Shandong International Power Development Company Ltd.

1. Shandong International Power Development Company Ltd. May 9th, 2003

2. Contents • Proposed Application to Issue A Share • Reasons for and benefits of the proposed A Share Issue • Scheme of the proposed A share issue • Proposed Acquisition of Sichuan Guangan • Brief introduction of the proposed acquisition • Introduction of Guangan Company • Assessment & pricing • Reasons for and benefits of the proposed acquisition

3. The Proposed Application of A Share Issue

4. Reasons for and benefits of the Proposed A Share Issue • Raising the new capital for the company’s future development • Improving the capital structure and lowering the capital cost • Expanding the financial approach

5. Scheme of the Proposed A Share Issue

6. Share capital changing after the Proposed A Share Issue Before the Proposed A Share Issue After the Proposed A Share Issue * *suppose that 765 million new A shares shall be issued, thereof 196 million shares are proposed to be allocated and issued to China Huadian.

7. Brief Introduction of the Proposed Acquisition

8. Acquisition introduction Before acquisition After acquisition Sichuan Bashu electricity development company China Huadian Sichuan Bashu electricity development company China Huadian 53.56% 20% 80% SIPD 53.56% SIPD 20% 80% Sichuan Guangan Power Generation Company Ltd. Sichuan Guangan Power Generation Company Ltd

9. Introduction of Guangan Company

10. Information of Guangan Company • The four units of Phase I & II are all the state produced coal-fired power generating units; high-quality, large-scale and high efficiency; at present, it was one of the lowest cost power plants. • Total investment to the Guangan Phase II project is RMB 2,285 million, the cost per kilowatt is RMB 3809yuan,the capital account the total investment to 20% • A mine- mouth plant, the coal supplying of Guangan is primarily from Sichuan Huayinshan Mineral Bureau and other local coal mines ; in favor of assuring the fire supply and the cost controlling • Total staff in Guangan Plant at 2002 end are 379 , the higher productive efficiency belongs to the first level in China • All electricity generated by Guangan is sold onto Sichuan Power Grid through 220kv electricity transmission line Sichuan Guangan Power Generation Company Ltd. Phase I Phase II Guangan Started construction in Oct. 1997 under construction Sichuan First unit 300MW Third unit 300MW Forth unit 300MW Second unit 300MW Started commercial operation in Oct. 1999 Started commercial operation in Feb. 2000 Expected to be put into operation in 2004 Expected to be put into operation in 2004

11. Electricity generation growth of Guangan phase I electricity generation growth by year Electricity generation growth by quarter Million kwh Million kwh 2000-2002 CAGR = 39.2% Growth over the previous period 30.5%

12. Increasing revenue and profit of Guangan Sales revenue Net profit RMB Million Yuan RMB Million Yuan 130％ 32.2％ * The data of the first quarter of 2003 were not audited

13. Financial information of Guangan As at 31st Dec.,2002 unit：RMB Million Yuan *the datum was assessed by the State-approved independent PRC valuer according to the domestic valuation system

14. Assessment and pricing

15. Process of acquisition assessment and pricing Cash flow discount Valuation result Negotiation between buyer and seller pricing assets assessment Financial Advisor of the Compny: CICC Acquisition Independent Financial Advisor: CLSA

16. Principal terms of the Guangan Acquisition Agreement

17. Acquisition cost analysis P/E ratio relative to the net profit * of the first quarter of 2003 9.93x 1.0x P/B ratio 3,953 EV（RMB Yuan/kw）** * The acquisition price is RMB475.5 Million, which not included the possible adjustment fund ** RMB195 Million borrowing in Guangan Phase II has been deducted from the net borrowing

18. Reasons for and benefits of the proposed acquisition

19. Realizing the development across the nation • Carrying out the company’s expansion strategy of “strengthening the businesses in Shandong and expanding to other markets in China ” • Expanding the development space for the Company • Mitigating operational risks due to concentrating within a single market • A key step of reaching the national IPP Territorial listed IPP national listed IPP

20. Fast developing economy in Sichuan Province GDP growth ratio • Sichuan Province located in southwest region of China,which adjoins with Northwest,Southwest and Mid-China。The land area is about 0.485 million square kilometers. The population in Sichuan was about 8329 at 2002 end. • Sichuan possesses the abundance resources，which is one of the most important metallurgy industry bases and occupied the significant strategic position in China • The GDP growth ratios of the recent three years were all over 9% • The GDP growth ratios were higher than those of nation Shandong Sichuan and Ningxia

21. Rapid growth of power consumption in Sichuan Province Installed capacity growth ratio Whole society power consumption Million kwh ％ 2000-2002 CAGR = 12.6%

22. Main support from China Huadian • The concrete representation of China Huadian ‘permitting the company to have a preferential right to acquire and develop China Huadian’s interests in all of its power plants and projects’ • Boosting the investors’ confidence of the company’s future business development nationally • Establishing the bases of the continuous acquisitions and good interaction between the company and China Huadian

23. Reaching the rapid growth of the company’s installation scale Growth of Interested installed capacity after the proposed acquisition of Guangan Growth of Interested installed capacity before the proposed acquisition of Guangan MW MW 2002-2004 CAGR = 7.8% 2002-2004 CAGR = 15.6% Note ：suppose that the proposed acquisition will be accomplished by the end of 2003

24. Thanks