operation mode of the primary
equipment during the occurrence of such trip;
	 
	 	(2)	 	The signal of the visual annuciator in the supervisory control panel and the
trip condition of the breaker;
	 
	 	(3)	 	Signal of face plate for the protection devices;

29

 

	 	(4)	 	The printed report for the default of the microcomputer protection device;
	 
	 	(5)	 	The default report of the microcomputer default recorder.

	11.5	 	In order to enhance the stability of the electric power system, both Parties shall carry
out the equipment renewal and transformation.

	 	(1)	 	Both Parties shall cooperate with each other to carry out renewal and
transformation of the relay protection and automatic safety devices in order to
ensure the coordination of the equipment of each Party.
	 
	 	(2)	 	The improved equipment shall not be put into operation according to the
regulated procedures until the completion of the testing acceptance and qualification
confirmation.

	11.6	 	Both Parties shall appoint certain staff for the operation maintenance work of the
relay protection and automatic safety devices to ensure the normal operation of the
relay protection and automatic safety devices.

CHAPTER XII DISPATCHING AUTOMATIZATION

	12.1	 	Party A shall strictly abide by the regulations and rules concerning the design, operation
and management of the dispatching automatization system, take charge of the operation and
maintenance for the dispatching automatization system at the dispatching end, and conform to
the following requirements:

	 	(1)	 	To supervise the reliable operation of the dispatching automatization system,
be responsible for the monitoring of operation condition of the dispatching
automatization system and coordinate the major problems arising out of the operation.

30

 

	 	(2)	 	To facilitate the connection of automatization signals of the Power Plant
according to the design requirements.
	 
	 	(3)	 	To make a timely analysis of the reasons for the default of the dispatching
automatization system, and take relevant precaution measures.
	 
	 	(4)	 	To direct and assist Party B in the operation maintenance of the dispatching
automatization system, and cooperate with Party B in the investigations of accidents.
	 
	 	(5)	 	The computer monitoring and control system shall conform to 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 State Economic
and Trade Commission).

	12.2	 	Party B shall strictly abide by the regulations and rules concerning the design, operation
and management of the dispatching automatization system, and the relevant regulations
formulated by Sanming Local Dispatching Agency, take charge of operation and maintenance for
the dispatching automation system at the Power Plant end, and conform to the following
requirements:

	 	(1)	 	The tele-control data and the electric energy metering data of the monitoring
and control system, electric power collection and transmission measures of the Power
Plant shall be transmitted to the dispatching automation system and the electric
energy metering system of Sanming Local Dispatching Agency according to the
transmission regulations and agreements in line with the national standards or
industry standards. The electric energy metering system shall pass the testing by a
qualified testing agency approved by both Parties, so as to ensure the accuracy of
data transmission. The quantity and accuracy of the real time messages concerning the
operation equipments of the Power Plant shall satisfy the relevant regulations of the
State and the operation requirements of Sanming Local Dispatching Agency.
	 
	 	(2)	 	To make a timely analysis of the reasons for the default of the dispatching

31

 

	 	 	 	automatization system under the dispatching of Local Dispatching, and take relevant
precaution measures.
	 
	 	(3)	 	To assist Party A in the operation maintenance of the dispatching
automatization system, and cooperate with Party A in the investigations on accidents.
	 
	 	(4)	 	The computer monitoring and control system shall conform to 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 State Economic
and Trade Commission); to assure the effective quarantine for the computer monitoring
and controlling system of the Power Plant from the information management system and
office automatization system, and the physical quarantine of the dispatching specified
data net from the comprehensive information net and outer internet.

	12.3	 	Both Parties shall operate and maintain the automatization equipments in accordance with the
Dispatching Regulations and relevant regulations concerning the dispatching automatization
system, and shall not withdraw or shut down the equipments at random.

	12.4	 	In case of any technology improvement to the equipment, which is within the range under the
dispatching control of Sanming Local Dispatching Agency (including the equipment within the
direct dispatching range and permitted equipment), dispatching automatization and electric
power communication equipment of the Power Plant, the design of such technology improvement
must pass the examination organized by Sanming Local Dispatching Agency.

	12.5	 	In case of any biding for grid connection of the power generation party as required by the
national polices or governmental regulations, the Power Plant shall establish and utilize
relevant technology support system according to relevant regulations, which is ready for
effective communication with relevant system of Sanming Local

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	 	 	Dispatching Agency.

	12.6	 	Both Parties shall appoint certain staff for operation maintenance of the dispatching
automatization system to ensure the normal operation of the dispatching automatization
system.

	12.7	 	Party B shall establish its corresponding computer data net in light of the requirements of
the dispatching production control and production management, and connect such net with
dispatching data special net and dispatching information net respectively.

CHAPTER XIII DISPATCHING COMMUNICATION

	13.1	 	Party A shall strictly abide by the regulations and rules concerning the design, operation
and management of the dispatching communication system, take charge of the operation and
maintenance for the dispatching communication system at the dispatching end, and conform to
the following requirements:

	 	(1)	 	To supervise the reliable operation of the dispatching communication system,
be responsible for the monitoring of operation condition of the dispatching
communication system and dispatching command, and coordinate the major problems
arising out of the operation.
	 
	 	(2)	 	To take charge of the operation maintenance of the communication equipments
and communication lines at the dispatching end and assure their reliable operation.
	 
	 	(3)	 	To make a timely analysis of the reasons of the default of the dispatching
communication system, and take relevant precaution measures.

33

 

	 	(4)	 	To direct and assist Party B in the operation maintenance of the dispatching
communication system, and cooperate with Party B in the investigations on accidents.

	13.2	 	Party B shall strictly abide by the regulations and rules concerning the design,
operation and management of the dispatching communication system, take charge of
the operation maintenance for the dispatching communication system at the Power
Plant end, and conform to the following requirements:

	 	(1)	 	To take charge of the operation and maintenance of the dispatching
communication system at the Power Plant end and ensure the reliable operation.
	 
	 	(2)	 	To make a timely analysis of the reasons of the default of the dispatching
communication system, and take relevant precaution measures.
	 
	 	(3)	 	To assist Party A in the operation maintenance of the dispatching
communication system, and cooperate with Party A in the investigations on accidents.

	13.3	 	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.

	13.4	 	In order to assure the reliability of the information transmission, the interconnected
transmission net of both Parties shall be equipped with two different and independent
communication transmission routes (physical media) to ensure the specified dispatching and
the transmission channel for the automatization system, relay protection and automatic safety
devices.

	13.5	 	As required by the business of the power grid production, both Parties shall be equipped
accordingly with the complete connection and auxiliary facilities, etc. for

34

 

	 	 	the systems in relation to data exchange, dispatching and executive exchange,
communication monitoring and controlling, and other communication system.
	 
	13.6	 	In order to ensure the influent connection of the communication net, the parameters of the
communication equipment of Party B, including the frequency requirements (which refer to the
carrier wave of the electric power lines and wireless frequencies), which is connected to the
electric power communication net of Party A, shall be approved by Party A in writing.
	 
	13.7	 	The overhaul and outage (retirement ) of the system equipment of the power plant or
hydropower station, which is connected to the provincial electric power communication
interconnection net, shall comply with the management regulation and examination and approval
procedures of Party A.
	 
	13.8	 	The interconnected units must be equipped with the corresponding staff for the daily
operation maintenance of the system equipments of the power plant or hydropower station, which
is connected to the provincial electric power communication interconnection net, in order to
ensure the twenty four (24) hours available field maintenance for any default to the
interconnected electric power lines; in addition, such staff shall strictly obey the
directions, communication net management and maintenance cooperation of Sanming Local
Dispatching Agency.
	 
	13.9	 	In case of any overhaul without going through any examination and approval procedures, or the
implementation that is not complied with the communication dispatching directions, and the
requirements of the cooperation between the net management and maintenance, which are due to
Party B’s Reason and cause mistaken operation, mistaken judgment and mistaken direction of the
communication dispatching and operation maintenance, Party B shall be responsible for the
corresponding liabilities for the aforesaid mistakes which lead to the delayed

35

 

	 	 	settlement and overtime block of the interconnected communication net.
	 
	13.10	 	Both Parties shall prepare a standby communication system to ensure the communication
uninterrupted in case of any Emergencies occurred to the power grid or the Power Plant.
	 
	13.11	 	Party A shall carry out the arrangement for value for the interconnection between the
provincial electric power communication net and the two communication transmission net lines
of Party B, which are of different operation modes, different wideband and different signal
contents, on the basis of the two different communication transmission routes owned by Party
B, and connect the corresponding signals to the Provincial (Local) Dispatching.
	 
	13.12	 	Both Parties shall respectively appoint staff to take charge of the operation and
maintenance of the dispatching communication system within their respective jurisdictions, and
ensure the normal operation of the dispatching communication system.

CHAPTER XIV ACCIDENT MANAGEMENT AND INVESTIGATION

	14.1	 	Sanming Local Dispatching Agency and the Power Plant shall, within their respective
jurisdictions and in accordance with relevant regulations of the Dispatching Regulations and
the Power Plant field operation regulations, handle the accidents in a correct and prompt
manner and inform each other of the settlement situation immediately.

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	14.2	 	The accidents occurred to the equipments within the dispatching jurisdiction of
Sanming Local Dispatching Agency shall be handled strictly in accordance with the
directions of the on-duty dispatchers of Sanming Local Dispatching Agency (excluding the
conditions that can be handled without dispatching directions as clearly specified in the
field regulations).

	14.3	 	Upon the occurrence of the equipment trip, derated output of the generator units or other
abnormal condition or accident to any equipments within the dispatching jurisdiction, the
Power Plant shall strictly abide by the provisions of the Dispatching Regulations to make
clear the reasons of such abnormality or accidental trip, and report the actual conditions
accurately, obey the directions of Sanming Local Dispatching Agency, and resolve the default
of the equipments.

	14.4	 	In case of any switch trip to generator units or lines in the Power Plant, the staff of the
Power Plant shall report to Sanming Local Dispatching Agency by phone with the relevant
conditions of the Power Plant in relation to the equipment default set forth below, including
but not limited to:

	 	(1)	 	The occurrence of the trip of the breaker;
	 
	 	(2)	 	The status of the breaker (close or open);
	 
	 	(3)	 	The duration for the trip;
	 
	 	(4)	 	Any information that may be helpful for judging the reasons for such breaker
trip;
	 
	 	(5)	 	The times of the breaker trip for default;
	 
	 	(6)	 	The output recording of the default recorder.

	 	 	The staff of Power Plant shall report the conditions provided in the aforesaid Items (1),
(2) and (3) immediately, and the information concerning the Items (4), (5) and (6) could
be reported upon the completion of the preparation work of the field as soon as

37

 

	 	 	possible. In case of any abnormality to the tele-transmission capability of the default
recorder, the information of Item (6) shall be provided to Sanming Dispatching Agency
within twenty four (24) hours.

	14.5	 	Sanming Local Dispatching Agency shall, according to the Guides on Safety and Stability for Power System (DL 755-2001), the Dispatching Regulations and other
relevant regulations, and considering the grid structure, the operation characteristics
and the specific conditions of the Power Plant, formulate principles for accident
management and specific counter-accident measures, and advance specified
requirements on the requisite measures which shall be taken by the Power Plant.

	 	14.5.1	 	In case of any Emergencies that threaten the security of the power grid, the on-duty
dispatchers of Sanming Local Dispatching Agency could take necessary measures to ensure
and restore the safe operation of the power grid, including the adjustment of the power
generation output of the Power Plant, the releasing of the generator on-off direction, and
the Disconnection of the Power Plant, etc.
	 
	 	14.5.2	 	In case that the Power Plant or any of the units has to be disconnected, Sanming Local
Dispatching Agency shall, after the termination or remedy of the Emergencies, restore the
connection and operation of the Power Plant or the unit.
	 
	 	14.5.3	 	Sanming Local Dispatching Agency shall explain to Party B the reasons for disconnecting
the Power Plant or the units after the accident.

	14.6	 	The generation curve of the Power Plan (reactive and active), the voltage value of the
voltage examination point and the system frequency curve or the power value of the
connection line shall be determined in accordance with the data collected by the
dispatching automatization system of Sanming Local Dispatching Agency. In case of
any different opinion to the data collected by the dispatching automatization system
of Sanming Local Dispatching Agency, evidences shall be provided in time and
relevant testing and confirmation shall be jointly carried out by both Parties.

38

 

	14.7	 	The Party or both Parties suffering from accident(s) shall carry out accident
investigation according to the Codes of Investigation for Electric Power Production
Accidents. The conclusions of the investigation shall include: causes of accident,
responsible party for the accident and the liabilities, and the counter-accident measures
to prevent similar accidents. The responsible party for the accident shall assume the
liabilities according to the investigation conclusion, and implement the counter-accident
measures in time.

	 	14.7.1	 	During the grid accident investigation and analysis carried out by Party A, Party B
shall be invited to participate when it is involved. Party B shall provide support to the
work of Party A and cooperation in the field investigation, and provide accident analysis
materials such as the fault recording diagrams, the operation conditions during accident
and relevant data, etc.
	 
	 	14.7.2	 	During the investigation and analysis for the accident occurred to the Power Plant
carried out by Party B, Party A shall be invited to participate when it is involved.
Party A shall provide support to the work of Party B and cooperation in the field
investigation, and provide accident analysis materials such as fault recording diagram,
the operating conditions during the accident and relevant data, etc.
	 
	 	14.7.3	 	As for the accidents to the grid and the Power Plant involving both Parties, if both
Parties cannot reach agreement within a short period of time concerning the cause of such
accident, a special investigation panel shall be set up according to relevant regulations
of the State to carry out the investigations.
	 
	 	14.7.4	 	The investigation report of any Party shall be published, which shall cover the cause of
the accident, settlement procedures of the accident, responsible party for the accident
and the corresponding liabilities, the rectification scheme and accident precaution
measures, etc.
	 
	 	14.7.5	 	The responsible party for the accident shall timely correct the default and implement
the rectification scheme and accident precaution measures. In case the other Party is
involved in such rectification scheme and accident precaution measures, the consent of the
other Party shall be obtained.

39

 

CHAPTER XV FORCE MAJEURE

	15.1	 	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.
	 
	 	(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.

	15.2	 	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).

	15.3	 	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

40

 

	 	 	shall immediately consult with each other to formulate and implement a remedy plan and
reasonable alternative measures to minimize 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.
	 
	15.4	 	In the event that the Force Majeure has prevented a Party from performing its obligations
under this Agreement for a continuous period of over sixty (60) 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 Agreement or
the termination of this Agreement within ninety (90) 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 XVI LIABILITIES FOR BREACH OF AGREEMENT

	16.1	 	Either Party’s violation of the provisions of this Agreement shall be deemed as a breach of
agreement, and the other Party shall be entitled to require the breaching Party to assume the
liabilities for breach of agreement.

	16.2	 	Party A, in case of any of the following breach of contract, shall assume the liabilities for
breach of contract to Party B in the manner provided in Clause 16.3 hereof:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which has
caused direct economic losses to Party B.

41

 

	 	(2)	 	Violation of the Dispatching Regulations, which has caused direct economic
losses to Party B.
	 
	 	(3)	 	Requirement released for the operation of the Power Plant (units) beyond its
operation capacity, which has caused direct economic losses to Party B.
	 
	 	(4)	 	Default setting to or default controlling of the primary and secondary
equipments of the power grid due to Party A’s Reason, which has caused direct economic
losses to Party B.
	 
	 	(5)	 	Default to the relay protection and automatic safety devices, dispatching
automatization system and dispatching communication system caused by Party A’s Reason,
which has caused direct economic losses to Party B.

	16.3	 	For each breach of agreement, Party A shall assume the liabilities for breach of
agreement by the following methods:

	 	(1)	 	Party A shall pay the electric power output of 5,000 kwh in a lump to Party B
as compensation for its breach.
	 
	 	(2)	 	In case of any direct economic loss of Party B which cannot be fully
compensated by electric power output paid in a lump provided in Item (1) hereof, the
electric power output converted from the direct expenses and costs of Party B for
repairing the equipments and restoring the normal operations shall be supplied by
Party A (the conversion shall be conducted in accordance with the on-grid tariff).

	16.4	 	Party B, in case of any of the following breaches of agreement, shall assume the
liabilities for breach of agreement to Party A in the methods provided in 16.5:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which has caused
direct economic losses to Party A.
	 
	 	(2)	 	Abnormity or default to the primary and secondary equipments of the Power

42

 

	 	 	 	Plant related to the grid operation due to Party B’s Reason, which has caused direct
economic losses to Party A or any third party.
	 
	 	(3)	 	Violation of the relevant overhaul management regulations provided in the
Dispatching Regulations;
	 
	 	(4)	 	Alteration to the maintenance duration due to Party B’s Reason, which has
caused direct economic losses to Party A.
	 
	 	(5)	 	Failure to report to Sanming Local Dispatching Agency the actual conditions
of the equipments of the Power Plant (such as generators, turbines, boilers and
electric equipments) and relevant facilities accurately.
	 
	 	(6)	 	Violation of the relevant dispatching operation management regulations
provided in the Dispatching Regulations, which threatens the safety and stable
operation of the power grid.
	 
	 	(7)	 	Default or incorrect running of the relay protection and automatic safety
devices caused by Party B’s Reason, which has resulted in accidents or enlargement of
accidents, and has caused direct economic losses to Party A.
	 
	 	(8)	 	Default to the power dispatching automatization system of the Power Plant
caused by Party B’s Reason, which has resulted in accidents or enlargement of
accidents, and has caused direct economic losses to Party A.
	 
	 	(9)	 	Default to the dispatching communication system of the Power Plant caused by
Party B’s Reason, which has resulted in accidents or enlargement of accidents, and
has caused direct economic losses to Party A.
	 
	 	(10)	 	Violation of the reservoir dispatching provisions provided in Article 10.4
hereof.

	16.5	 	In case of breach of agreement, Party B shall assume the liabilities in accordance with
the following methods:

	 	16.5.1	 	For each breach of agreement provided from Item (1) to Item (10) of Article 16.4,

43

 

	 	Party B shall assume the liabilities for such breach by the following methods:

	 	(1)	 	Party B shall pay the electric power output of 5,000 kwh
in a lump to Party A as compensation for its breach.
	 
	 	(2)	 	In case of any direct economic loss of Party A which cannot be
fully compensated by electric power output paid in a lump provided in Item (1)
hereof, the electric power output converted from the direct expenses and costs
of Party A for repairing the equipments and restoring the normal operations
shall be supplied by Party B (the conversion shall be conducted in accordance
with the on-grid tariff); in case of any economic loss to any third party,
compensation shall be paid by Party B.

	16.6	 	In case of any of the following serious breaches of agreement of Party B, Party A
may take enforcement measures to the extent of disconnecting the Power Plant
(units), and Party B has no right to claim for compensations from Party A for any loss
caused by such Disconnection.

	 	(1)	 	The Power Plant arbitrarily starts up for grid connection or shuts down for
Disconnection without being approved by Sanming Local Dispatching Agency.
	 
	 	(2)	 	In case of Emergencies, the Power Plant violates the provisions of Article
7.1.1.
	 
	 	(3)	 	In case of Emergencies, the Power Plant fails to report to Sanming Local
Dispatching Agency the actual conditions of the equipments of the Power Plant (such
as generators, electric equipments and etc.) and relevant facilities accurately.

	16.7	 	Unless otherwise provided in this Agreement, in case of any breach of agreement, the
non-defaulting Party shall immediately notify the defaulting Party to stop the breach,
and shall furnish a written notice as quickly as possible to the breaching Party,
requiring it to correct the breach of agreement and assume the liabilities arising

44

 

	 	 	therefrom pursuant to the provisions of this Agreement.
	 
	16.8	 	The breaching Party shall immediately take measures to correct, and confirm its
breach of agreement and assume the liabilities arising therefrom pursuant to the
provisions of this Agreement.

	 	(1)	 	The electric power output for the breach of agreement paid in a lump shall be
paid, upon the confirmation of such breach, at the settlement for the monthly electric
power output of the Power Plant.
	 
	 	(2)	 	The electric power output, corresponding to the balance between the electric
power output for the breach of agreement paid in a lump and the direct economic
losses, shall be paid, upon the confirmation of such losses, at the settlement for the
monthly electric power output of the Power Plant.

	16.9	 	In the event that either Party explicitly expresses or indicates by its own actions that
it will not perform its obligations hereunder prior to the expiration of the
performance duration specified herein, the other Party may require it to assume the
liabilities for breach of agreement.

CHAPTER XVII EFFECTIVENESS AND VALID TERM

	17.1	 	This Agreement shall come into effect upon being signed by the legal representatives or
authorized representatives of both Parties and affixed with their official stamps. The valid
term of this Agreement shall be two (2) years commencing from the effectiveness date.

	17.2	 	Within two (2) months before the expiration of this Agreement, both Parties shall

45

 

	 	 	negotiate with each other about the renewal of this Agreement. In case of no objection,
this Agreement shall be extended automatically with the valid term of one year each time.

CHAPTER XVIII MODIFICATION, ASSIGNMENT AND TERMINATION

OF THIS AGREEMENT

	18.1	 	Any modification, amendment or supplement to this Agreement shall be conducted in written
form, with the conditions of effectiveness same as those specified in Article 17.1 hereof.

	18.2	 	Both Parties explicitly express that neither Party shall be entitled to assign all or part of
its rights or obligations hereunder to any third party without the written consent of the
other Party.

	18.3	 	Within the valid term of this Agreement, both Parties agree to adjust or amend this Agreement
accordingly in case of the occurrence of any of the following circumstances:

	 	(1)	 	Alteration of relevant laws and regulations, rules and policies of the State;
	 
	 	(2)	 	Any content of this Agreement conflicting with any relevant compulsory
rules, administrative measures and regulations issued by the national electric power
regulatory authority;
	 
	 	(3)	 	Any alteration to the line connection form of the power grid or the line
connection form of the Power Plant.

18.4 Termination of Agreement

46

 

	 	 	In the event that any of the following events occurred to any Party, the other Party shall
be entitled to terminate this Agreement sixty (60) days after serving a notice of
termination:

	 	(1)	 	Either Party goes bankrupt or is subject to liquidation, or the business
license or power business permit of either Party or the Power Plant is revoked.
	 
	 	(2)	 	The Party is merged with the other Party or all or majority parts of its
assets have been transferred to another entity, and the surviving enterprise cannot
assume all its obligations under this Agreement.

CHAPTER XIX DISPUTE RESOLUTION

	19.1	 	Any dispute arising out of the performance of this Agreement and in relation to this
Agreement may be resolved by the Parties through consultations, or submitted to the power
regulatory authority for mediation. If such dispute cannot be resolved through consultation or
mediation, any Party may submit the said dispute to the people’s court for resolution through
judicial proceedings.

CHAPTER XX APPLICABLE LAW

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

CHAPTER XXI MISCELLANEOUS

21.1 Confidentiality

47

 

	 	 	Both Parties warrant to maintain confidential all information and documents which are
procured from the other Party and may not be procured from the public. Without the prior
approval from the original provider of such information and documents, the other Party
shall not disclose to any third party all or part of the information and documents, unless
otherwise provided by the regulations of the State.

	21.2	 	Appendices
	 
	 	 	Appendix I: Diagram for Main Connection Lines of Banzhu Hydropower Plant (including the
diagrams for the on-grid points and the demarcation for the equipment maintenance)
	 
	 	 	Appendix II: Technical Parameters of Banzhu Hydropower Plant
	 
	 	 	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 point
of dispute shall prevail. In case that the discrepancy and contradiction still exist after
applying 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.

	21.3	 	Entire Agreement
	 
	 	 	This Agreement (including Special Provisions) and the appendices hereto constitute the
entire agreement between both Parties pertaining to the subject matter of this Agreement,
and shall replace all prior discussions, negotiations, contracts and agreements conducted
by both Parties in respect of this Agreement.

48

 

21.4 Notification and Service

Any notification or document pertaining to this Agreement shall be conducted in written
form. A notification shall be deemed as having been served upon the confirmation with
signature by the recipient when delivered by way of registered mail, express mail or in
person, or upon confirmation as being received when sent via fax or email. All
notifications and documents shall come into effect upon service and receipt. 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: Fujian Province Sanming Power Industry Bureau

	 	 	 
	Attention:	 	Wu Lu Wu

	Telephone Number:	 	0598-8203319

	Facsimile Number:	 	0598-8202248

	Post Code:	 	365000

	Mail address:	 	Power Dispatching Station, No.1032, Liedong Street, Sanming City, Fujian
Province
	
Party B: Sanming Zhongyin Banzhu Hydroelectric Co., Ltd.

	 
	Attention:	 	Zhou Chang Liang

	Telephone Number:	 	8350130

	Mobile Phone Number:	 	13328593899

	Post Code:	 	365000

	Mail address:	 	Building
160, Qianlong New Village, Xinshi North Road, Sanming City

49

 

	21.5	 	No Waiver
	 
	 	 	Any waiver of any of its rights under this Agreement of any Party, which is not conducted
in a written statement, shall not be deemed as a waiver thereof. Either Party’s failure to
exercise any of its rights under this Agreement shall not be deemed as a waiver of any of
its aforesaid rights or a waiver of any of its aforesaid rights in the future.
	 
	21.6	 	Continuous Effectiveness
	 
	 	 	The provisions with respect to arbitration and confidentiality of this Agreement shall
remain effective after the termination of this Agreement.
	 
	21.7	 	Text
	 
	 	 	This Agreement comprises thirty eight (38) pages, and is executed in four (4)
counterparts. Each Party shall hold two (2) counterparts.

50

 

	 	 	 
	Party A (Stamp):	 	Party B:
	 	 	 

	Fujian  Province  Sanming  Power Industry Bureau	 	Sanming Zhongyin Banzhu Hydroelectric Co., Ltd. 
	 	 	 

	(Stamp)	 	(Stamp)

	 	 	 

	Legal Representative:	 	Legal Representative:

	 	 	 

	Signing Date:   September 22, 2006	 	Signing Date: September 22, 2006

	 	 	 

	Signing Place:      Sanming City	 	 

51

 

APPENDIX I: DIAGRAM FOR THE MAIN CONNECTION LINES OF BANZHU HYDROPOWER

PLANT
(INCLUDING THE DIAGRAMS FOR THE ON-GRID POINTS AND THE DEMARCATION FOR THE EQUIPMENT MAINTENANCE)

52

 

The Equipments under the Dispatching Control of the Local Dispatching shall include:

	1	 	No.1 Generator unit, No.2 generator unit and No.3 generator unit;
	 
	2	 	The 6kv busbar and its equipments in sections I and II;
	 
	3	 	No.1 and No.2 main transformers, and the switch equipments located in the intervals of both
sides of the aforesaid transformers;
	 
	4	 	The 35kv busbar and its equipments;
	 
	5	 	343 switch and lines of 35kv Banlie Line, 344 switch and lines of Banchen Line;
	 
	6	 	35kv Chenda Line, 35kv equipments of Chenda Substation;
	 
	7	 	The secondary equipments affiliated to the primary equipments, and the fixed value of Gaozhou
switch off generator.

The Equipments under the Control of Banzhu Hydropower Station shall include the electric
utilization system for the Power Plant.

53

 

APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT

	1.	 	Nameplate Parameters for the Generator Units of the Power Plant

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Rated Capacity	 	Active Power	 	Rated Power	 	Rated Speed
	Unit No.	 	Type	 	(MVA)	 	(MW)	 	Factor	 	(r/min)
	1
	 	SFWG15-68/5700	 	 	16666	 	 	 	15	 	 	 	0.9	 	 	 	88.2	 
	2
	 	SFWG15-68/5700	 	 	16666	 	 	 	15	 	 	 	0.9	 	 	 	88.2	 
	3
	 	SFWG15-68/5700	 	 	16666	 	 	 	15	 	 	 	0.9	 	 	 	88.2	 

	2.	 	Connection lines connecting the Power Plant to the power grid of Party A

	 	(1)	 	Name of the line: Banlie Line, Banchen Line and Chenda Line (specifically,
Sanming Power Industry Bureau owns the property right of Chenda Line).
	 
	 	(2)	 	Voltage level: 35kv.

	3.	 	Main Technical Parameters

	 	(1)	 	Normal Operation Output Range
	 
	 	 	 	The maximum output for the normal operation of No.1, No.2 and No.3
Generator Units of the Power Plant shall be 105% of the rated capacity,
and the minimum output for the normal operation shall be 40% of the rated
capacity.
	 
	 	(2)	 	Under the condition of the operation of small-sized grid, subject to the
frequency modulation and voltage regulations according to dispatching directions,
the minimum output of No.1, No.2 and No.3 Generator Units of the Power
Plant is 50% of the rated capacity;
	 
	 	(3)	 	Power regulation rate of units during the normal operation

54

 

	 	 	 	No.1, No.2 and No.3 Generator units are respectively 4 MW/min.
	 
	 	(4)	 	The shortest duration for the generator units from receiving a dispatching direction to
reaching the rated output is fifteen (15) min.
	 
	 	(5)	 	The shortest shutdown duration from full load output to zero load after receiving a
dispatching direction is seven (7) min.

55

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