UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1996
COMMISSION FILE NUMBER: 0-23148
AES CHINA GENERATING CO. LTD.
(Exact name of registrant as specified in its charter)
BERMUDA 98-0152612
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3/F(W), GOLDEN BRIDGE PLAZA
#1(A) JIANGUOMENWAI AVENUE
BEIJING 100020, PEOPLE'S REPUBLIC OF CHINA
(Address of principal executive office)
TELEPHONE NUMBER (86 10) 65089619
(Registrant's telephone number, including area code)
AMENDMENT NO. 1
The undersigned Registrant hereby amends, as set forth in the pages
attached hereto, its Quarterly Report on Form 10-Q for the fiscal quarter ended
August 31, 1996:
The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended August 31, 1996 is hereby amended to file a revised version of Exhibit
10.33, for which Registrant has requested that the Securities and Exchange
Commission grant confidential treatment for certain information identified
therein. The amended version of such exhibit is attached hereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AES China Generating Co. Ltd.
-----------------------------
(Registrant)
November 27, 1996 /s/ Jeffery A. Safford
- ---------------- -----------------------------
Date Vice President
Chief Financial Officer and Secretary
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EXHIBIT INDEX
EXHIBIT SEQUENTIALLY
NUMBER DOCUMENT NUMBERED PAGE
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10.33* Operation & Offtake Contract dated July 5, 1996
between Wuhu Shaoda Electric Power Development
Company Limited and Anhui Provincial Electric
Power Corporation
- ----------------
* Confidential treatment has been requested for certain information indentified
in this exhibit.
Information contained herein, marked with [***], is being filed pursuant to a
request for confidential treatment.
Exhibit 10.33
Dated 5th July 1996
WUHU SHAODA ELECTRIC POWER DEVELOPMENT COMPANY LIMITED
And
ANHUI PROVINCIAL ELECTRIC POWER CORPORATION
PHASE IV OF WUHU POWER PLANT OPERATION & OFFTAKE CONTRACT
Portions of this exhibit have been omitted
pursuant to a request to the Securities
and Exchange Commission for confidential treatment
<PAGE>
This Contract has been entered into on 5th July, 1996 by and
BETWEEN
Anhui Provincial Electric Power Corporation ("Anhui Power"); and
Wuhu Shaoda Electric Power Development Company Limited (hereinafter
referred to as the "Joint Venture")
IT IS HEREBY AGREED as follows:
ARTICLE 1. DEFINITIONS
With respect to this Contract the following expressions
shall have the meanings set forth below:
1.1 "Actual Completion Date" shall mean, as defined in the EPC
Contract, in respect of any Unit, the date on which such
Unit has successfully completed its 72-hour and 24-hour
trial operation and other tests required by applicable laws
and regulations in China and such completion has been
certified by the engineering consultant approved by the US$
Creditor(s).
1.2 "Annual Generation Plan" shall mean the annual generation
plan compiled in accordance with Article 6.2.
1.3 "Approved Operating Costs" shall mean the portion of the
Electricity Fee deemed by the relevant price control
authorities to be attributable to the operating and fuel
costs of the Power Plant.
1.4 "Approved Swap Agreement" means an agreement with respect to
the exchange of payments representing interest rates entered
into by the Joint Venture in compliance with and according
to the terms of the US$ Senior Loan Contract.
1.5 "Responsibility of the Joint Venture" has the meaning set
forth in Article 8.3.
1.6 "Cost Component of the Joint Venture" shall mean, in respect
of any period, the portion of the Electricity Fee
attributable to the payment of the administration and
management expenses, insurance premium and expenses, taxes
levied on the business transactions of the Joint Venture,
auditor's fees, engineering consultant fees, advisory fees
and all other fees of a similar nature incurred by the Joint
Venture for such period.
1.7 "Contract Completion Date" shall mean in respect of any Unit
the date as defined in Article 5 of the EPC Contract in
respect of such Unit.
1.8 "Creditor" shall mean any creditor or legal entity providing
financing pursuant to a Financing Contract.
1.9 "Delivery Point" shall mean the measuring point at the high
voltage side of the step-up transformer.
1.10 "Electricity Sales Tax" or "EST" shall mean the Value Added
Tax and surcharges levied against the Joint Venture by any
State or local tax authorities in accordance with the
Provisional Regulations of Value Added Tax of the People's
Republic of China and the Rules of Implementation thereof,
the Notice concerning the Regulations on Value Added Tax for
Electricity Products published by the State Tax
Administration, and/or other similar taxes of whatever name
or according to any laws or regulations which replaced the
above laws and regulations and/or any other value added or
sales taxes (i.e. all
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taxes or surcharges charged against the Joint Venture on the
amount of electricity sold by the Joint Venture or on the
amount of any payments received by the Joint Venture).
1.11 "Electricity Fee" shall mean in respect of any Unit for any
12 month period the Tariff for that 12 month period as
approved by the pricing control authority multiplied by the
Minimum Purchase Quantity of such Unit for such 12 month
period.
1.12 "Financing Contract" shall mean any contract entered into by
and between the Joint Venture and one or more Creditors by
which the Joint Venture is to obtain, inter alia,
construction funds for the Power Plant, including the US$
Senior Loan Contract, the US$ Subordinated Loan Contract and
the RMB Loan Contract.
1.13 "FX Financing Contracts" shall mean the US$ Senior Loan
Contract, US$ Subordinated Loan Contract, all security and
other documents entered into by the Joint Venture pursuant
to the terms of the US$ Senior Loan Contract and all
Approved Swap Agreements (if any) and any other agreement
pursuant to which the Joint Venture incurs foreign exchange
obligations in connection with the planning, arrangement,
construction, operation or management of the Power Plant and
which has been entered into by the Joint Venture in
compliance with the terms of the US$ Senior Loan Contract
and US$ Subordinated Loan Contract.
1.14 "Joint Venture Contract" shall mean the contract entered
into on 12 February 1996 for the establishment of the Joint
Venture and the development of the Power Plant, as amended
from time to time.
1.15 "KWH" shall mean Kilowatt Hour.
1.16 "Minimum Purchase Quantity" or "MPQ" shall mean, unless
otherwise specified, the Minimum Purchase Quantity of each
Unit of the Power Plant for a 12 month period and shall have
the meaning stipulated in Article 2.2.
1.17 "Month" shall mean calendar month.
1.18 "Power Grid" shall mean the electricity transmission grid in
Anhui Province.
1.19 "Operation Services" shall mean the services in respect of
the management, operation and maintenance of the Power Plant
to be performed pursuant to Article 4.
1.20 "Power Plant" shall mean the Power Plant which will be
built, designed, constructed, commissioned and completed in
Wuhu City, Anhui Province, People's Republic of China,
consisting of 2 x 125 MW coal-fired generating units and all
buildings, equipment and machines, including but not limited
to the transmission facilities linking the Power Plant to
the Power Grid, office and other auxiliary buildings, coal
and ash handling facilities, civil works and marine works in
accordance with the terms and conditions of the Joint
Venture Contract and the EPC Contract.
1.21 "Power Plant Force Majeure" shall have the meaning as
defined in Article 12.1.
1.22 "EPC Contract" shall mean the contract entered into by and
between the Joint Venture and Anhui Power for the purpose of
the overall engineering, procurement and construction of the
Power Plant.
1.23 "Pre-Operation Services" shall mean the services to be
performed in relation to each Unit before such Unit comes
into operation as detailed in Article 4 and Appendix III.
1.24 "Renminbi" and "RMB" shall mean the lawful currency of the
People's Republic of China.
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1.25 "RMB Equity Return Portion" shall mean the portion of the
Electricity Fee attributable as profits payable to Parties C
and D under the Joint Venture Contract in respect of the
relevant 12 month period.
1.26 "RMB Financing Portion" shall mean the portion of the
Electricity Fee to enable the Joint Venture to repay the
principal and interest due and payable on any RMB debt of
the Joint Venture in respect of the relevant 12 month
period.
1.27 "Tariff" shall mean the on-grid tariff per KWH of
electricity purchased by Anhui Power and approved by
relevant Chinese authorities. The tariff shall be adjusted
in accordance with Article 7.
1.28 "Tariff Commencement Date" for Unit I shall mean the earlier
of (a) the Actual Completion Date of Unit I and (b) the date
falling six months after the date of the US$ Senior Loan
Contract and for Unit II shall mean the earlier of (a) the
Actual Completion Date of Unit II and (b) the date falling
twelve months after the date of the US$ Senior Loan
Contract.
1.29 "Termination Payment" shall mean an amount in RMB which,
when received by the Joint Venture and (where relevant)
converted into US$ (and net of any associated costs payable
by the Joint Venture) shall be the greater of (i) the
expected revenue of the Power Plant net of operating and
fuel costs over the period from the date of termination to
the original scheduled expiry date of this Contract
discounted for early receipt using a discount rate of ten
per cent. per annum and (ii) an amount sufficient to
discharge in full all obligations and liabilities (actual
and contingent) of the Joint Venture in respect of (a)
operating expenses of the Power Plant, (b) US$ Senior Debt
Costs and (c) any other debt or liability of the Joint
Venture which has not been effectively subordinated to the
US$ Senior Debt Costs.
1.30 "Termination Event" shall mean any Event of Default (as
defined in the US$ Senior Loan Contract).
1.31 "Unit" shall mean either Unit I or Unit II.
1.32 "Unit I" shall mean the first unit of the Power Plant to be
completed, together with the common facilities and all
essential, auxiliary and service facilities.
1.33 "Unit II" shall mean the second unit of the Power Plant to
be completed, together with the common facilities and all
essential, auxiliary and service facilities.
1.34 "Unit Commissioning" shall mean, in respect of any Unit, the
commissioning and bringing into operation and service of
such Unit until the relevant Unit has successfully completed
its 72-hr. and 24-hr. tests.
1.35 "US Dollars" and "US$" shall mean the lawful currency of the
United States of America.
1.36 "US$ Equity Return Portion" shall mean the portion of the
Electricity Fee attributable as profit to Parties A and B
under the Joint Venture Contract in respect of the relevant
12 month period.
1.37 "US$ Financing Component" shall mean the portion of the
Electricity Fee to enable the Joint Venture to make all
payments of principal, interest, indemnity amounts, fees,
costs and expenses and other amounts due and payable under
the FX Financing Contracts in respect of the relevant 12
month period.
1.38 "US$ Senior Debt Costs" means all and any sums (whether
principal, interest, indemnity amounts, fees, costs,
expenses or other amounts) which are or will be at any
relevant
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time due and payable, whether on their due date, on
demand or howsoever, under any FX Financing Contract in each
case as conclusively determined by the Facility Agent (as
defined in the US$ Senior Loan Contract).
1.39 "US$ Subordinated Loan Contract" means the agreement between
the Joint Venture and AES China Holding (L) Company Limited
for the provision of a loan of US$18,000,000 to the Joint
Venture.
1.40 "US$ Senior Loan Contract" means the agreement between the
Joint Venture and certain Creditors for the provision of a
loan of US$65,000,000 to the Joint Venture.
1.41 "Year" shall mean a calendar year (from January 1st to
December 31st).
1.42 "Pre-Commercial Operation Period" shall mean in respect of
each Unit the first 185 days after the Actual Completion
Date of that Unit.
1.43 "IIR" means the rate of interest which discounts the flow of
revenue received by an investment so that the net present
value of the cash flow is equal to the capital sum invested.
1.44 "Interconnection Contract" means the contract dated the date
hereof between the Joint Venture and Anhui Power providing
for the Power Plant to be connected to the Power Grid.
ARTICLE 2. SALE AND PURCHASE OF ELECTRICITY
2.1 Minimum Generation Quantity
2.1.1 In the first 365 days starting from the Actual
Completion Date of each Unit, the Minimum
Generation Quantity (MGQ1) for that Unit shall be
125,000 X 5,000 KWH
2.1.2 Thereafter the Minimum Generation Quantity
(MGQ2)for each Unit subsequent to the first 365
days (reduced pro rata if less than one year) is:
125,000 X 5,500 KWH
2.2 Minimum Purchase Quantity
2.2.1 The Minimum Purchase Quantity (MPQ1) of each Unit
for the first 365 days starting from the Actual
Completion Date of that Unit is:
MGQ1 x (1-7.6%)
2.2.2 The Minimum Purchase Quantity (MPQ2) for each
Unit thereafter (reduced pro rata if less than
one year) is:
MGQ2 x (1-7.6%)
2.3 Obligation to Take Electricity
Anhui Power shall:
(a) Take all electricity generated and available to
be taken off from the Delivery Point by each Unit
during the Unit Commissioning and interconnection
thereof as and when it is generated in accordance
with the program for Unit Commissioning of the
Joint Venture;
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
(b) from the Actual Completion Date of Unit I to the
Actual Completion Date of Unit II, take
electricity generated by Unit 1 in accordance
with the Annual Generation Plan agreed under
Article 6, namely, MPQ1 x the number of days
between the Actual Completion Dates of the two
Units/365 days; and
(c) from the Actual Completion Date of Unit II until
the end of the Joint Venture term, take not less
than the MPQ of both Units during each year
(reduced pro rata if less than a year).
2.4 Commissioning
The Joint Venture and Anhui Power shall consult with each
other, as soon as practicable, on the proposed
commissioning schedule, including testing dates, and Anhui
Power shall notify the Joint Venture immediately on each
occasion on which it will be ready to commence any such
test.
2.5 Steady Electricity Generation
Within the allowed range of the Power Grid, Anhui Power
shall ensure that the Power Plant is always kept running
at a load at which the Power Plant may be operated in a
stable condition in accordance with all relevant
regulations and rules of China including without
limitation those issued from time to time by the Ministry
of Electric Power or other competent authority.
2.6 Steady Electricity Offtake
Anhui Power shall maintain a steady offtake of electricity
from the Power Plant.
2.7 Offtake During Pre-Commercial Operation Period
The first 185 days after the Actual Completion Date of
each Unit shall be the Pre-Commercial Operation Period of
that Unit. Anhui Power shall offtake the electricity
generated during the Pre-Commercial Operation Period by
each Unit and make payment therefor at on-grid Tariff (as
determined under Article 7) and enable the Unit(s) to
start and shut down for load adjustments. The Joint
Venture shall compensate Anhui Power on the basis of
[***] on-grid electricity. Such compensation
shall be part of the generation cost of the Power Plant
and form part of the projected operating costs.
ARTICLE 3. DELIVERY OF ELECTRICITY
3.1 Delivery Point
When electricity is delivered through the Delivery Point
to the Power Grid, it shall be deemed to have been
received by the Power Grid.
3.2 Measurements and Records
The quantities of electricity delivered shall be measured
and recorded in accordance with the provisions of Article
5 of the Interconnection Contract. Such measurements and
record shall, in the absence of manifest error and
omission, be conclusive and final. Anhui Power and the
Joint Venture shall consult with each other to determine
the procedure for further verification relating to the
above which may, from time to time, be considered
necessary.
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ARTICLE 4. OPERATION OF THE POWER PLANT
4.1 Entrusting Anhui Power as Operator
The Joint Venture appoints Anhui Power as operator
(Operator), and Anhui Power accepts the appointment to act
as Operator in connection with the management, operation
and maintenance of the Power Plant. The role of the
Operator includes the obligation to perform the
Pre-Operation Services, Operation Services (see Appendix
III for details) and the obligation of coal supply to the
Power Plant.
4.2 General
4.2.1 When performing the Operation Services, Anhui Power shall
not cause the Joint Venture to breach any laws and
regulations relevant to the operation of the Power Plant
and the terms of any other contracts to which the Joint
Venture is a party.
4.2.2 Anhui Power shall operate the Power Plant in accordance
with good industry operating practice for thermal power
plants and carry out its Operation Services in order to
achieve commercial interests of the Joint Venture as a
priority;
4.2.3 As part of the Operation Services, Anhui Power shall
ensure that the Power Plant is regularly and properly
maintained and overhauled so that it is able to generate
the Minimum Purchase Quantity for both Units throughout
the term of this Contract.
4.3 Operation
Subject to compliance with Article 4.4 and with good
operating practice for thermal power plants, from the
Actual Completion Date of Unit I, Anhui Power shall use
best efforts to keep the Power Plant operating at such
capacity as may from time to time be necessary to meet the
Power Grid's demand for electricity.
4.4 Operation in Accordance with Design Specifications:
In order to ensure that the Power Plant operates safely
and efficiently during both Units' designed operation
period and to ensure that the Power Plant does not
encounter avoidable breakdowns, damage or deterioration
throughout the period for which it has been designed to
operate, the Power Plant must be operated in accordance
with its operating manuals so as not to exceed the
limitations on operation recommended by the equipment
manufacturer.
4.5 Scope of Entrustment
Anhui Power shall be responsible for the operation,
management and maintenance of the 2 x 125 MW Units and its
ancillary facilities and for supplying sufficient fuel to
the Power Plant.
4.6 Pre-Operation Services
Anhui Power shall:
(a) perform the services necessary to prepare the
Power Plant to commence operations and provide
on-job training of the operation staff;
(b) provide the necessary staffing and resources to
the Joint Venture to enable the Joint Venture to
perform its obligations with respect to the Power
Plant construction and the commissioning of the
Units. The related expenses shall be included in
the Project Budget as stipulated in Appendix I of
the EPC Contract;
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(c) provide such advice and support to the Joint
Venture in connection with the construction of
the Power Plant and the commissioning of the
Units as may be reasonably expected to be within
the scope of Anhui Power's qualifications,
competence and experience, and as the Joint
Venture may reasonably request; and
(d) provide the other Pre-Operation Services, as
detailed in Appendix III.
The obligations of Anhui Power in relation to the
Pre-Operation Services for each Unit will
commence upon execution of this Contract and
remain in effect until discharged by the end of
the Defects Liability Period (as defined in the
EPC Contract).
4.7 Operation Services
Upon and after the Actual Completion Date of each Unit,
Anhui Power shall provide the following Operation Services
throughout the continuance of this Contract to such Unit
as follows:
(a) perform all its duties and obligations in
relations to the Power Plant operation, so as to
fulfil Anhui Power's obligations under this
Article 4; and
(b) provide such advice and support to the Joint
Venture in connection with the operation of the
Power Plant as may be reasonably expected to be
within the scope of Anhui Power's qualifications,
competence and experience, and as the Joint
Venture may reasonably request.
(c) provide the other Operation Services, as detailed
in Appendix III.
4.8 Coal Supply
4.8.1 Anhui Power is responsible for the coal supply to
the Power Plant according to the specifications
set forth in Appendix IV hereof, and shall
deliver coal to the Power Plant's coal yard so as
to ensure that the Power Plant has sufficient
coal at all relevant times as may be necessary to
generate the Minimum Generation Quantity for both
Units as set out in Article 2.1.
4.8.2 Before the Actual Completion Date of each Unit,
Anhui Power shall provide fuel oil, coal,
chemicals, consumables and personnel needed for
commissioning of the Unit during the trial
operation period which expenses have been
included in project budget set out in Appendix I
of the EPC Contract.
4.9 Plans and Budget
Anhui Power shall consult and agree with, and submit to
the Joint Venture before the end of each year the
generation plan and the annual budget of the generation
and operating cost of the Power Plant for the next year.
4.10 Information
Anhui Power shall periodically provide information related
concerning the operation of the Power Plant and the
carrying out of the Pre-Operation Services and the
Operation Services to the Joint Venture. Anhui Power shall
provide the Joint Venture with periodic reports and send
copies of the reports to each party to the Joint Venture
Contract and the Engineering Consultant referred to under
the EPC Contract. The reports shall include financial and
operation statements. (For details, see Appendix III,
Section 5).
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
4.11 Key Personnel
After consulting with the Joint Venture, Anhui Power shall
nominate a qualified, competent and experienced person to
act as Plant Manager, who shall not be replaced without
prior consultation with the Joint Venture. If the Plant
Manager resigns, or is dismissed or is otherwise unable to
perform his duties, Anhui Power shall promptly consult
with the Joint Venture, and shall promptly appoint another
qualified, competent and experienced person to fill the
vacancy.
4.12 Sub-Contracting
4.12.1 Anhui Power shall not delegate or
subcontract the entire Pre-Operation Services or
the Operating Services to any third party.
4.12.2 Subject to Article 4.12.1 hereof, Anhui
Power may subcontract part only of the
Pre-Operation Services or the Operation Services
to specialists or other subcontractors as are
necessary to enable it to fulfil its obligations.
Such subcontracting shall not relieve Anhui Power
from any of its duties, obligations and
liabilities under this Contract. Anhui Power
shall be fully responsible for the actions and
breaches of all subcontractors as if they were
its own actions and breaches.
4.13 Strict Obligations
Anhui Power's obligations under this Contract are strict
obligations. Anhui Power shall not be relieved from any of
its obligations under this Contract by reason of any
exercise or non-exercise, or delay in exercise, by the
Joint Venture of any or all of its powers or rights under
this Contract.
Article 5. OPERATION DUTIES
5.1 General
The Joint Venture shall provide assistance and advice in
connection with the placing of the insurance identified in
Article 11 which shall be effected by Anhui Power on the
behalf of the Joint Venture.
5.2 Working Capital
The Joint Venture shall be required to provide to Anhui
Power a [***] working capital prior to the Actual
Completion Date of Unit 1.
During the operational period Anhui Power shall be
responsible for arranging and obtaining any necessary
additional working capital on its own account as required
and the interest expenses incurred in connection therewith
shall be counted as part of the cost of generation. The
Joint Venture shall provide Anhui Power with assistance in
the arrangement of such loans but shall not be obliged to
advance, or procure the advance of, or to guarantee or
otherwise incur any liability (contingent or actual) in
respect of any advance by a third party of, any funds to
Anhui Power.
5.3 Limitation of Liabilities and Mitigation
5.3.1 If the Power Plant cannot generate electricity
because of a Power Plant Force Majeure event
Anhui Power shall use all efforts to resume
operation of the Power Plant at full capacity as
soon as possible.
5.3.2 Obligations of Anhui Power
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
On and from the Actual Completion Date of each
Unit, Anhui Power shall be fully responsible for
ensuring that that Unit generates its Minimum
Purchase Quantity. If the relevant Unit cannot
generate its Minimum Purchase Quantity, the
resulting shortfall in generation shall be
compensated by Anhui Power. Anhui Power's
liability under this Article 5.3.2 shall only be
relieved within the limit of this Contract due to
the liability of the Joint Venture or Power Plant
Force Majeure in accordance with and pursuant to
Article 8.5.
5.4 Payments for Pre-Operation Services
In order to enable Anhui Power to carry out the
Pre-Operation Services pursuant to Article 4.6, the Joint
Venture shall pay the Pre-operation service fees to Anhui
Power. Pre-operation services fees are included in the
Project Budget in Appendix I of the EPC Contract.
5.5 Payment for Operation Service
In order to enable Anhui Power to carry out the Operation
Services pursuant to Article 4.7, the Joint Venture shall
pay Anhui Power a monthly management fee, calculated at a
rate of [***] of on-grid power after the
Pre-Commercial Operation Period of each Unit. Such fee
will be counted as part of the generation cost of the
Power Plant and form part of the projected operating
costs.
5.6 Payment - General
Anhui Power shall only be entitled to receive from the
Joint Venture the amounts expressly provided for under
this Contract.
Article 6. EXCHANGE OF INFORMATION
6.1 Preparation of Operation Plans: In order to ensure that
the Power Plant operates efficiently at all times,
according to Article 4.4, Anhui Power shall:
(a) compile a preliminary operation plan no later
than the end of July of each year, and specify:
(i) the Power Plant's projected average
operation load for the succeeding year;
(ii) the projected periods during which each
Unit may be shut down for overhaul,
repair and maintenance in the succeeding
year; and
(b) hold regular meetings with the Joint Venture
regarding the offtake obligations and electricity
demands so that, subject to the above provisions,
Anhui Power can amend the relevant operation
schedule mentioned above if necessary, but
without prejudice to the Tariff or the MPQ of any
Unit.
6.2 Annual Generation Plan
Anhui Power shall, no later than November of each year,
finalize and submit to the Joint Venture the Annual
Generation Plan for the Power Plant for the succeeding
year.
6.3 Change in Load Level
After the Actual Completion Date of each Unit, generation
of electricity from such Unit shall comply with the
central scheduling and dispatch requirements for Anhui
Province (For details, see the Interconnection Contract).
The Power Plant must be operated in
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accordance with the provisions of Article 4 and with good
thermal power plant operation practice.
6.4 Exchange of Information
6.4.1 Anhui Power shall promptly notify the Joint
Venture of the occurrence if it becomes aware
that the maximum generating capacity of the Power
Plant is insufficient to meet the scheduled
operating load of the Power Plant.
6.4.2 Anhui Power and the Joint Venture shall hold
regular meetings to discuss and resolve any
problems so as to ensure the smooth operation of
the Power Plant and the smooth offtake of
electricity therefrom.
Article 7. Price and Terms of Payment
7.1 The Calculation and Approval of the Tariff
During the term of this Contract the Tariff in any one
year shall, assuming that each Unit of the Power Plant
delivers its Minimum Purchase Quantity, be sufficient to
enable the Joint Venture to pay the Power Plant's
operating costs (including but not limited to fuel cost),
all amounts payable by the Joint Venture in that year in
respect of US$ Senior Debt Costs (including principal,
interest, fees and maintaining any retention/reserve
amounts required pursuant to the US$ Senior Loan Contract)
all amounts payable by the Joint Venture in that year in
respect of any other US$ loans and/or RMB loans, fees and
losses on conversion in foreign exchange, necessary
expenses of the Joint Venture, taxes to be paid, the Joint
Venture reserves and the investors' anticipated return on
equity of the Joint Venture and, for this purpose, where
any such amount is denominated in a currency other than
RMB, the applicable part of the tariff payment shall equal
an RMB amount that, after conversion into the applicable
foreign currency will enable the Joint Venture to
discharge the relevant amount. Anhui Power and the Joint
Venture will estimate and agree these costs in
consultation with the Facility Agent, and the Joint
Venture will submit the agreed proposed Tariff in respect
of the level of which it shall previously have consulted
with the Facility Agent to the relevant pricing
authorities for approval. The proposed on-grid Tariff will
be estimated in this manner and submitted for adjustment
on an annual basis.
7.1.1 Components of the On-Grid Tariff
RMB Portion:
Loan principal
Reasonable profit
Salaries
Unforeseeable costs
Financing costs
Water costs
Materials
Repairs
Fuel
Depreciation
Taxes
Entrusted operation and management fees
Other expenses
US$ Portion:
Loan principal (of both the US$ Senior Loan
and US$ Subordinated Loan)
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Financing costs (including interest, fees, realised
` foreign exchange losses, other financing costs etc)
any amount required to fill the Dollar Retention Account
to the Dollar Retention Amount (as defined in the US$
Senior Loan Contract)
Reasonable profit
Other expenses
7.1.2 Approval of the On Grid Tariff:
The on-grid tariff submitted for approval shall be
calculated on the basis of 5,500 hours of annual
utilization of each Unit of generating equipment; in the
first year after the Actual Completion Date of each Unit,
the on-grid tariff submitted for approval will be
calculated on the basis of 5,000 annual utilization hours
of each Unit.
Without limiting the foregoing, the estimated on-grid
tariff shall be:
(a) based on, among other matters, the loan repayment
period of 7 (seven) years (including construction
period) under the US$ Senior Loan Contract and
ten years under the US$ Subordinated Loan
Contract and the RMB Loan Contract, the loan
interest rate and other costs and the after tax
IRR of [***] since the
date of contribution of the registered capital;
and
(b) adjusted via adjustment accounts to compensate
for unforeseeable increase in costs resulting
from changes in fuel, interest rate, exchange
rate, tax expenses and other factors
7.1.3 Adjustment of On-Grid Tariff:
Before the end of each year, the Joint Venture shall
estimate and apply for the on-grid Tariff of the next year
according to the mechanism and taking into account all the
factors set out in this Article 7.1.
7.1.4 On-Grid Tariff:
The Joint Venture will be responsible for estimating the
proposed on-grid Tariff for each Year and submitting the
annual application to the relevant pricing authorities in
Anhui Province for approval. Anhui Power shall provide
such assistance and information as the Joint Venture may
require.
7.1.5 Composition of the Sales Tariff from the Power Grid to
end-users:
(a) electricity supply costs (including purchase
costs)
(b) reasonable profit
(c) interest and principal repayments for the
associated transmission project
(d) taxes
7.1.6 Approval of the Sales Tariff:
Anhui Power will be responsible for estimating the sales
tariff and submitting the application to the relevant
pricing authorities in Anhui Province for approval.
7.1.7 Adjustment of Sales Tariff:
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
The sales tariff will be adjusted annually according to
the same principle for adjusting the on- grid tariff.
7.2 Generation before the Actual Completion Date:
All electricity generated by either Unit I or Unit II
before the relevant Tariff Commencement Date will be
delivered to Anhui Power free of charge while its
operating and fuel costs shall be borne by Anhui Power.
7.3 Payment for Minimum Purchase Quantity:
Notwithstanding any other provision of this Contract, as
the strict liability of Anhui Power, irrespective of
whether the Actual Completion Date of either Unit has
occurred and as an unconditional obligation, Anhui Power
shall:
(a) from the Tariff Commencement Date of Unit I to the Tariff
Commencement Date of Unit II, pay the Electricity Fee of
Unit I on a monthly basis in the proportion specified in
Appendix I, and
(b) from the Tariff Commencement Date of Unit II pay the
Electricity Fee of both Units on a monthly basis in the
proportion specified in Appendix I.
Every payment shall be made to the Joint Venture not later
than the end of the following calendar month and made to a
bank account designated by the Joint Venture.
7.4 Financial Arrangements
7.4.1 The Joint Venture and Anhui Power shall make an estimate
of on-grid price and cost prior to the beginning of each
year pursuant to Article 7.1 and after submitting it to
the competent pricing authorities of Anhui Province for
approval, shall determine, in accordance with the
requirements of the US$ Senior Loan Contract, projected
unit operating cost of the on-grid price of that year. The
projected unit operating cost shall include unit operating
and fuel cost and other unit costs as described in Table 2
of Appendix I hereto and as approved by the Joint Venture
in compliance with its obligations under the US$ Senior
Loan Contract.
After review by the relevant price control authorities,
the portion of the projected operating costs of the type
set out in Table 2 of Appendix 1 approved for inclusion in
the Tariff for a particular Year shall be the Approved
Operating Costs for that Year. The Joint Venture shall
calculate the exact level of the Approved Operating Costs,
the Approved Operating Cost per KWH and the AOC Percentage
for that Year. The AOC Percentage is:
Approved Operating Cost per KWH x [***] %
---------------------------------------
Tariff
7.4.2 It is agreed that, as operator of the Power Plant,
Anhui Power shall be responsible to satisfy all
operating costs of the Power Plant (including fuel
costs and other costs specified in Table 2 of Appendix
I) and Anhui Power shall indemnify the Joint Venture in
respect of every loss, cost, liability or expense which
the Joint Venture may suffer or incur as a consequence
of any failure by Anhui Power to fulfil its obligations
hereunder. The Approved Operating Cost shall be
deducted from the Electricity Fee. The deduction shall
be by retention of the AOC Percentage from each payment
to be made under this Contract by Anhui Power. Anhui
Power shall not be entitled to make such deduction if:-
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
(a) an Event of Default or prospective Event of Default
(each as therein defined) has occurred under the US$
Senior Loan Contract; or
(b) Anhui Power is in breach of any of its obligations
under this Contract.
The remainder (after deduction if applicable) is payable
to the bank account designated by the Joint Venture.
7.4.3 The Joint Venture will be responsible for converting
relevant parts of the Electricity Fee to foreign
currencies to enable the Joint Venture to meet its
obligations denominated in foreign currencies. By request
from the Joint Venture, Anhui Power shall provide
reasonable assistance to Joint Venture with respect to
said foreign exchange conversion and obtaining the
necessary approvals.
7.5 Electricity Generation in Excess of Minimum Purchase
Quantity:
7.5.1 Anhui Power shall purchase the electricity generated in
excess of the Minimum Purchase Quantity for both Units at
the on-grid tariff. The income from this excess
electricity net of the AOC Percentage (provided that the
conditions in Article 7.4.2(a) and (b) are satisfied - if
such conditions are not satisfied such income shall be
paid gross) shall first be paid to the Joint Venture and
shall be applied by the Joint Venture in satisfaction of
any shortfall in Electricity Fee, consequent upon the
application of Article 8.5.2. To the extent there is any
remaining surplus:
(a) In the first 365 days after the Actual Completion
Date of each Unit 30% of such surplus shall be
paid to Anhui Power as incentive payment for
taking electricity in excess of 10,000
utilisation hours (cumulative both Units).
(b) For each year afterwards:
(i) [***]% of such surplus will be paid to
Anhui Power as incentive payments for the
portion in excess of 11000 hours if both
Units achieve between 11000 and 13000
utilization hours in aggregate;
(ii) [***]% of such surplus will be the
incentive payments to Anhui Power for the
portion in excess of 13000 hours if both
Units achieve more than 13000 utilization
hours in aggregate;
(iii) Any remaining amount will be retained by
the Joint Venture.
If pursuant to Appendix 1 a refund is due to Anhui Power
at the end of any Year, this shall be refunded by the
Joint Venture within 60 days following the end of the
relevant Year. Provided that the Joint Venture shall not
be obliged to make this refund at that time if, and for so
long as, this would jeopardise its ability to make
payments under the US$ Senior Loan Contract, US$
Subordinated Loan Contract and in respect of other
unsubordinated debt or liability of the Joint Venture as
they fall due.
7.6 Invoices and Payments
7.6.1 Anhui Power shall provide to the Joint Venture the
preceding months financial report for each Unit before the
14th day of each month, and shall exchange the accounts
records with each other so that, after the approval of the
Joint Venture, such records will be used as the basis for
making account books.
7.6.2 Anhui Power shall provide to the Joint Venture annual
financial statements for each Unit within 60 days after
the end of each year.
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
7.6.3 The Electricity Fee, net of Approved Operating Costs
(where permitted as set out in Article 7.4.2) shall be
paid in full in accordance with the payment schedule set
out in Appendix I without any other deduction, set-off or
withholding of any nature whatsoever. If any withholding
is required by law, Anhui Power shall at the same time pay
to the Joint Venture such additional amounts as will
ensure that the Joint Venture receives the full amount of
the Electricity Fee on the due date as if such deduction
or withholding had not been made.
7.6.4 Notwithstanding any other provision of this Contract
Anhui Power's obligation to pay the Electricity Fee in
accordance with this Article 7 and the Joint Venture's
right to receive such amounts are independent of the
Power Plant and production or dispatch therefrom and
the calculation and receipt by Anhui Power of the sales
tariff from the grid to end-users and any other matter
or circumstance whatsoever (except as and to the extent
that relief has been expressly provided for in Article
8.5.2) and Anhui Power's payment obligations hereunder
are absolute, unconditional and independent of any
other dealings between the parties or any other matter
or circumstance whatsoever.
7.6.5 If Anhui Power cannot fulfil its payment obligations on
the date specified in this Contract, it shall pay to the
Joint Venture a late payment penalty calculated at [***]%
of the delinquent amount of payments per day on an
accumulative basis.
Article 8. CAUSE OF FAILURE TO GENERATE
8.1 Determining the Causes
The following procedure shall be used to determine whether
any failure to generate electricity was caused by a Power
Plant Force Majeure event, or is the responsibility of
Anhui Power, or the responsibility of the Joint Venture.
8.1.1 The Joint Venture and Anhui Power shall, acting through
their respective technical consultants, endeavor to reach
agreement on the cause for failure to generate
electricity. Any such agreement shall be binding to all
parties.
8.1.2 If no agreement can be reached within 14 days after the
day on which all parties were notified, then either party
may request an expert, mutually agreed upon, from a third
party, to make a decision which, when made, shall be
binding on all parties.
Pending the decision Anhui Power shall make payments under
Article 8.5.2 as if the cause of the occurrence were Power
Plant Force Majeure. If it is subsequently determined that
the cause was Anhui Power's Responsibility, Anhui Power
shall forthwith pay the difference between the payments it
would have made but for this paragraph and the payments
actually made by Anhui Power pursuant to this paragraph,
to the Joint Venture.
8.2 Responsibility of Anhui Power
If the cause for failure to generate is not Power Plant
Force Majeure event or the Responsibility of the Joint
Venture, then Anhui Power is liable for the cause.
8.3 Responsibility of the Joint Venture
Responsibility of the Joint Venture means that the Joint
Venture failed to perform its obligations under this
Contract.
8.4 Power Plant Force Majeure (as defined in Article 12.1).
8.5 Adjustment of MPQ
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8.5.1 Planned Outages: Each Unit of the Power Plant may be
shutdown for a period or periods not exceeding, in
aggregate:-
(a) Forty-five days for each Unit in each third Year in
which a major overhaul will take place; and
(b) twenty-two days for each Unit in each Year,
for the purposes of repair and maintenance, provided that,
subject to Article 8.5.2, any such shutdown or other
failure to dispatch shall not affect Anhui Power's
obligation to pay the Electricity Fee in accordance with
Article 7.
8.5.2 Unplanned Outages: If in any Year any Unit is shutdown
or fails to generate for a period in excess of that
specified in Article 8.5.1 and it is determined in
accordance with Article 8 that the cause of such
shutdown or failure is the Responsibility of the Joint
Venture or is caused by Power Plant Force Majeure, the
proportionate part of the MPQ attributable to the
period of shutdown or other non-generation shall be
reduced by a proportion which is equal to the
proportion which the US$ Equity Return Portion plus the
RMB Equity Return Portion bears to the aggregate
Electricity Fee in the relevant period. In no event
shall any reduction in the Electricity Fee be such as
to result in the Electricity Fee less the Approved
Operating Costs for the relevant period being
insufficient to enable the Joint Venture to pay its
entire US$ Senior Debt Costs and any other financing
costs for the relevant period.
8.5.3 Prior to the Joint Venture unconditionally satisfying its
obligations under the US$ Senior Loan Contract, the
payments to be made by Anhui Power under this Contract for
MPQ of the two Units shall be on the basis of an 11,000
integrated working hours of such Units. After the Joint
Venture has unconditionally satisfied its obligations
under the US$ Senior Loan Contract, the parties shall
agree upon the working hours, taking into account the
conditions of the Power Grid and the Tariff, so as to
achieve the anticipated rate of return.
Article 9. PREPARATION TO INTERCONNECT TO GRID
9.1 Interconnection to the Power Grid:
9.1.1 Anhui Power shall guarantee that the Power Plant is
interconnected to 220KV transmission network of the Power
Grid by the Tariff Commencement Date of Unit I.
9.1.2 The Power Grid shall be capable of providing the Power
Plant with sufficient quantities of electricity power as
required for the performance of the commissioning tests
and start up without delay or restriction, for the
performance of the synchronizing of each Unit without
delay or restriction and for the Power Plant to transmit
all electricity produced during Unit Commissioning and to
transmit continuously the maximum output of electricity
generated by each Unit.
9.2 Liability of Anhui Power
If the Power Plant is not interconnected with the Power
Grid by the Tariff Commencement Date of Unit I, or is not
available for use in accordance with the requirements as
described in Article 9 hereof, then the failure of the
Power Plant to generate electricity shall be deemed to be
Anhui Power's responsibility.
Anhui Power must purchase all electricity delivered from
the Delivery Point and pay according to Article 7.
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9.3 Liability of the Joint Venture
The Joint Venture shall be at fault if it fails to make
any required payment under and in accordance with the EPC
Contract and this results in the Power Plant not being
interconnected with the Power Grid.
Article 10. INDEMNITY
If a party to this Contract is in breach of its
obligations under it, the breaching party shall bear
responsibility for and shall indemnify and hold the
non-breaching party harmless from and against any loss or
damage, cost, liability or claim against the non-breaching
party, and all expenses relating thereto, including, but
not limited to, legal fees and expenses, which may be
suffered by the non-breaching party, due to the other
party's breach of its obligations under any relevant
contract including but not limited to this Contract and
the Interconnection Contract.
ARTICLE 11. INSURANCE
11.1 Insurance from Joint Venture
The Joint Venture shall maintain and obtain such insurance
in respect of the construction and operation of the Power
Plant (including, but not limited to, those specified in
Appendix 5) in the name of the Joint Venture as required
by the FX Financing Contracts. The insurance expense shall
be counted as part of the cost of electricity generation.
11.2 Insurance from Anhui Power
Anhui Power shall obtain and maintain insurance, in its
own name, and shall be responsible for any liability
relating to workers and staff and as required by the
relevant laws of China. The insurance expense shall be
passed through to the Tariff as part of the cost of
electricity generation.
11.3 Policies and Claims
Anhui Power shall comply with all requirements of such
insurance and shall provide the Joint Venture with all
information and assistance within its capacity to aid the
Joint Venture in making any claims under insurance carried
and maintained under Article 11.1 and in processing claims
under its insurance. Anhui Power shall promptly notify the
Joint Venture of the occurrence of any accident or other
event covered by or affecting the insurance.
ARTICLE 12. OCCURRENCE OF POWER PLANT FORCE MAJEURE
12.1 Power Plant Force Majeure means any of the following events:
(a) war, hostility or insurrection;
(b) plague or other epidemics;
(c) fire;
(d) lightning;
(e) earthquake; or
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(f) damages to property as a result of the operation of the
forces of nature, including natural calamities, and which
an experienced power plant operator or electricity
supplier, as the case may be, could not foresee;
which, in each case;
(i) occurs within the boundaries of the Power Plant; and
(ii) prevents the Power Plant from generating electricity; and
(iii) cannot be prevented by any effort according to the good
operating practices for thermal power plants.
12.2 Notification
If an event of Power Plant Force Majeure occurs at any
time, Anhui Power shall, as soon as possible, notify the
Joint Venture of such event. Together with such
notification, Anhui Power shall present its proposals to
mitigate the effects of such event of Power Plant Force
Majeure.
12.3 Consultation
Anhui Power and the Joint Venture shall as soon as
possible consult with each other with the object of
maintaining economic production of electricity by the
Power Plant and minimizing any occurrence of expenses and
disruption.
12.4 Mitigation
Anhui Power shall use its best efforts to overcome the
effects of the event of Power Plant Force Majeure.
ARTICLE 13. SPECIFICATION OF COAL
13.1 Coal Must Comply with Specifications
Anhui Power shall ensure that each of the deliveries of
coal supplied to the Power Plant shall comply with all of
the specifications set forth in Appendix IV.
13.2 Coal Analysis on Delivery
When each load of coal is delivered at the Power Plant,
the coal shall, at the cost of Anhui Power (which shall
form part of the operating expenses), be weighed and
analyzed based on the condition when payment is made in
accordance with the procedures set forth in Measurement
Standards Bureau of P.R.C. standards: (1) ((GB475-83))
Sampling Process for Commercial Coal: (2) ((GB474-83))
Coal Sample Making Process: and (3) ((GB212-91)) The
industrial Analysis Process of Coal (or such other
equivalent internationally accepted standards as the
Parties may agree).
ARTICLE 14. NOTICES
14.1 Address for Notices
Under this Contract, each invoice, notice or other
document to be sent by each party by courier, mail or
facsimile or delivered to other parties shall be in
writing and sent or delivered to the other party at the
following addresses:
(a) Anhui Power:
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No. 415 Wuhu Road
Hefei, Anhui, P.R.C. 230061
Facsimile: 0551-3633393
Receiver: Cheng Guangjie
(b) The Joint Venture:
Commercial Office Building
West Huangshan Road
Wuhu, Anhui, P.R.C. 241000
Facsimile: 0553-3823224
Receiver: Wang Wudao
or other address as one party may have notified to the
other party in writing from time to time.
14.2 Delivery of Notices
Any such invoice, notice or other document:
(a) may be delivered in person to the relevant address
on any day during the hours of 9.00 a.m. to 12.00
noon and 2.00 p.m. to 5.00 p.m. in an envelope.
The envelope shall indicate on the front of it the
subject matter of its contents and the envelope
shall be marked for the attention of such officer
or employee (if any) as the relevant party shall
have notified to the other party for the purpose.
(b) if so presented for delivery, may be handed to any
person then present at such address who will
provide written notice of the receipt of the same;
and
(c) if the person effecting delivery is unable to
obtain such written acknowledgment within one hour
of his arrival at such address, may be left there.
14.3 Deemed Delivery
Any invoice, notice or other document delivered by hand
shall be deemed to have been delivered and received if
delivery is effected in accordance with Article 14.2. Any
document sent by facsimile shall be deemed to be delivered
on the working day after it is sent. Any document sent by
mail shall be deemed to have been delivered three working
days after it is mailed.
ARTICLE 15. MISCELLANEOUS
15.1 Separate and Independent Contract
This Contract shall be construed as a separate and
independent contract. If there is any conflict between
this Contract and any other agreement between any of the
parties relating to the same subject matter, the
provisions of this Contract shall prevail.
15.2 Language of Contract
This Contract shall be executed in Chinese and English.
Both the English and Chinese versions of this Contract are
of equal validity.
15.3 Amendments
Any amendments to this Contract and/or the Appendices must
be in writing and signed by the duly authorized
representatives of the Joint Venture and Anhui Power and
approved by the relevant authorities.
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ARTICLE 16. TERMINATION IN ADVANCE
16.1 Termination Events
Upon the occurrence of a Termination Event, Anhui Power
shall be obliged to immediately pay to the Joint Venture
the Termination Payment, whereupon the Joint Venture shall
transfer all right, title and interest in the Power Plant
to Anhui Power or to such other person as Anhui Power
shall nominate and, without prejudice to any existing
accrued rights of the parties, this Contract shall
automatically terminate.
If the Parties do not, for whatever reason, within 60 days
after the occurrence of a Termination Event, agree the
amount of the Termination Payment or any component
thereof, Anhui Power shall immediately pay to the Joint
Venture on account of Termination Payment an amount equal
to the amount certified by the Facility Agent (as defined
in the US$ Senior Loan Contract) to represent its estimate
of the amount which would be payable under item (ii) in
the definition of Termination Payment. Such amount on
account of Termination Payment paid by Anhui Power shall
be applied first in or towards satisfaction in full of all
amounts due under or in connection with the US$ Senior
Loan Contract and shall be paid without prejudice to the
rights and obligations hereunder of either the Joint
Venture or Anhui Power to subsequently require or make any
necessary adjusting payments between them once the amount
of the Termination Payment is agreed between them.
16.2 Termination by Agreement
Subject as provided in Article 16.1 neither party may
terminate this Contract without the consent of the other
or (in the case or an assignment by any party, whether by
way of security or otherwise) the assignee of the other
party. In any event this Contract shall not be capable of
termination without the consent of the Creditors so long
as the Joint Venture has any obligations, actual or
contingent, pursuant to the FX Financing Contracts.
ARTICLE 17. Law and Dispute Resolution
17.1 Governing Law
This Contract shall be governed and construed in
accordance with the laws of China. If any disputes arise,
they shall be settled according to the laws of China.
17.2 Settlement of Disputes
Any disputes arising from the execution of or in
connection with this Contract shall be settled through
friendly consultations between the parties. In the event
no settlement can be amicably reached through consultation
within 60 days, the disputes shall be submitted to the
China International Economic and Trade Arbitration
Commission in Beijing for arbitration. The arbitration
award shall be final and binding on all parties.
ARTICLE 18. EFFECT AND TERM OF CONTRACT
18.1 Effect of Contract
18.1.1 This Contract will come into effect on the date of
execution by both parties.
18.1.2 Copies of this Contract shall be submitted for record
purposes to the appropriate authorities by Anhui Power.
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18.2 Term
This Contract shall remain in force until the expiration
of the Joint Venture term or shall be extended for the
same period as the period affected by Power Plant Force
Majeure.
Article 19. Assignment
19.1 Anhui Power hereby acknowledges and consents to the
assignment by the Joint Venture of any or all of its
rights and benefits under this Contract in favour of any
Creditor(s).
19.2 The terms "Anhui Power", "Joint Venture" and "Party" shall
include their respective successors and permitted assigns.
IN WITNESS WHEREOF, this Contract has been duly executed by the
parties as of the date first above written.
Signatories to this Contract
Wuhu Shaoda Electric Power Development Company Limited
Representative: [Signature Illegible]
Date:_______________1996
Witness: [Signature Illegible]
Anhui Provincial Electric Power Corporation
Representative: [Signature Illegible
Date:________________1996
Witness: [Signature Illegible]
<PAGE>
[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Appendix I Invoice Format
Invoice for Electricity Fee Payment from Month: Date:
to Month: Date:
Date of Meter Recording:
Date of Table fill-out:
This month is the ____ month of this quarter,
The meter reading of the preceding month was ________,
The meter reading of this month is ________.
The portion of Electricity Fee for this month is ________, being the
price determined pursuant to Article 7 of the Operation and Offtake
Contract.
The on-grid electricity of the first month of this quarter is _____
The on-grid electricity of the second month of this quarter is ____
The on-grid electricity of the third month of this quarter is _____
Sum of money due ____________
Balance due ___________
Amount payable (sum of money due + balance due) ____________
Balance due = unpaid account of the amount payable for the
preceding month + delinquency charge as referred
to in Article 7.6.4
Payments Due:
(a) Payment due in respect of the 1st, 2nd, 4th, 5th,
7th, 8th, 10th and 11th months of each Year:
[***]
(b) Payment due in respect of the 3rd and 9th month
of each Year:
[***]
(c) Payment due in respect of the 6th month of each
Year:
[***]
(d) Payment due in respect of the 12th month of each
Year:
[***]
where
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AMPQ is the aggregate of the MPQ of both Units (it will be the
MPQ of Unit I before the Tariff Commencement of Unit II);
T is the Tariff;
AOCP is the AOC Percentage (as determined under Article 7.4);
A is the excess of actual generation (expressed in KWH) from the
beginning of the 1st month to the end of the 6th month over one half
of the AMPQ; (A may never be less than zero); and
C is the excess of actual generation (expressed in KWH) in the Year
over the AMPQ (C may never be less than zero).
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Table 2 Operation Cost of the Power Plant
1, Fuel
2, Power Offtake
3, Water
4, Salary
5, Welfare
6, Maintenance
7, Other Costs
Office Work
Water
Travel
Heating
Low-value Consumable Amortization
Labor Protection
Repairs
Transportation
Insurance
Leasing
Sewage
The Worker Union Fee
Staff Education
Testing and Experiment
External Service
Technical Transfer
Unemployment Insurance
Reception
Waste Ash Disposal
Land Use
Audit
Consultant
Afforestation
Stock Products Loss, Damage and
Abandonment
Salary Review
Guard and Fire Fighting
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Corporate Membership
Water Conservancy Fund
Price Adjustment Fund
Entrusted O & M Fee
Others
8, Bank Charges
9, Working Capital Adjustment
10, Technical Renovation
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Appendix II Metering and Recording of Power Output
1 The KWH meter to record both active and reactive power
quantity supplied by the Power Plant to Power Grid shall
be located at the Breaker No. 1 and the Breaker No. 2 at
the high voltage side of the step-up transformer of the
Power Plant; the KWH meter to record power supply from
Anhui Power Grid to the Power Station shall be located at
the Breaker No. 3 at the high voltage side of the start-up
transformer of the Power Plant.
2 Under normal operation, power from the Power Plant to
Power Grid shall be transmitted through the 220KV step-up
substation of the Power Plant and the 220KV transmission
line.
3 The accuracy of metering equipment shall comply with
accuracy standards for Class 1 metering equipment, namely:
Active Power Meter: Grade 0.5
Reactive Power Meter: Grade 2.0
PT: Grade 0.2
CT: Grade 0.2
The metering equipment shall be managed in accordance with
Regulations for Management of Electric Power Meters,
promulgated by the Ministry of Electric Power.
4 Under normal operation, auxiliary power of the Power Plant
shall be provided by the high-voltage station service
transformer; in case of outage of the station service
transformer, it shall be provided by the start-up
transformer.
5 Power transmitted from the Power Plant to Power Grid shall
be calculated through the following formula:
Qg1 + Qg2
Among these, Qg1 is the active power volume supplied by
the Power Plant to Anhui Electric Power Grid measured by
KWH meter at the Breaker No. 1; Qg2 is the reactive power
volume supplied by the Power Plant to Anhui Electric Power
Grid measured by KWH meter at the Breaker No. 2.
6 Power transmitted from Anhui Power Grid to the Power Plant
shall be calculated as the active power quantity measured
by KWH meter at the Breaker No. 3 at the high voltage side
of the start-up transformer.
7 The Joint Venture and Anhui Power shall jointly appoint a
qualified institution to be responsible for recording of
all KWH meters. At noon of the last day of each month or a
time in the same day as agreed upon by the Parties, the
Joint Venture and Anhui Power shall send representatives
to the site to witness the recording. In case that any one
Party is absent at such an agreed time, the Party present
shall witness the recording alone, and the result of such
recording shall be binding on both Parties.
8 The Joint Venture and Anhui Power shall jointly appoint a
qualified institution to calibrate all meters and their
auxiliary parts every year. At the time when calibration
takes place, the Joint Venture and Anhui Power shall send
representatives to the site to witness the calibration. In
case that any one side is absent at such an agreed time,
the Party present shall witness the calibration alone, and
the result of such calibration shall be binding on both
Parties.
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9 If any Party finds, for some reason, that the above
metering equipment may be inaccurate, that Party shall
immediately notify the other Party of the situation. The
inaccurate metering equipment shall be tested and
recalibrated promptly. The power output at the time of
metering inaccuracy shall be calculated at a temporary
metering point determined by both Parties.
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Appendix III Pre-Operation and Operation Services
Part I Pre-operation Services
Before the actual date of construction completion of the
units, Anhui Power shall provide the following
pre-operation services:
1 Preparation for Operation
Anhui Power shall
1.1 in consultation with the Joint Venture, draw out maintenance
and the administrative management system for the Power Plant;
1.2 three months prior to the full start-up and interconnection
of the Unit I of the Power Plant, make out and submit to the
Joint Venture operation and safety codes applicable to the
Power Plant (Preliminary Version). Within three months after
commencement of commercial operation of the Power Plant, the
above codes shall be modified and observed during operation
of the Power Plant. Copies of such codes shall be sent to the
Joint Venture for file keeping purpose;
1.3 develop a complete set of training program for the Power
Plants O & M employees for them to become familiar with power
plants and satisfactorily fulfil their responsibility. The
training program shall include seminars, site visits, and
training given by EPC contractors and equipment
manufacturers. The training program shall be based on
technical data and manuals provided by EPC contractors,
including information about start-up, operation, basic
maintenance, fire fighting and safety, etc.;
1.4 in consultation with the Joint Venture, draw out criteria for
recruitment of employees of the Power Plant, and recruit
qualified and experienced employees according to such
criteria;
1.5 assist the Joint Venture in monitoring, operation and tests
of the Power Plant;
1.6 send to the Joint Venture and relevant operation management
departments technical data and final drawings provided by EPC
contractors, the original copy of which shall be kept in the
safest place within the Power Plant;
1.7 in consultation with the Joint Venture, draw out the list of
all consumable, spare parts, tools and materials needed by
the Power Plant, and purchase on behalf of the Power Plant
the above things needed by the Power Plant during the first
year of commercial operation;
1.8 in consultation with the Joint Venture, draw out a detailed
maintenance plan and methods for the first year of commercial
operation of the Power Plant; in consideration of the rights
and obligations of the Joint Venture, draw out an outline
plan for the scheduled overhaul for the first four years of
commercial operation.
2 Start-up, interconnection, commissioning and tests
Anhui Power shall
2.1 provide spare parts, consumable, fuel oil, water, coal and
lubricants necessary for timely, safe and stable start-up of
the Units;
2.2 be responsible for implementing, and guaranteeing the Units
to be in compliance with the interconnection conditions
stipulated in Article 2 of the Interconnection Contract;
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2.3 provide qualified and experienced engineers in sufficient
quantities to perform start-up, commissioning,
interconnection and 72- hour and 24 hour performance tests of
the Units;
2.4 provide all necessary power for commissioning of the Power
Plant (including power needed for start-up);
2.5 record in detail and keep all the data of the start-up and
performance tests of the Power Plant;
2.6 provide other necessary services.
Part II Services and Operation
1 Recruitment and training
Anhui Power shall
1.1 guarantee to meet the manning requirement of the Power Plant;
in case of any vacancy, recruit qualified and experienced
staff;
1.2 provide relevant class and site training for new employees,
to train them to be qualified employees for their duties;
1.3 ensure the continuity of training programs, the staff
training shall include safety measures, O & M procedures, and
establish relevant examination and promotion system;
1.4 provide other necessary services related to recruitment and
training.
2 Operation of Power Plant
2.1 Anhui Power shall maintain, operate, commission and inspect
the Power Plant:
1) to enable the Power Plant to be in good condition
during the term of the Joint Venture;
2) to maintain high availability and efficiency of
generation facilities of the Power Plant;
3) to minimize the occurrence of accidents and damages,
and in case of accidents and damages, to minimize
their duration.
2.2 provide to the Joint Venture, on a timely basis and at
regular intervals, reports on operation, repairs, tests,
maintenance and examination of the Units;
2.3 carry out the performance test stipulated by the Ministry of
Electric Power for similar coal-fired power plants;
2.4 guarantee that the Power Plant shall abide by all applicable
laws, regulations, safety rules and other stipulations.
2.5 perform relevant obligations and responsibilities of the
Joint Venture related to operation of the Power Plant as
stipulated in the "Interconnection Contract" and "Dispatch
Contract"; if any reduction of power generation occurs due to
the responsibility of Anhui Power, Anhui Power shall
indemnify the Joint Venture from losses incurred by such
reductions. As an operator of the Power Plant, Anhui Power
shall indemnify the Joint Venture for any penalties under the
relevant provisions of this Contract;
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2.6 be responsible for daily maintenance, overhauls and repairs,
and planned or emergency maintenance;
2.7 make annual generation and maintenance plan in accordance
with the "Operation and Offtake Contract" and implement the
same;
2.8 dispose of all the unnecessary materials and wastes of the
Power Plant.
3 Management
Anhui Power shall
3.1 keep the Power Plant in good operation condition and
appropriate level of spare parts reservation according to
good operational practices of similar coal-fired power
plants;
3.2 be responsible for management of maintenance of the Power
Plant;
3.3 in the event of any emergency or unusual event affecting the
normal operation of the Power Plant, take all necessary
actions to minimize injury to persons and damage to the Power
Plant and, immediately report to the Joint Venture the nature
of such emergency or unusual event.
4 Procurement
Anhui Power shall
4.1 check regularly needs of spare parts, consumable and
materials of the Power Plant (considering the designed life
of equipment, actual maintenance records and any technical
specification changes), and, draw out corresponding plans and
do the purchase according to these plans;
4.2 be responsible for organizing the coal supply, and ensure
enough fuel for continuous, steady and safe operation of the
Power Plant, at least to meet the needs of production of the
Minimum Generation Quantity.
5 Statements and reports
Anhui Power shall, before delivery of the first Unit,
provide suggestions on forms of the following daily,
monthly and annual reports, and determine the forms in
consultation with the Joint Venture.
5.1 Daily reports
Anhui Power shall provide the Joint Venture with daily
reports on daily operation of the Power Plant, including
without limitation the following items:
1) net generation volume of each Unit;
2) coal consumption of each Unit;
3) causes for deviation of each Unit from the daily
load curve;
4) description of emergencies or unusual events
resulting in deduction of power generation and
injuries.
5.2 Monthly reports
Anhui Power shall, within the first 10 days of each month,
provide to the Company a monthly report on the performance
of the Units for the previous month. The report shall
include, but not be limited to the following:
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1) statistical statement on operation in the form
required by the Ministry of Electric Power;
2) major repair and maintenance activities carried out
during the previous month, and those planned for
the next month;
3) expenses of the previous month and those planned
for the next month;
4) statistical statement of safety record during the
previous month;
5) summary of unusual events and emergencies during
the previous month, and measures already taken by
Anhui Power to mitigate the effects of same.
5.3 Annual Report
Anhui Power shall, within 60 days after the end of each
calendar year, submit to the Joint Venture an annual
report of such calendar year. The annual report shall
include but not be limited to the following:
1) annual operational data;
2) annual repair and maintenance data;
3) annual safety record and statistics of accidents;
4) annual financial statement;
5) summary of any disputes relating to the Power Plant;
6) environmental monitoring;
7) other data at reasonable request of the Joint Venture.
5.4 Other reports
Anhui Power shall provide:
1) a report on safety status of the Power Plant, with
data on personal and material damages, as required by
relevant authority;
2) other reports at reasonable request of the Joint
Venture.
6 Access to the Power Plant
6.1 Anhui Power shall provide all necessary working and living
facilities to the resident representatives of the Joint
Venture in the Power Plant.
6.2 Anhui Power shall allow representatives or consultants from
the Joint Venture to inspect and monitor the operation of the
Power Plant at any time.
6.3 Anhui Power shall, upon request of the Joint Venture, allow
the Joint Venture or its representatives to have access at
any time to any information, data and records held by Anhui
Power.
7 Other responsibility
Anhui Power shall be responsible for responding to other
requests from relevant authorities concerning the Power
Plant.
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Appendix IV Coal Specifications and Permissible Deviation Range
Item Spec. Deviation
---- ----- ---------
carbon (%) 52 +/-3
hydrogen (%) 3.2 +/-0.3
nitrogen (%) 1.24 +/-0.1
sulphur (%) 0.45 +/-0.03
oxygen (%) 3.4 +/-0.5
ash (%) 28 +/-4
water content (%) 8.45 +/-0.05
fixed water (%) 1.52 +/-0.20
vaporized substances (%) 16 +/-1
low heat value (Kcal kg) 5000 +/-300
ash melting point t1,t2,t3)1500C t1,t2,t3)1500C
grindability (%) 80 +/-1
Ash Components:
SiO2 47.21 +/-1
TiO2 1.67 +/-1.7
Al2O3 35.37 +/-1
Fe2O3 4.71 +/-0.2
MgO 1.26 +/-0.01
CaO 2.42 +/-0.1
Na2 O1.57 +/-0.12
K2O 1.57 +/-0.03
Dust, Electric Resistance Ratio
27C 5.28x109 ohm/cm
100C 2.44x1012 ohm/cm
120C 3.03x1012 ohm/cm
150C 3.60 x1012 ohm/cm
180C 2.19x1012 ohm/cm
NO IMPURITIES: no impurities shall be contained in the coal delivered,
including without limitation bones, stones, pieces of iron and wood. No oil
or other substances shall be added to the coal in order to change its heat
value without prior consent from the Buyer.
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Appendix V Necessary Insurance
1 Third Party Liability
2 Life injury and Medical Care
3 Enterprise Property (Substitute Value)
4 Vehicles (Vehicles and the Third Party Liability)
5 Owner Liability
6 Profit Loss
7 Marine Cargo
8 Construction and Installation
9 Water Transport and Land Transport Cargo
10 Boiler and Machinery (including construction and operation
periods)
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[***] Filed separately with the Commission pursuant to a request for
confidential treatment.
Appendix VI Common Auxiliary Facilities Utilization and Management
[***]
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Appendix A
List and Description of Common Facilities
1 Coal Pier
2 Coal Transportation Passage
3 Civil Construction of Circulating Pump House and Water Leading Pipe
4 Ash Removal Tunnel and Pipe
5 Civil Construction of the Grid Control Room
6 Water Treatment Chamber
7 Coal Transportation Central Room
8 Coal Pool, Dry Coal Bunker and Impeller
9 Land of Main Production Building
10 Auxiliary Production Facilities
11 Welfare (including Dormitories, Guest House and Dinning Hall)
12 Other Public Facilities (including Bathing Rooms, Nursery, Kindergarten,
Administration Building, Recreation Center and Entry Access)
