China Everbright International Ltd.

China Everbright International Limited (“Everbright International”), its business partner and Suzhou Urban-Public Utilities Bureau jointly held a signing ceremony for the Cooperation and Concession Agreement of the Waste-to-Energy Plant Project in Sheraton Hotel, Suzhou, Jiangsu Province on 1 September 2003. Attendees included renowned government officials such as Mr. Zhou Xingguang, Vice Director of the Suzhou People’s Congress Standing Committee, Mr. Jiang Renjie, the Vice Mayor and Mr. Cheng Yaohuan, the Vice Chairman of the Committee of the Suzhou People’s Political Consultative Conference; Mr. Chen Xiaoping, CEO and Mr. Philip Fan, General Manager of Everbright International.

Located in the center of Changjiang River Delta, Suzhou City is one of the most famous tourist cities in China with fast economic growth. The jurisdiction extent of Suzhou Municipality includes 5 county-level cities, namely Zhangjiagang, Changshu, Taicang, Kunshan, and Wujiang, as well 7 districts, known as Canglang, Pingjiang, Jinchang, Wuzhong, Xiangcheng, Suzhou Industrial Park and Suzhou New District. The urban area occupies 1,650 sq.km, and the population of urban residents is 2,124,000. In 2002, Gross Domestic Productivity (GDP) of Suzhou amounted to RMB 208 billion, which is ranked fifth in the nation after major cities such as Shanghai, Beijing, Guangzhou and Shenzhen.

The rapid economic development in Suzhou has accelerated the accumulation of wastes in the city. At present, Suzhou is using landfill method for its wastes treatment, and the only Qi Zi Shan Landfill area in the city is expected to reach its design capacity within five years. To accommodate the increasing amount of wastes generated and to resolve the environmental problems brought forth by landfill method, the Suzhou government has been seeking after a better solution for waste treatment. After years of research and observation, it has finally decided to implement the Waste-to-Energy Project.

Authorized by the Suzhou government, Suzhou Urban-Public Utilities Bureau commenced an open tender on the China Merchant Website in May 2002, where seven domestic and international companies were invited to join the tender. After an evaluation by a professional team of renowned experts, the project was granted to the investment partnership of Everbright International and its business partner by the establishment of a Sino-foreign Co-operative enterprise (“the Company”) with the subsidiary of the government under a sino-foreign co-operative agreement. The Company will be responsible for the investment, construction and operation of the project. The total duration for the cooperation, including the two years of construction, is twenty-five years. Once expired, the Waste-to-energy Project Plant will be returned, without consideration, to the Suzhou government.

With a total investment of RMB 500 million, the project is the first Waste-to-Energy project in Jiangsu Province to handle over one thousand tonnes of waste per day. Its daily waste treatment capacity and annual waste treatment capacity totals to 1000 tonnes and 333,000 tonnes respectively. The project adopts the relatively advanced and modern “mechanic burning technology” and can produce 72,000,000 kilowatt/hour of electricity annually. The construction of the project will commence by the end of 2003 and is expected to complete and start operation in 2005.

At the ceremony, Mr. Chen Xiaoping announced that Everbright International would work closely with its business partner, so as to establish the Waste-to-energy Plant Project as a model project of the Changjiang River Delta, and eventually to the rest of the country. By reusing resources and reducing the volume of the waste in an environmental friendly way, this project is sure to make significant contribution to improve the living conditions in Suzhou.