China Windpower : MAJOR TRANSACTION FINANCE LEASE ARRANGEMENTS

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(incorporated in Bermuda with limited liability)

(Stock Code: 182)

THE FINANCE LEASE ARRANGEMENTS

Reference is made to the announcement of the Company dated 23 March 2017 in relation to Finance Lease Arrangement I entered into between the Group and Huaneng Tiancheng (as lessor).

The Company is pleased to announce that on 9 August 2017, Jingmen Lixi (as lessee), Huaneng Tiancheng (as lessor), and HNEE (as supplier), entered into Finance Lease Arrangement II, pursuant to which (i) Huaneng Tiancheng agreed to purchase Equipment II from HNEE, at a total consideration of not more than RMB260,000,000 (equivalent to approximately HK$302,666,000.00); and (ii) Huaneng Tiancheng agreed to lease Equipment II to Jingmen Lixi for a term of 13 years, to be payable in 52 quarterly installments at an aggregate lease payments of approximately RMB379,297,405.37 (equivalent to approximately HK$441,540,109.59).

As the Finance Lease Arrangements were entered into with the same lessor within a 12-month period, the transactions contemplated thereunder are required to be aggregated pursuant to rules

14.22 and 14.23 of the Listing Rules. As one or more of the applicable percentage ratio(s) (as defined under the Listing Rules) in respect of the Finance Lease Arrangements (including the transactions contemplated under related agreements) in aggregate exceeds 25% but are less than 100%, the entering into of the Finance Lease Arrangements (including the transactions contemplated under related agreements), in aggregate, constitute a major transaction of the Company under the Listing Rules.

A special general meeting will be convened and held for the shareholders to consider and, if thought fit, approve Finance Lease Arrangement II (including the transactions contemplated under the related agreements).

A circular containing, among others, details of the Finance Lease Arrangements (including the transactions contemplated under related agreements); other information as required to be disclosed under the Listing Rules and the notice of the special general meeting will be despatched to the shareholders on or before 30 August 2017.

INTRODUCTION

Reference is made to the announcement of the Company dated 23 March 2017 in relation to Finance Lease Arrangement I entered into between the Group and Huaneng Tiancheng (as lessor).

The Company announces that on 9 August 2017, Jingmen Lixi (as lessee), Huaneng Tiancheng (as lessor) and HNEE (as supplier) entered into Finance Lease Arrangement II pursuant to which (i) Huaneng Tiancheng agreed to purchase Equipment II from HNEE, at a total consideration of not more than RMB260,000,000 (equivalent to approximately HK$302,666,000.00); and (ii) Huaneng Tiancheng agreed to lease Equipment II to Jingmen Lixi for a term of 13 years, to be payable in

52 quarterly installments at an aggregate lease payments of approximately RMB379,297,405.37 (equivalent to approximately HK$441,540,109.59).

FINANCE LEASE ARRANGEMENT II

1. Principal Terms of Sale and Purchase Agreement II and Finance Lease Agreement II
2. Date: 9 August 2017
3. Parties

   Purchaser/Lessor: Huaneng Tiancheng, which is a limited liability company incorporated in the PRC and is principally engaged in the business of finance leasing. To the best of the Directors' knowledge, information and belief after having made all reasonable enquiries, Huaneng Tiancheng and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

   Supplier: HNEE

   Lessee: Jingmen Lixi

4. Sale and lease arrangement

   Pursuant to Sale and Purchase Agreement II and Finance Lease Agreement II, Huaneng Tiancheng has agreed to purchase Equipment II from HNEE at a total consideration of not more than RMB260,000,000.00 (equivalent to approximately HK$302,666,000.00). The total consideration was agreed among Huaneng Tiancheng, HNEE and Jingmen Lixi with reference to the purchase price of Equipment II. Huaneng Tiancheng shall then lease Equipment II to Jingmen Lixi for a term of 13 years, commencing from the day Huaneng Tiancheng pays the first installment of purchase price of Equipment II.

5. Lease payments

   The aggregate lease payments (subject to adjustments) payable by Jingmen Lixi to Huaneng Tiancheng is approximately RMB379,297,405.37 (equivalent to approximately HK$441,540,109.59) (which is the sum of the lease costs of RMB260,000,000, the estimated aggregate lease interest of RMB108,497,405.37 and handling fees of RMB10,800,000.00). The lease payments are payable in 13 years through 52 quarterly installments. The lease interest is calculated at a floating rate and shall be adjusted with reference to the benchmark interest rate for RMB loans with a maturity period of above 5 years as promulgated by the People's Bank of China from time to time.

   The aggregate lease payments were agreed between Huaneng Tiancheng and Jingmen Lixi with reference to the prevailing market interest rate for finance leases for comparable equipment and is to be settled out of Jingmen Lixi's internal resources. The lease payments shall be paid into the bank account designated by Huaneng Tiancheng.

6. Security deposit

   Jingmen Lixi shall pay a security deposit of RMB10,400,000.00 (equivalent to approximately HK$12,106,640.00) to Huaneng Tiancheng as guarantee of its obligations under Finance Lease Agreement II. Such deposit shall be used to offset any default of payment by Jingmen Lixi under Finance Lease Agreement II.

7. Lessee's option to purchase

   The legal ownership of Equipment II will be vested in Huaneng Tiancheng throughout the lease period. Upon the end of the lease period, provided that Jingmen Lixi has fulfilled all of its obligations under Finance Lease Agreement II, Jingmen Lixi has the option to purchase Equipment II at a nominal consideration of RMB1.

8. Lessee's option to early purchase

   At any time after the expiration of 24 months from the day on which the lease interest starts to accrue until expiration of 132 months from the day on which lease interest starts to accrue, Jingmen Lixi is eligible to purchase Equipment II at a date (the "Equipment II Early Purchase Date") within the abovementioned period by serving a 30 business days' prior written notice to Huaneng Tiancheng (and after obtaining the written consent from Huaneng Tiancheng) at a consideration being the sum of (i) all outstanding unpaid lease interest and late fees (if any) up to the Equipment II Early Purchase Date; (ii) residual lease costs; (iii) the nominal consideration of RMB1; and (iv) all other expenses incurred as a result of the early purchase of Equipment II.

   An additional early purchase compensation is payable by Jingmen Lixi and it ranges from nil to 18% on all residual lease costs depending on when the early purchase takes place.

9. Security Agreements

   In order to secure Jingmen Lixi's obligations under Finance Lease Agreement II, the following security documents, among others, have also been executed on 9 August 2017 (the "Security Agreements"):
10. Mortgage Agreement II

    Although the ownership of Equipment II shall be transferred to Huaneng Tiancheng under Finance Lease Arrangement II, Equipment II is treated as security and Jingmen Lixi has executed Mortgage Agreement II pursuant to which Jingmen Lixi agreed to charge Equipment II to secure the obligations of Jingmen Lixi under Finance Lease Agreement II, including the aggregate lease payments and other amounts due to Huaneng Tiancheng.

11. Share Pledge Agreement II

    Century Concord (a wholly-owned subsidiary of the Company and the direct shareholder of Jingmen Lixi) has executed Share Pledge Agreement II in favour of Huaneng Tiancheng, pursuant to which Century Concord has agreed to pledge all its equity interest in Jingmen Lixi (including, among others, any dividends declared) in favour of Huaneng Tiancheng, to secure the obligations of Jingmen Lixi under Finance Lease Agreement II, including the aggregate lease payments and other amounts due to Huaneng Tiancheng.

12. Guarantee Agreement II

    The Company has executed Guarantee Agreement II in favour of Huaneng Tiancheng, pursuant to which the Company has agreed to provide a corporate guarantee to secure the obligations of Jingmen Lixi under Finance Lease Agreement II, including the aggregate lease payments and other amounts due to Huaneng Tiancheng.

13. Shortfall Make-up Agreement

    Century Concord has executed a shortfall make-up agreement in favour of Huaneng Tiancheng, pursuant to which Century Concord has agreed to irrevocably make up for the shortfall in outstanding payments if Jingmen Lixi fails to meet its payment obligations as they fall due under Finance Lease Agreement II.

14. Accounts Receivable Security Agreement II

Jingmen Lixi has executed Accounts Receivable Security Agreement II in favour of Huaneng Tiancheng, pursuant to which Jingmen Lixi has agreed to pledge its electricity usufruct in favour of Huaneng Tiancheng to secure the obligations of Jingmen Lixi under Finance Lease Agreement II, including the aggregate lease payments and other amounts due to Huaneng Tiancheng.