09:30     SHANDONG POWER<01071> - Announcement (5)                            

    independent third party pursuant to which the Company has acquired 70%    
    equity interest in Zhangqiu. Details of such acquisition were             
    disclosed in the Company's 2001 annual report.                            
                                                                              
    The Zhangqiu Exploration and Design Agreement                             
                                                                              
    On 18th April, 2000 (i.e., at the time before the Company acquired its    
    70% equity interest in Zhangqiu), Zhangqiu entered into the Zhangqiu      
    Exploration and Design Agreement with the Consultancy Council pursuant    
    to which Zhangqiu has agreed to engage the Consultancy Council to         
    provide exploration and design services for the construction of two       
    135MW fuel generating units in Zhangqiu, Shandong Province, the PRC.      
    Except for the payment of an advance payment in an amount of              
    RMB750,000 by Zhangqiu to the Consultancy Council on 27th April, 2000,    
    no other payment had been made by Zhangqiu, and, since the Company        
    acquired its 70% equity interest in Zhangqiu in December, 2001, no        
    service had been provided by the Consultancy Council, pursuant to the     
    Zhangqiu Exploration and Design Agreement. The principal terms of the     
    Zhangqiu Exploration and Design Agreement are set out as follows:         
                                                                              
    Date    :       18th April, 2000                                          
                                                                              
    Parties :       Zhangqiu; and                                             
                                                                              
                    the Consultancy Council, a wholly-owned subsidiary of     
    SEPCO                                                                     
                                                                              
    Consideration   :       an aggregate of RMB7,500,000 (approximately       
    HK$7,080,000), which will be funded out of the Group's internal           
    resources.                                                                
                                                                              
    Payment terms   :       under the Zhangqiu Exploration and Design         
    Agreement,                                                                
    the consideration shall be payable, or was paid (as the case may be),     
    in the following manner:                                                  
                                                                              
            (a)     10% of the consideration was paid as an advance payment by
    Zhangqiu on 27th April, 2000;                                             
                                                                              
            (b)     progress payments totaling 80% of the consideration shall 
    be payable in accordance with the work-in-progress and schedule of the    
    services performed; and                                                   
                                                                              
            (c)     10% of the consideration shall be retained by Zhangqiu as 
    retention funds which shall be payable following the expiry of a six-     
    month period after the relevant generating unit commences operation.      
                                                                              
    The terms of the Zhangqiu Exploration and Design Agreement were           
    negotiated on an arm's length basis and were on normal commercial         
    terms in the ordinary and usual course of business.                       
                                                                              
    The Zhangqiu No.1 Construction Agreements                                 
                                                                              
    Zhangqiu entered into two construction agreements (collectively, the      
    Zhangqiu No.1 Construction Agreements) with the No.1 Construction         
    Engineering Company pursuant to which Zhangqiu has agreed to engage       
    the No.1 Construction Engineering Company to provide certain              
    construction and installation services involved in the construction of    
    the two 135MW fuel generating units in Zhangqiu, Shandong Province,       
    the PRC to be constructed by Zhangqiu. The principal terms of the         
    Zhangqiu No.1 Construction Agreements are set out as follows:             
                                                                              
    Date    :       9th July, 2002                                            
                                                                              
    Parties :       Zhangqiu; and                                             
                                                                              
                    the No.1 Construction Engineering Company, a wholly-owned 
    subsidiary of SEPCO                                                       
                                                                              
    Consideration   :       an aggregate of approximately RMB34,830,000       
    (approximately HK$32,860,000) (subject to adjustments for variations      
    of the work and services to be performed), which will be funded out of    
    the Group's internal resources.                                           
                                                                              
    Payment terms   :       under the Zhangqiu No.1 Construction Agreements,  
    the consideration shall be payable in the following manner:               
                                                                              
            (a)     10% of the consideration shall be payable as an advance   
    payment following the signing of each of the Zhangqiu No.1 Construction   
    Agreements;                                                               
                                                                              
            (b)     a progress payment, being a proportional sum of the       
    consideration determined based on the work-in-progress carried out each   
    month, shall be payable monthly; and                                      
                                                                              
            (c)     5% and 10%, respectively, of the consideration of each of 
    the Zhangqiu No.1 Construction Agreements shall be retained by Zhangqiu as
    retention funds which shall be payable following the expiry of an one-    
    year period after the commencement of the relevant quality-warranty       
    period and the issuance of a warranty certificate by the project          
    manager and/or Zhangqiu (as the case may be).