Lijiang Longbahe River Hydropower Project Progress Report

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3 Lijiang Longbahe River Hydropower Project Progress Report Our company has commissioned by you to do the project supervision of Longbahe River Hydropower Plant for 3 years. Since Jun. 2006, 12 single constructions have been started to go to operation generally. During the construction, the project has overcome many difficult problems. Completed constructions: Until Dec.30, 2008, 6 constructions had been finished. These 6 constructions are Project Site Engineering, Penstock Construction, Forebay and Sluiceway Construction, Diversion Dam Construction, Inverted Siphon Construction and 35KV Transmission Line Installation project. Uncompleted Constructions: With regard to Inverted Siphon and Penstock Installation project, Inverted Siphon Manufacturing and Installation and Penstock Manufacturing had finished, and Penstock installation is under preparation. It is estimated to install penstock after Spring Festival. Intake Tunnel Construction: it has finished about 1650m with 600m left because of complicated geological condition and high difficulty in construction. Construction pouring and curing of Tunnel: only all 2# tunnel linings and part 3# tunnel linings are completed. Diversion Canal Construction: among its 1# - 4# constructions, 6230m are finished and 4350m are left. Equipment Purchase and Manufacturing: 8 Equipment purchase contracts were signed till Dec.30, Two turbine-generator sets have been manufactured completely in June, Double Beam Bridge Crane: on-site installation and debugging has been finished. Affiliated equipment and HV/LV electric equipment has been ordered, and most of them meet the terms of delivery. These affiliated equipment include Turbine Intake Ball Valve, Oil, Water and Gas Auxiliary Machine System, Microcomputer Excitation System, Governor, Monitor and Protection System, 6KV Distribution Equipment High Tension Switch Gear, 35kV Distribution Equipments, Main Transformer etc.

4 Summary of Investment: No Name Price (Ten Thousand Yuan) Price of Completed Constructions (Ten Thousand Yuan) 1 Project Site Engineering Intake Dam Construction Intake Tunnel Construction Diversion Canal Construction - Bid 1# Diversion Canal Construction - Bid 2# Diversion Canal Construction - Bid 3# Diversion Canal Construction - Bid 4# Penstock Construction Forebay and Sluiceway Construction 35kV Transmission Line Installation Electromechanical Equipment Installation and Construction Inverted Siphon Construction Inverted Siphon and Penstock Installation Remarks Engineering Yunnan Luqiao Lijiang Power Engineering Lijiang Power Engineering Engineering Engineering

5 14 Survey & Design Turbine-Generator Set and Affiliated Equipment Purchase Transformer Purchase Heibaishui Hydropower Institute Group Design 17 Double Beam Bridge Crane Purchase kV Distribution Equipments High Tension Switch Gear Purchase Monitor and Protection System Turbine Intake Ball Valve Purchase Oil, Water and Gas Auxiliary Machine System Purchase Microcomputer Excitation System of the Generator Sets Purchase Governor Purchase Financial Cost during Construction period Management Cost during Construction period Other Cost 合计 In Total Lijiang Xingneng Small Hydropower Development Co., Ltd (Seal) Principal: Gengliang Li (Signature) Supervision : Lijiang City Construction Supervision Co., Ltd (Seal) Principal: Wensheng Liu (Signature) Dated: 30/12/2008

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