News Release
20 Nov 2007

China Everbright International Acquires Waste Water Treatment Project in Jiangyin Enters Water Industry in Jiangsu Province

China Everbright International Limited ("Everbright International" or the "Company") (SEHK stock code: 0257) announced that it has entered into a "joint venture agreement" ("Jiangyin JV") withJiangyin City Xin Guo Lian Investment and Development Co., Ltd. through its wholly-owned subsidiary to acquire four waste water treatment plants in Jiangyin City, Jiangsu Province on 16 November 2007.

The two parties will invest a total of RMB624 million to acquire the plants. Of the total investment, Everbright International will contribute 70% of the amount, or RMB437 million. The project is expected to generate profits for the Company immediately after handover is completed in January 2008.

Jiangyin JV will acquire four waste water treatment plants ("Jiangyin Waste Water Treatment Project"), namely Binjiang Waste Water Treatment Plant, Chengxi Waste Water Treatment Plant, Shizhuang Waste Water Treatment Plant and Chengshi Waste Water Treatment Plant, by way of TOT (Transfer-operate-transfer) and BOT (Build-operate-transfer). Jiangyin JV will be responsible for the upgrade and expansion work of Jiangyin Waste Water Treatment Project, which is expected to be completed by the end of 2008. By then, it will be able to treat water in compliance with the National Grade 1A discharge standards. Its total processing capacity will increase to 190,000 tonnes per day.

At the same time, the two parties signed a "Concession Right Agreement" with Jiangyin Construction Bureau in relation to the Jiangyin Waste Water Treatment Project, and entered a "Waste Water Treatment Service Agreement" with Jiangxin Construction Bureau and Jiangyin Finance Bureau. Concession rights of the Jiangyin Waste Water Treatment Project will run for 30 years and the waste water treatment fee will be RMB2.1 per tonne.

Located in the south-eastern region of Jiangsu Province, Jiangyin City connects north with Yangtze River and south with Taihu Lake. Benefiting from its strategic location within the booming Yangtze River delta region, the city, with a population of about 1,180,000 citizens, boasts rapid economic growth and has been ranked first among 100 counties in China for five consecutive years.

Mr. Chen Xiaoping, Chief Executive Officer of Everbright International, said, "As the Group's first water treatment project in Jiangsu Province, Jiangyin Waste Water Treatment Project will help us tap into the lucrative market in the province and is essential to the future development of our environmental protection business. Water consumption in Jiangyin City (including rural areas) is approximately 700,000 tonnes per day but the current waste water treatment capacity for urban areas is only 190,000 tonnes per day, translating into huge development potential for the city. Operation of the Jiangyin Waste Water Project will substantially enhance the city's waste water treatment capacity."

Mr. Chen concluded, "Seeing the growing concern for environmental protection from the PRC government as well as the importance on the improvement of the polluted Taihu Lake from the Jiangyin Municipal Government, we believe the successful operation of the Jiangyin Waste Water Treatment Project will greatly enhance our branding in the industry and lays the foundation for securing other waste water treatment projects along the Taihu Lake. After the acquisition is completed, the Company will continue to negotiate with the Jiangyin municipal government in relation to operating or acquiring waste water treatment facilities in rural and urban areas, with an aim to ‘integrate the plants and sewage piping network in the urban and rural areas as one system', and thus generating promising profits for the Company."