CGN NEW ENERGY HOLDINGS CO., LTD. Discloseable Transaction FX Hedging Contracts

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1 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. CGN NEW ENERGY HOLDINGS CO., LTD. (incorporated in Bermuda with limited liability) (Stock code: 1811) Discloseable Transaction FX Hedging Contracts The Board is pleased to announce that on 3 July 2018, CGN Daesan entered into the FX Hedging Contracts to hedge against USD/EUR/CAD currency risks, in respect of the Principal Amount of approximately USD29.2 million, EUR10.8 million (equivalent to approximately USD13.3 million) and CAD165.8 million (equivalent to approximately USD125.4 million) respectively. Reference is made to the announcement of the Company dated 23 April 2018, CGN Daesan entered into the EPC Contract with an independent contractor in relation to engineering, procurement and construction work of its biomass power plant in a total consideration of KRW295 billion (equivalent to approximately USD277 million, inclusive of all taxes required to be paid by the counterparty under the EPC Contract other than custom duties). Reference is also made to the announcement of the Company dated 26 June 2018, CGN Daesan entered into the Fuel Supply Agreement in relation to the supply of 315,000 metric tons per annum of industrial wood pellets to CGN Daesan commencing in In light of such contracts for construction and the expected fuel cost of the first two years of operation, CGN Daesan has entered into the FX Hedging Contracts to provide an effective way to hedge against the foreign currencies fluctuation risk. As the highest applicable percentage ratio under Rule of the Listing Rules in respect of the Principal Amount under the FX Hedging Contracts exceeds 5% but all are below 25%, the entering into of the FX Hedging Contracts and the transactions contemplated thereunder constitute a discloseable transaction for the Company, and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. 1

2 FX HEDGING CONTRACTS On 3 July 2018, CGN Daesan entered into the FX Hedging Contracts to hedge against USD/EUR/CAD currency risks, in respect of the Principal Amount of USD29.2 million, EUR10.8 million (equivalent to approximately USD13.3 million) and CAD165.8 million (equivalent to approximately USD125.4 million) respectively. The Principal Amount was determined after taking into account, among others, the contract sum and payment schedule under the EPC contract, and the estimated consumption schedule and the price of the industrial wood pellets under the Fuel Supply Agreement. The FX Hedging Contracts comprise a set of contracts entered into between CGN Daesan and Shinhan Bank and KEB Hana Bank, respectively. The FX Hedging Contracts are a type of hedging instrument. In essence, pursuant to the FX Hedging Contracts, CGN Daesan will buy USD/EUR/CAD against KRW on a pre-agreed settlement date, at an effective USD/EUR/CAD:KRW exchange rate to be determined on the relevant trade s settlement date. All settlement of the FX Hedging Contracts will be net cash settled in USD, EUR or CAD (as the case may be). The FX Hedging Contracts require no initial cash outlay or purchase cost. Summarised below are the principal terms of each of the FX Hedging Contracts: FX Hedging Contracts entered into between CGN Daesan and Shinhan Bank Date of the FX Hedging Contracts : 3 July 2018 Aggregate amount and currency : USD14.6 million, EUR5.4 million and CAD82.9 million Rates : The average exchange rate of USD:KRW is 1,096.70, EUR:KRW is 1, and CAD:KRW is , which were determined based on, among others, the prevailing exchange rate of USD, EUR, CAD and KRW Settlement period : From 31 October 2018 to 30 August

3 FX Hedging Contracts entered into between CGN Daesan and KEB Hana Bank Date of the FX Hedging Contracts : 3 July 2018 Aggregate amount and currency : USD14.6 million, EUR5.4 million and CAD82.9 million Rates : The average exchange rate of USD:KRW is 1,097.90, EUR:KRW is 1, and CAD:KRW is , which were determined based on, among others, the prevailing exchange rate of USD, EUR, CAD and KRW Settlement period : From 31 October 2018 to 30 August 2022 As at the date of this announcement, to the best of the Directors knowledge, information and belief, and having made all reasonable enquiries, the counterparties to the FX Hedging Contracts and their ultimate beneficial owners are third parties independent of the Company and its connected persons. REASONS FOR AND BENEFITS OF ENTERING INTO THE FX HEDGING CONTRACTS Reference is made to the announcement of the Company dated 23 April 2018, CGN Daesan entered into the EPC Contract with an independent contractor in relation to engineering, procurement and construction work of its biomass power plant in a total consideration of KRW295 billion (equivalent to approximately USD277 million). Reference is also made to the announcement of the Company dated 26 June 2018, CGN Daesan entered into the Fuel Supply Agreement in relation to the supply of 315,000 metric tons per annum of industrial wood pellets to CGN Daesan commencing in In light of such contracts for construction and the expected fuel cost of the first two years of operation, CGN Daesan has entered into the FX Hedging Contracts to provide an effective way to hedge against the foreign currencies fluctuation risk for the payment under the aforementioned contracts. The Directors consider that entering into of the FX Hedging Contracts will stabilize the Company s financial results and is therefore of benefit to the Company. The Directors consider that the terms of the FX Hedging Contracts are on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole. 3

4 IMPLICATIONS UNDER THE LISTING RULES As the highest applicable percentage ratio under Rule of the Listing Rules in respect of the Principal Amount under the FX Hedging Contracts exceeds 5% but all are below 25%, the entering into of the FX Hedging Contracts and the transactions contemplated thereunder constitute a discloseable transaction for the Company, and is subject to the notification and announcement requirements under Chapter 14 of the Listing Rules. INFORMATION ON THE PARTIES The Company The Company is a diversified independent power producer in Asia in terms of fuel type and geography, with a portfolio of gas-fired, coal-fired, oil-fired, hydro, wind, solar, cogen and fuel cell power generation projects and a steam project in the PRC and Korea. CGN Daesan CGN Daesan is established in Korea and an indirect wholly-owned subsidiary of the Company. CGN Daesan is principally engaged in the operation of 507MW oil-fired combined cycle power plant. Shinhan Bank Shinhan Bank is a licensed bank incorporated in Korea and has operated one branch in Hong Kong. KEB Hana Bank KEB Hana Bank is a licensed bank incorporated in Korea and has operated one branch in Hong Kong. 4

5 DEFINITION In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings: Board CAD CGN Daesan Company Director(s) EPC Contract EUR Fuel Supply Agreement FX Hedging Contracts the board of Directors Canadian dollars, the lawful currency of Canada CGN Daesan Power Co., Ltd., an indirect wholly-owned subsidiary of the Company incorporated under the laws of Korea CGN New Energy Holdings Co., Ltd., a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (stock code: 1811) the director(s) of the Company the engineering, procurement and construction contract dated 23 April 2018 entered into between CGN Daesan and Hyundai Engineering & Construction Co., Limited for the provision of the design, engineering, procurement, construction, installation, testing, commissioning, completion and rectification of defects of a biomass power plant in Korea European dollars, the lawful currency in the European Union the fuel supply agreement dated 24 April 2018 entered into between CGN Daesan and Pinnacle Renewable Holdings Inc. for the supply of 315,000 metric tons per annum of industrial wood pellets to CGN Daesan beginning in 2021 a set of foreign exchange hedging contracts entered into between CGN Daesan with Shinhan Bank and KEB Hana Bank, respectively, to hedge against the foreign currencies fluctuation risk in relation to EUR/USD/CAD against KRW 5

6 Group Hong Kong KRW Korea Listing Rules PRC Principal Amount Share(s) Shareholder(s) Stock Exchange USD the Company and its subsidiaries from time to time Hong Kong Special Administrative Region of the PRC Korean won, the lawful currency of Korea the Republic of Korea the Rules Governing the Listing of Securities on the Stock Exchange The People s Republic of China excluding, for the purpose of this announcement, Hong Kong, Macau Special Administrative Region and Taiwan The aggregate of the agreed principal amount and maximum limit of USD29.2 million, EUR10.8 million (equivalent to approximately USD13.3 million) and CAD165.8 million (equivalent to approximately USD125.4 million) under the FX Hedging Contracts ordinary share(s) of HK$ each in the share capital of the Company holder(s) of the Shares The Stock Exchange of Hong Kong Limited United States dollars, the lawful currency of the United States of America % per cent. By Order of the Board CGN New Energy Holdings Co., Ltd. Li Yilun President and Executive Director Hong Kong, 3 July 2018 For the purpose of illustration only and unless otherwise stated, conversion USD to EUR and USD to CAD in this announcement is based on the exchange rate of USD1.00 to EUR0.86 and USD1.00 to CAD1.32. Such conversion should not be construed as a representation that any amounts have been, could have been, or may be, exchanged at this or any other rate. 6

7 As at the date of this announcement, the Board comprises seven Directors, namely: Chairman and non-executive Director : Mr. Chen Sui President and executive Director : Mr. Li Yilun Non-executive Directors : Mr. Yao Wei and Mr. Xing Ping Independent non-executive Directors : Mr. Leung Chi Ching Frederick, Mr. Yang Xiaosheng and Mr. Wang Minhao 7