RNS Number:5881T
Zhejiang Southeast Elec Power Co Ld
23 December 2003

          Zhejiang Southeast Electric Power Company Limited


          Announcement on Resolutions of the Sixth Meeting

      of the Third Board of Directors (by way of communication)


Zhejiang Southeast Electric Power Company Limited ("the Company") and all the
members of the board of directors warrant the authenticity, accuracy and
completeness of the contents of this announcement and shall be jointly liable
for any false representations, misleading statements or material omissions
contained herein.





The Sixth Meeting of the Third Board of Directors (by way of communication) of
the Company was convened on 19th December 2003 by way of communication.  Fifteen
directors should be present and fifteen directors were actually present at the
meeting. The supervisors of the Company attended the meeting as non-voting
members.  The meeting complies with the stipulations of the Company Law and the
Articles of Association.  The following resolutions were passed unanimously at
the meeting after examination and voting by the directors of the Company:



With the connected directors (Sun Yongsen, Xie Guoxing, Hu Genfa and Cao Lu)
abstaining from voting, the eleven non-connected directors (including five
independent directors) unanimously approved the Proposal on Investing in Zheneng
Lanxi Electric Power Limited Liability Company (the "Proposal") and the
following resolutions were adopted:



1.         Agreeing that the Company shall invest in 25% of the equity of
Zheneng Lanxi Electric Power Limited Liability Company and contribute capital on
the basis of 25% of the registered capital of Zheneng Lanxi Electric Power
Limited Liability Company.



            2.         Agreeing to inject capital in different phases according
to the progress of the works pursuant to the resolutions of the board of
directors and shareholders' meetings of Zheneng Lanxi Electric Power Limited
Liability Company.  According to the requirements of the initial registered
capital of Zheneng Lanxi Electric Power Limited Liability Company, the
corresponding initial capital contribution of the Company shall be
RMB33,000,000.



            3.         Agreeing to submit the Proposal to the shareholders'
meeting of the Company for examination.  The Chairman of the Company shall be
authorised to confirm the specific issues on convening the shareholders'
meeting.



            Please refer to the announcement on the external investment and the
connected transaction of the Company for details of the situation relating to
the investment in Zheneng Lanxi Electric Power Limited Liability Company.







Board of Directors

Zhejiang Southeast Electric Power Company Limited

23rd December 2003










               Zhejiang Southeast Electric Power Company Limited

     Announcement on the External Investment and the Connected Transaction







Zhejiang Southeast Electric Power Company Limited ("the Company") and all the
members of the board of directors warrant the authenticity, accuracy and
completeness of the contents of this announcement and shall be jointly liable
for any false representations, misleading statements or material omissions
contained herein.





Important Reminder:



1.         Particulars of the external investment and the connected transaction:
  The Company proposes to jointly establish Zheneng Lanxi Electric Power Limited
Liability Company with Zhejiang Provincial Energy Group Limited ("Energy Group")
and Lanxi Municipal Electric Power Development and Investment Company Limited by
way of capital contribution.  The Company proposes to invest in 25% of its
equity.



2.         Connected persons abstaining from voting:  As Zhejiang Provincial
Electric Power Development Company, the largest shareholder of the Company, is a
wholly-owned subsidiary of Energy Group, the joint investment of Energy Group
and the Company constitutes a connected transaction, and the connected directors
abstained from voting when the connected transaction was being examined by the
board of directors.



3.         Impact on the listed company:  Such investment is instrumental in
increasing the installed capacity of the Company and optimising the structure of
power assets, which is beneficial to the continued and long-term development of
the Company.





I.          Summary of the external investment and connected transaction



            In order to promote the continued and long-term development of the
Company, the Company proposes to establish Zheneng Lanxi Electric Power Limited
Liability Company with Energy Group and Lanxi Municipal Electric Power
Development and Investment Company Limited by way of cash in order to invest in
the construction and operation of Zheneng Lanxi Power Plant.  Upon approval by
voting at the sixth meeting of the third board of directors' meeting of the
Company (by way of communication), the Company proposes to invest in 25% of the
equity of Zheneng Lanxi Electric Power Limited Liability Company.  Except the
Company, Energy Group and Lanxi Municipal Electric Power Development and
Investment Company Limited shall invest in 67% and 8% of the equity
respectively.



            As Zhejiang Provincial Electric Power Development Company, the
largest shareholder of the Company, is a wholly-owned subsidiary of Energy
Group, according to the stipulations of the Stock Listing Rules of the Shanghai
Stock Exchange, the joint investment in the establishment of Zheneng Lanxi
Electric Power Limited Liability Company by Energy Group and the Company
constitutes a connected transaction for the Company.  The connected directors
have abstained from voting when the connected transaction was being examined by
the board of directors of the Company.  The independent directors of the Company
have expressed their independent opinions and unanimously agreed to this
connected transaction.



            The transaction has yet to be approved at the shareholders' meeting
and the connected parties having interest relationships with the connected
transaction will waive their voting rights on such proposal at the shareholders'
meeting.  Matters relating to the convening of the shareholders' meeting will be
notified separately.





II.         Introduction to the investing party



1.         Introduction to the connected investing party



            The connected investing party involved in this connected transaction
is Energy Group.  Zhejiang Provincial Electric Power Development Company, the
largest shareholder of the Company, is a wholly-owned subsidiary of Energy
Group, and Energy Group is an indirect controlling shareholder of the Company.



            Energy Group is a provincial-level energy-sector State-owned assets
operating organ which was incorporated on 21st March 2001 and established on the
basis of the assets of Zhejiang Provincial Electric Power Development Company
and Zhejiang Provincial Coal Group Company according to the Notice of Zhejiang
Provincial People's Government relating to the Establishment of Zhejiang
Provincial Energy Group Limited issued by Zhejiang Provincial People's
Government (Zhe Zheng Fa (2001) No.6).  Its registered capital is RMB3.5 billion
and its business scope is operating the State-owned assets and State-owned
equity of the group companies and their subordinate enterprises authorised by
the State; investment in and development of enterprises; technical advisory
services.  The legal representative is Sun Yongsen.



            As at the end of 2002, the total assets of Energy Group amounted to
RMB32.8 billion and net assets (excluding minority shareholders' interests)
amounted to RMB15.4 billion; in 2002 revenues from its major operating
businesses amounted to RMB10.8 billion, profit totalled RMB2.1 billion and net
profit amounted to RMB800,000,000.





2.         Introduction to other investing parties



            Lanxi Municipal Electric Power Development and Investment Company
Limited is a State wholly-owned limited liability company.  Its business scope
is investment in power projects and its legal representative is Zheng Yuliang.





III.       Particulars of Zheneng Lanxi Power Plant



            Zheneng Lanxi Power Plant is situated in Lanxi, Jinhua, Zhejiang and
it is proposed to construct 4 x 600MW coal-fired generating units.  Pursuant to
the Report on the Design Phase of the Feasibility Study on the Works of Zhejiang
Zheneng Lanxi Power Plant prepared by Zhejiang Provincial Electric Power Design
Institute, the estimated total static investment of the works is RMB9.996
billion and the total dynamic investment is RMB11.025 billion (the above
investments include desulphurisation).  The scheduled progress of the works is:
preparatory period of construction - 12 months; the period from the commencement
of works at the main plant to the commencement of operation of No.1 generating
unit - 37 months; intervals between the commencement of operation of generating
units - 7 months, and it strives to achieve the target of commencement of
operation of No.1 generating unit by October 2007.



            In order to construct and operate Zheneng Lanxi Power Plant upon
completion, the investing parties propose to establish Zheneng Lanxi Electric
Power Limited Liability Company by way of cash injection.  Its registered
capital accounts for 20% of the total dynamic investment of the project which
amounts to approximately RMB2.2 billion.  The investing parties are required to
inject capital by way of cash according to their respective investment
proportions.   Construction funds other than capital shall be resolved by way of
bank loans.





IV.        Main contents of the investment of the Company



            Upon approval by voting at the sixth meeting of the third board of
directors of the Company (by way of communication), the Company proposes to
invest in 25% of the equity of Zheneng Lanxi Electric Power Limited Liability
Company.



            Calculating on the basis of the registered capital of Zheneng Lanxi
Electric Power Limited Liability Company and the proportion of the equity
invested by the Company, the capital proposed to be injected by the Company
shall be approximately RMB550,000,000.  The final registered capital of Zheneng
Lanxi Electric Power Limited Liability Company and the corresponding capital
contribution amount of the Company shall be subject to the approval of the
relevant authorities.



            As the registered capital of Zheneng Lanxi Electric Power Limited
Liability Company shall be contributed in different phases, of which the initial
registered capital shall be RMB132,000,000 and the corresponding initial capital
contribution of the Company shall be RMB33,000,000.  Thereafter, the company
shall inject capital in different phases according to the progress of the
project pursuant to the resolutions of the board of directors and shareholders'
meetings of Zheneng Lanxi Electric Power Limited Liability Company.





V.         Favourable factors of investing in Zheneng Lanxi Electric Power
Limited Liability Company



            The Company's investment in Zheneng Lanxi Electric Power Limited
Liability Company is beneficial to the continued and long-term development of
the Company.



            1.         The main business of the Company is power generation and
the expansion of the installed capacity is the major means for the Company to
increase income.  Currently, the economy of Zhejiang Province is growing rapidly
and power supply is in great demand.  The Company will seize the favourable
opportunity and actively participate in the construction of new power projects
in order to lay a foundation and provide momentum for future development.



            2.         The single unit capacity of Zheneng Lanxi Power Plant is
600MW supercritical generating units with high thermal efficiency and low unit
coal consumption and sound competitiveness in the power market.  As regards the
existing generating units of the Company, single unit capacities are mainly
300MW and 125MW.  The investment in Zheneng Lanxi Power Plant may optimise the
structure of the power generating assets of the Company and further enhance the
market competitiveness of the generating units of the Company.



            3.         Zheneng Lanxi Power Plant is situated in the central and
western regions of Zhejiang, which are dominated by hydroelectricity and lack
the support of large and medium-sized thermal power plants and that the local
power supply capacity is relatively small and the operational stability is
relatively inadequate.  The construction of Zheneng Lanxi Power Plant is
instrumental in improving the structure of local power sources and enhancing the
operation quality of power grids and voltages thus leading to a more optimistic
market prospect.





VI.       Opinion of independent directors



            The independent directors of the Company are of the view that the
investment in Zheneng Lanxi Electric Power Limited Liability Company can expand
the installed capacity of the Company and increase income thus providing
momentum for the development of the Company, and, moreover, optimise the
structure of the power generating assets of the Company and enhance the market
competitiveness of the generating units of the Company as a result of its single
unit capacity being 600MW supercritical generating units with high thermal
efficiency and low unit coal consumption.



            The independent directors are also of the view that the capital
contribution by the Company and Zhejiang Provincial Energy Group Limited by way
of cash in the investment of Zheneng Lanxi Electric Power Limited Liability
Company is in the long-term interests of the Company and the shareholders as a
whole.  The connected transaction adheres to the principle of openness, fairness
and justness and there are no circumstances which may damage the interests of
the medium and minority shareholders.  When examining this connected
transaction, the connected directors have abstained from voting.  The voting
procedures comply with the stipulations of the relevant laws and regulations of
the State and the articles of association.



            Owing to the above factors, the independent directors of the Company
agree to this proposal.





VII.      List of documents for inspection



            1.         board resolutions duly signed by the directors;



            2.         independent directors' opinion signed and confirmed by
independent directors;



            3.         report on the design phase of the feasibility study on
the works of Zhejiang Zheneng Lanxi Power Plant.





                              Board of Directors

                              Zhejiang Southeast Electric Power Company Limited

                              23rd December 2003






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