Power Assets Holdings Limited — Proxy Solicitation & Information Statement 2007

Nov 19, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Hongkong Electric Holdings Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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香港電燈集團有限公司 Hongkong Electric Holdings Ltd.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 0006)

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 5 to 11 of this circular and a letter from the Independent Board Committee is set out on page 12 of this circular.

The text of a letter of advice from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 32 of this circular.

A notice convening the EGM will be despatched to the Shareholders in due course.

20 November 2007

CONTENT

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from CLSA Equity Capital Markets Limited . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

— i —

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

“Agreement”	the agreement dated 30 October 2007 between CKI and
	the Company in relation to the Transaction
“associate(s)”,	have the meanings ascribed to them under the Listing
“connected person(s)” and	Rules
“controlling shareholder(s)”
“Associated Corporations”	has the meaning ascribed to it under Part XV of the SFO
“Board”	the board of Directors
“Bridge Facility”	the bridge facility in the maximum principal amount of
	CAD$700,000,000 (approximately HK$5,684,000,000) to
	be obtained by Canco
“CAD$”	Canadian dollars, the lawful currency of Canada
“Canadian GAAP”	generally accepted accounting principles in Canada
“Canco”	Stanley Power Inc., a limited company incorporated in
	British Columbia, Canada
“CKI”	Cheung Kong Infrastructure Holdings Limited, a
	company incorporated in Bermuda with limited liability,
	the shares of which are listed on the Main Board of the
	Stock Exchange (Stock Code: 1038)
“CKI Announcement”	an announcement issued by CKI dated 15 October 2007
	in relation to the Offer and the acquisition of TransAlta
	Power Units
“CKI Group”	CKI and its subsidiaries
“CLSA”	CLSA Equity Capital Markets Limited, a licensed
	corporation for Types 4 (advising on securities) and 6
	(advising on corporate finance) regulated activities under
	the SFO
“Company”	Hongkong Electric Holdings Limited, a company
	incorporated in Hong Kong with limited liability, the
	shares of which are listed on the Main Board of the
	Stock Exchange (Stock Code: 0006)

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	DEFINITIONS
“Compulsory Acquisition”	the compulsory acquisition pursuant to Section 3.20 of
	the Limited Partnership Agreement
“Directors”	the directors of the Company
“EGM”	the extraordinary general meeting of the Company to be
	held for the purpose of approving the Transaction and
	all other related transactions and matters contemplated
	under the Agreement
“General Partner”	TransAlta Power Ltd., the general partner of TransAlta
	Power, a corporation incorporated under the Canada
	Business Corporation Act
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	Hong Kong Special Administrative Region of the
	People’s Republic of China
“Independent Board Committee”	an independent committee of the Board, consisting of
	Mr. Ralph Raymond Shea, formed to advise the
	Independent Shareholders in respect of the Transaction
“Independent Financial Adviser”	the independent financial adviser to the Independent
	Board Committee and the Independent Shareholders in
	relation to the Transaction
“Independent Shareholders”	Shareholders other than CKI and its associates
“Joint Announcement”	a joint announcement issued by CKI and the Company
	dated 30 October 2007 in relation to the Transaction
“Latest Practicable Date”	13 November 2007, being the latest practicable date prior
	to the printing of this circular for the purpose of
	ascertaining certain information contained in this circular
“Limited Partnership Agreement”	the limited partnership agreement of TransAlta Power
	dated as of 16 December 1997, as amended and restated
	from time to time, most recently as of 26 January 2004
	and as may be further amended in accordance with the
	Offer

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DEFINITIONS

“Listing Rules”	The Rules Governing the Listing of Securities on the
	Stock Exchange
“Offer”	has the meaning as set out under the section entitled
	“Subject of the Transaction” in this circular
“Resolution”	the ordinary resolution to be proposed at the EGM to
	approve the Transaction and all other related transactions
	and matters contemplated under the Agreement
“Second Step Transaction”	the acquisition by Canco of the balance of the TransAlta
	Power Units as soon as practicable and in any event
	within a period of 6 months following the date on which
	Canco first takes up and acquires TransAlta Power Units
	pursuant to the Offer by way of Compulsory Acquisition,
	Subsequent Acquisition Transaction, arrangement,
	reorganization, consolidation, recapitalization or other
	type of acquisition transaction or transactions
“SFO”	Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Shareholder(s)”	shareholder(s) of the Company
“Shares”	ordinary shares of HK$1 each in the share capital of the
	Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subsequent Acquisition	the Compulsory Acquisition that may be completed if
Transaction”	the Offer is accepted by TransAlta Unitholders holding
	662/3% or more of the TransAlta Power Units within 90
	days of the date of the Offer
“Support Agreement”	the support agreement dated 14 October 2007 (Calgary
	time) entered into between CKI and TransAlta Power
“TA Cogen”	TransAlta Cogeneration, L.P., a limited partnership
	established pursuant to the laws of the Province of
	Ontario, Canada
“Transaction”	the purchase of 50% of the entire issued share capital of
	Canco pursuant to the Agreement

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DEFINITIONS

“TransAlta Corporation” TransAlta Corporation, a corporation existing under the laws of Canada “TransAlta Power” TransAlta Power, L.P., a limited partnership established pursuant to the laws of the Province of Ontario, Canada, the units of which are listed on the Toronto Stock Exchange “TransAlta Power Unit(s)” the limited partnership unit(s) of TransAlta Power “TransAlta Power Unitholders” the registered holders of TransAlta Power Units from time to time “%” per cent.

The figures in CAD$ are converted into HK$ at the rate of CAD$1:HK$8.12 throughout this circular for indication purposes only.

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LETTER FROM THE BOARD

香港電燈集團有限公司 Hongkong Electric Holdings Ltd.

於香港註冊成立的有限公司 Incorporated in Hong Kong with limited liability 股份代號 Stock Code: 0006

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Registered office: 44 Kennedy Road, Hong Kong

Executive Directors:

Mr. FOK Kin Ning, Canning (Chairman) Mr. TSO Kai Sum (Group Managing Director) Mrs. CHOW WOO Mo Fong, Susan (also alternate to Mr. FOK Kin Ning, Canning and Mr. Frank John SIXT)

Mr. Andrew John HUNTER

Mr. KAM Hing Lam

Mr. LEE Lan Yee, Francis

Non-Executive Directors:

Mr. Ronald Joseph ARCULLI Mr. George Colin MAGNUS Mr. YEE Lup Yuen, Ewan

Independent Non-Executive Directors:

Mr. Holger KLUGE Mr. Ralph Raymond SHEA

Mr. WONG Chung Hin

Mr. LI Tzar Kuoi, Victor

Mr. Neil Douglas MCGEE

Mr. Frank John SIXT

Mr. WAN Chi Tin

20 November 2007

To the Shareholder(s)

Dear Sir or Madam,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

1. INTRODUCTION

The Board announced in the Joint Announcement that on 30 October 2007 (after trading hours), CKI and the Company had entered into the Agreement, pursuant to which CKI agreed to procure the sale of and the Company agreed to purchase or procure the purchase by its subsidiary of, 50% of the entire issued share capital of Canco, the holding vehicle for CKI in respect of the TransAlta Power Units, for a consideration equivalent to CAD$1,000,000 (approximately HK$8,120,000); plus 50% of the total costs to be incurred by Canco in effecting the Offer (excluding costs paid out of the initial capital of Canco); less 50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement. The Company also agreed to assume on the completion date of the Agreement the guarantee in respect of the Bridge Facility to the

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LETTER FROM THE BOARD

extent of 50% of its amount on a several basis. Based on the offer price of CAD$8.38 (approximately HK$68.05) per TransAlta Power Unit for all the outstanding TransAlta Power Units, it is expected that the total consideration for the Transaction payable by the Company to CKI will not exceed CAD$1,500,000 (approximately HK$12,180,000).

CKI and its associates are currently holding approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction constitutes a connected transaction for the Company under the Listing Rules. The Transaction is conditional upon approval by the Independent Shareholders at the EGM. CKI and its associates will abstain from voting at the EGM.

The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Transaction. The Company has appointed CLSA as the Independent Financial Adviser to advise the Independent Board Committee in respect of the Transaction.

The purpose of this circular is (i) to provide you with further information in respect of the Agreement and the Transaction; and (ii) to set out the opinions and recommendations of the Independent Board Committee and CLSA in relation to the Transaction.

2. DETAILS OF THE AGREEMENT

The agreement

Date

30 October 2007 (after trading hours)

Parties

• (1) CKI; and

• (2) The Company.

CKI and its associates currently hold approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and the Transaction constitutes a connected transaction for the Company under the Listing Rules.

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LETTER FROM THE BOARD

Subject of the Transaction

Pursuant to the Agreement, CKI agreed to procure the sale of and the Company agreed to purchase or cause its subsidiary to purchase 50% of the entire issued share capital of Canco as at the completion date of the Agreement.

As mentioned in the CKI Announcement, CKI has agreed to, either by itself or through one or more direct or indirect wholly-owned subsidiaries of CKI, or any combination thereof, make an offer to purchase all of the outstanding TransAlta Power Units from the TransAlta Power Unitholders on the basis of CAD$8.38 (approximately HK$68.05) in cash per TransAlta Power Unit (the “Offer”). The Offer price is based on a premium of (i) 15.75% of the closing price of the TransAlta Power Unit for the last trading day; (ii) 16.00% of the average closing prices for the last five trading days; and (iii) 15.00% of the average closing prices for the last ten trading days, before signing of the Support Agreement. CKI has decided to make the Offer through Canco.

Consideration

The consideration for the Transaction will be an amount equivalent to:

• (a) CAD$1,000,000 (approximately HK$8,120,000), being 50% of the initial capital in Canco prior to the completion of the Agreement;

Plus

• (b) 50% of the aggregate amount of (i) the amount paid by Canco for the purchase of the TransAlta Power Units deposited under the Offer and acquired by Canco under any Compulsory Acquisition, Subsequent Acquisition Transaction or other Second Step Transaction; (ii) the amount paid for the General Partner’s interest in TransAlta Power; and (iii) the costs of the Offer, Subsequent Acquisition Transaction or other Second Step Transaction and any related transactions; but excluding (iv) any amount or costs as may be satisfied or paid with the said initial capital in Canco;

Less

• (c) 50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement.

The Company also agreed to assume on the completion date of the Agreement the guarantee in respect of the Bridge Facility to the extent of 50% of its amount on a several basis, that is, not exceeding CAD$350,000,000 (approximately HK$2,842,000,000). The number of all the outstanding TransAlta Power Units to be acquired under the Offer is approximately 75,157,723. Based on the offer price of

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LETTER FROM THE BOARD

CAD$8.38 (approximately HK$68.05) per TransAlta Power Unit for all of the outstanding TransAlta Power Units, it is expected that the total consideration for the Transaction from the Company to CKI will not exceed CAD$1,500,000 (approximately HK$12,180,000) payable in cash. The consideration of the Transaction was determined after arm’s length negotiations between the parties on normal commercial terms. The consideration of the Transaction will be funded by the Company’s internal resources and external financings.

Conditions to the Transaction

Completion of the Transaction is conditional upon:

• (i) on or after 4 December 2007 (Calgary time), completion of the acquisition under the Offer of such number of the TransAlta Power Units by Canco representing 66[2] /3% or more of the issued and outstanding TransAlta Power Units; and

• (ii) the Shareholders who are qualified to vote at the EGM approving the Transaction and the related transactions and matters contemplated under the Agreement as required under the Listing Rules.

If the above conditions are not satisfied on or before 28 February 2008 (or such later date as is agreed by the parties to the Agreement), the Agreement shall lapse and the Transaction will not proceed.

3. INFORMATION ON CANCO AND TRANSALTA POWER

Canco is a limited company established pursuant to the laws of the Province of British Columbia, Canada. Canco is currently a wholly-owned subsidiary of CKI and will be used as the holding vehicle for CKI in respect of the TransAlta Power Units.

TransAlta Power is a limited partnership established pursuant to the laws of the Province of Ontario, Canada. It holds investments which are directly or indirectly related to energy supply. TransAlta Power owns 49.99% partnership interest in TA Cogen.

TA Cogen is a limited partnership established pursuant to the laws of the Province of Ontario, Canada. TA Cogen owns interests in five gas-fired cogeneration facilities in Alberta, Ontario and Saskatchewan and in a coal-fired, mine-mouth generation facility in Alberta. The remaining 50.01% partnership interest in TA Cogen is currently held by two wholly-owned subsidiaries of TransAlta Corporation, a third party independent of CKI and its connected persons.

Pursuant to the Agreement, CKI and the Company will nominate an equal number of representatives to be appointed as directors of Canco after completion of the Transaction.

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LETTER FROM THE BOARD

It is intended that the Company will account for the results of Canco as “interest in an associate” immediately after the Transaction. The results and assets of Canco will be equity accounted for in the Group’s financial statements.

Based on the accounts of TransAlta Power, the total asset value of TransAlta Power as at 31 December 2006 was approximately CAD$515,000,000 (approximately HK$4,181,800,000). The total asset value of TransAlta Power as at 30 June 2007 was approximately CAD$442,800,000 (approximately HK$3,595,536,000). The audited net profits before taxation and extraordinary items of TransAlta Power for the two years ended 31 December 2005 and 31 December 2006 were approximately CAD$36,300,000 (approximately HK$294,756,000) and approximately CAD$34,210,000 (approximately HK$277,785,200) respectively. The audited net loss after taxation and extraordinary items of TransAlta Power for the year ended 31 December 2005 was approximately CAD$2,830,000 (approximately HK$22,979,600) and the audited net profits after taxation and extraordinary items of TransAlta Power for the year ended 31 December 2006 was approximately CAD$34,210,000 (approximately HK$277,785,200). The unaudited net profits before taxation and extraordinary items of TransAlta Power for the six months ended 30 June 2007 was approximately CAD$13,300,000 (approximately HK$107,996,000) and the unaudited net loss after taxation and extraordinary items of TransAlta Power for the six months ended 30 June 2007 was approximately CAD$40,600,000 (approximately HK$329,672,000). The above accounts were prepared under the Canadian GAAP.

4. INFORMATION ON THE CKI GROUP

The principal activities of the CKI Group are development, investment and operation of infrastructure businesses in Hong Kong, the Mainland, Australia and the United Kingdom.

5. INFORMATION ON THE GROUP

The principal activity of the Group is the generation of electricity and its transmission and distribution to Hong Kong and Lamma Islands. The Group also seeks investments in infrastructure projects outside Hong Kong. The Company and CKI are partners in several power-related businesses in Australia and a gas distribution network business in the United Kingdom.

6. REASONS FOR THE TRANSACTION

The Transaction reflects the Company’s strategy of investing in infrastructure projects outside Hong Kong. The Directors believe the terms of the Transaction are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

7. LISTING RULES IMPLICATIONS

Any connected person with a material interest in the Transaction, and any other Shareholders and their respective associates with a material interest in the Transaction, shall abstain from voting in respect of the Resolution.

CKI and its associates currently hold approximately 38.87% of the issued share capital of the Company. By virtue of this shareholding interest, CKI is a controlling shareholder of the Company and is accordingly a connected person of the Company. The Transaction constitutes a connected transaction for the Company under the Listing Rules. Completion will be subject to, amongst other things, approval by the Independent Shareholders at the EGM. CKI and its associates will abstain from voting at the EGM. To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, each of CKI and those associates is entitled to exercise control over the voting rights in respect of its Shares.

8. RECOMMENDATIONS

The Directors believe that the entering into of the Agreement, the Transaction and the transactions contemplated thereunder as described herein is in the interests of the Company and the Shareholders as a whole, and that the terms of the Agreement, the Transaction and the transactions contemplated thereunder are fair and reasonable so far as the Shareholders as a whole are concerned.

Accordingly, the Directors recommend the Shareholders to vote in favour of the Resolution, which will be proposed as an ordinary resolution at the EGM.

The Independent Board Committee is required under the Listing Rules to advise the Independent Shareholders in relation to the Transaction. Mr. Ralph Raymond Shea has been appointed to and constitutes the Independent Board Committee to advise the Independent Shareholders in respect of the Transaction. CLSA has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in this regard. Accordingly, your attention is drawn to the letter from the Independent Board Committee set out on page 12 of this circular, which contains its recommendation to the Independent Shareholders, and the text of a letter of advice from CLSA set out on pages 13 to 32 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders.

9. EXTRAORDINARY GENERAL MEETING

The Company will convene the EGM for the purpose of considering and, if thought fit, passing the Resolution as an ordinary resolution. A notice convening the EGM together with a proxy form will be despatched separately to the Shareholders in due course.

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LETTER FROM THE BOARD

10. FURTHER INFORMATION

Your attention is drawn to the additional information set out in the appendix to this circular.

By Order of the Board Hongkong Electric Holdings Limited Fok Kin Ning, Canning Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

香港電燈集團有限公司

Hongkong Electric Holdings Ltd.

於香港註冊成立的有限公司 Incorporated in Hong Kong with limited liability 股份代號 Stock Code: 0006

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Registered office: 44 Kennedy Road, Hong Kong

20 November 2007

To the Independent Shareholder(s)

Dear Sir or Madam,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

I refer to the circular of which this letter forms part. Terms defined in the circular shall have the same meanings when used herein unless the context otherwise requires.

The Independent Board Committee has been formed to advise the Independent Shareholders as to whether, in its opinion, the terms of the Transaction are fair and reasonable and the Transaction is in the interests of the Company and the Shareholders as a whole. CLSA has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Transaction.

I wish to draw your attention to the letter from the Board, as set out on pages 5 to 11 of this circular and the text of a letter of advice from CLSA, as set out on pages 13 to 32 of this circular, both of which provide details of the Transaction.

Having considered the terms of the Agreement, the advice of CLSA and the relevant information contained in the letter from the Board, I am of the opinion that the terms of the Transaction are fair and reasonable so far as the Independent Shareholders are concerned and that the Transaction is in the interests of the Company and the Shareholders as a whole.

Accordingly, I recommend the Independent Shareholders to vote in favour of the Resolution, which will be proposed as an ordinary resolution at the EGM.

Yours faithfully,

The Independent Board Committee of Hongkong Electric Holdings Limited Ralph Raymond SHEA

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

The following is the text of the letter of advice dated 20 November 2007 from CLSA to the Independent Board Committee and the Independent Shareholders in relation to the connected transaction prepared for incorporation in this circular:

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To the Independent Board Committee and the Independent Shareholders

20 November 2007

Dear Sir and Madam,

CONNECTED TRANSACTION

ACQUISITION OF 50% INTEREST IN A SUBSIDIARY OF CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED

We refer to our engagement pursuant to which CLSA Equity Capital Markets Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether or not the terms and conditions of the Transaction, details of which are contained in the circular dated 20 November 2007 (the “Circular”) issued by the Company to its Shareholders, are on normal commercial terms, in the ordinary and usual course of the business of the Company and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

This letter has been prepared for inclusion in the Circular issued by the Company to its Shareholders. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

As disclosed in the announcement made by CKI dated 15 October 2007 (the “CKI Announcement”), CKI, on 14 October 2007 (Calgary time), has entered into a supporting agreement (the “Support Agreement”) with TransAlta Power whereby CKI agrees, either by itself or through one or more of its subsidiaries, or any combination thereof, to make an offer (the “Offer”) any time before 11:59 p.m. (Calgary time) on 29 October 2007 (01:59 p.m. (Hong Kong time) on 30 October 2007) to purchase all of the outstanding TransAlta Power Units from the TransAlta Power Unitholders, for a consideration of CAD$8.38 (equivalent to approximately HK$68.05) in cash per TransAlta Power Unit. We understand that CKI has procured Canco, which is currently wholly-owned by CKI, to make the Offer and act as a holding vehicle in respect of the Offer and the underlying TransAlta Power Units.

On 30 October 2007 CKI and the Company entered into the Agreement, pursuant to which CKI agreed to procure the sale of and the Company agreed to purchase or cause its subsidiary to purchase 50% of the entire issued share capital of Canco for a consideration equivalent to CAD$1,000,000 (approximately HK$8,120,000); plus 50% of the total costs to be incurred by Canco in effecting the Offer (excluding costs paid out of the initial capital of Canco); less

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement. The Company also agreed to assume on the completion date of the Agreement the guarantee in respect of the Bridge Facility to the extent of 50% of its outstanding amount on a several basis.

As at the Latest Practicable Date, CKI and its associates currently hold approximately 38.87% of the issued share capital of the Company. CKI is therefore a substantial shareholder of the Company and it and its associates are connected persons of the Company as defined in the Listing Rules. The Transaction constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is therefore subject to the approval of the Independent Shareholders at the EGM to be conducted by way of poll.

In formulating our opinion with regard to the Transaction, we have relied on the information, opinions and facts supplied, and representations made to us by the Directors and representatives of the Company (including those contained or referred to in the Circular). We have assumed that all such information, opinions, facts and representations, which have been provided to us by the Directors and representatives of the Company, and for which they are wholly responsible, are true and accurate in all material respects. We have also relied on certain information available to the public and we have assumed such information to be accurate and reliable, and we have not independently verified the accuracy of such information. Further, we have relied on the representations of the Directors that they have made all reasonable inquiries, and that, to the best of their knowledge and belief, there are no other facts, the omission of which would make any statement contained in the Circular untrue or misleading. We have also assumed that statements and representations made or referred to in the Circular were accurate at the time they were made and continue to be accurate at the date of dispatch of the Circular.

We consider that we have reviewed sufficient information to enable us to reach an informed view regarding the Transaction to justify our recommendation, relying on the accuracy of the information provided in the Circular as well as to provide a reasonable basis for our advice. It is not within our terms of reference to comment on the commercial feasibility of the Transaction, which remains the responsibility of the Directors. As the independent financial adviser to the Independent Board Committee and the Independent Shareholders, we have not been involved in the negotiations in respect of the terms and conditions of the Transaction. Our opinion with regard to the terms and conditions thereof has been formed on the assumption that all obligations to be performed by each of the parties to the Transaction will be fully performed in accordance with the terms and conditions thereof. Further, we have no reason to suspect that any material facts or information have been omitted or withheld from the information supplied or opinions expressed to us nor to doubt the truth, accuracy and completeness of the information, facts and representations provided, or the reasonableness of the opinions expressed, to us by the Company, its Directors and its representatives. We have not, however, made any independent verification of the information and facts provided, representations made or opinions expressed by the Company, its Directors and its representatives, nor have we conducted any form of independent investigation into the business affairs or assets and liabilities of the Company. Accordingly, we do not warrant the accuracy or completeness of any such information.

— 14 —

LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

Our opinion is necessarily based upon market, economic and other conditions as they existed and could be evaluated, and on the information publicly available to us, as of the date of this opinion. We have no obligation to update this opinion to take into account events occurring after the date that this opinion is delivered to the Independent Board Committee and the Independent Shareholders. As a result, circumstances could develop prior to completion of the Transaction that, if known to us at the time we rendered our opinion, would have altered our opinion.

In addition, our opinion is also subject to the following qualifications:

• (a) We are instructed to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Transaction. As such, the scope of our review, and consequently, our opinion does not include any statement or opinion as to the commercial merits or strategic rationale of the Transaction.

• (b) We do not express any opinion or statement as to whether any similar terms or transactions akin to the terms proposed for the Transaction are or might be available from any independent third parties, nor as to whether any independent third parties might offer to enter into similar transactions;

• (c) It is not possible to confirm whether or not the Transaction is in the interests of each individual Independent Shareholder and each Independent Shareholder should consider his/her/its vote on the merits or otherwise of the Transaction in light of his/her/its own circumstances and from his/her/its own point of view having regard to all the circumstances (and not only the financial perspectives offered in this letter) as well as his/her/its own investment objectives;

• (d) In preparing this letter and in giving any opinion or advice, we have only had regard to the Transaction and necessarily circumstances thereof in connection with the Transaction only, and not in connection with any other business plan, strategy or transaction, past or present, with regard to the Company or the Group as a whole, which falls beyond the scope of our opinion in connection with the Transaction;

• (e) We express no opinion as to whether the Transaction will be completed nor whether it will be successful;

• (f) Nothing contained in this letter should be construed as us expressing any view as to the trading price or market trends of any securities of the Company at any particular time;

• (g) Nothing contained in this letter should be construed as a recommendation to hold, sell or buy any securities of the Company; and

• (h) We were not requested to and did not provide advice concerning the structure, the specific amount of consideration, the timing, pricing, size, feasibility, or any other aspects of the Transaction.

— 15 —

LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

This letter is for the information of the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Transaction and, except for its inclusion in the Circular and for references thereto in the letter from the Independent Board Committee set out in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purpose, without our prior written consent.

CLSA is licensed by the Hong Kong Securities and Futures Commission to undertake Types 4 (advising on securities) and 6 (advising on corporate finance) regulated activities under the SFO and we, together with our affiliates, provide a full range of investment banking and brokerage services, which, in the course of normal trading activities, may from time to time effect transactions and hold securities, including derivative securities, of the Company, its subsidiaries or its substantial shareholder (as defined in the Listing Rules) for our own account and the accounts of customers. CLSA will receive a fee from the Company for rendering this opinion. The Company has also agreed to indemnify CLSA and certain related persons against liabilities and expenses in connection with this engagement.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion, we have taken into consideration, among others, each of the following principal factors and reasons set out below. Our conclusions are based on the results of all analyses taken as a whole.

1. Background of the Transaction

On 15 October 2007, CKI announced that on 14 October 2007 (Calgary time), it had entered into the Support Agreement with TransAlta Power whereby CKI agreed, either by itself or through one or more of its subsidiaries, or any combination thereof, to make an offer any time before 11:59 p.m. (Calgary time) on 29 October 2007 (01:59 p.m. (Hong Kong time) on 30 October 2007) to purchase all of the outstanding TransAlta Power Units from the TransAlta Power Unitholders, on the basis of CAD$8.38 (equivalent to approximately HK$68.05) in cash per TransAlta Power Unit.

We understand from the Directors that, subsequent to entering into the Support Agreement, Canco was incorporated by CKI as a wholly-owned subsidiary on 23 October 2007 for the purpose of making the Offer. Canco has not otherwise carried on any business activities other than in respect of the Offer.

On 30 October 2007, CKI and the Company entered into the Agreement, pursuant to which CKI agreed to procure the sale of and the Company agreed to purchase or cause its subsidiary to purchase 50% of the entire issued share capital of Canco. After completion of the Transaction pursuant to the Agreement, each of the Company and CKI will hold a 50% equity interest in Canco, which in turn will hold all TransAlta Power Units acquired pursuant to or following the Offer.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

As disclosed in the letter from the Board contained in the Circular, the CKI Group is engaged in the development, investment and operation of infrastructure businesses in Hong Kong, the Mainland, Australia and the United Kingdom. CKI and its associates together hold approximately 38.87% of the issued share capital of the Company.

The principal activity of the Group is the generation of electricity and its transmission and distribution to Hong Kong and Lamma Islands. The Company and CKI are partners in several power-related businesses in Australia and a gas distribution network business in the United Kingdom.

2. Principal terms of the Agreement

The consideration for the Transaction will be an amount equivalent to:

• (a) CAD$1,000,000 (approximately HK$8,120,000), being 50% of the initial capital in Canco prior to the completion of the Agreement;

Plus

• (b) 50% of the aggregate amount of (i) the amount paid by Canco for the purchase of the TransAlta Power Units deposited under the Offer and acquired by Canco under any Compulsory Acquisition, Subsequent Acquisition Transaction or other Second Step Transaction; (ii) the amount paid for the General Partner’s interest in TransAlta Power; and (iii) the costs of the Offer, Subsequent Acquisition Transaction or other Second Step Transaction and any related transactions; but excluding (iv) any amount or costs as may be satisfied or paid with the said initial capital in Canco;

Less

• (c) 50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement.

Upon completion of the Agreement, the Company will provide to the banks providing the Bridge Facility a several guarantee limited to 50% of the amount outstanding under the Bridge Facility.

As disclosed in the letter from the Board, completion of the Transaction is conditional upon (i) on or after 4 December 2007 (Calgary time), completion of the acquisition under the Offer of such number of the TransAlta Power Units by Canco representing 66[2] /3% or more of the issued and outstanding TransAlta Power Units; and (ii) the Shareholders who are qualified to vote at the EGM approving the Transaction and the

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

related transactions and matters contemplated under the Agreement as required under the Listing Rules. If the above conditions are not satisfied on or before 28 February 2008 (or such later date as is agreed by the parties to the Agreement), the Agreement shall lapse and the Transaction will not proceed.

Pursuant to the Agreement, CKI and the Company will nominate an equal number of representatives to be appointed as directors of Canco after completion of the Transaction.

The Directors confirm that the Agreement was negotiated and entered into on an arm’s length basis between the parties thereto. Also as stated in the letter from the Board, the Directors believe that the Transaction is in the interests of the Company and the Shareholders as a whole, and that the terms of the Agreement are fair and reasonable so far as the Shareholders as a whole are concerned.

In addition, we understand from the Directors that, given the Company’s power generation sector expertise, the Company has carried out due diligence of TransAlta Power, and was able to provide its views in relation to the Offer generally.

Based on our review of the terms of the Transaction, including terms as to payment of the consideration, bridge financing and conditionality of the Transaction, we are of the view that the terms of the Agreement are fair and reasonable so far as the Shareholders as a whole are concerned.

3. Underlying transactions relevant to the Transaction

The Transaction involves the acquisition of a 50% equity interest in a holding company, whose purpose is to make the Offer and whose principal business is to hold the TransAlta Power Units acquired pursuant to or subsequent to the Offer. As such, in order to formulate an opinion on the Transaction, we believe it is necessary to consider the following matters relating to the underlying Offer and TransAlta Power:

3.1. In relation to TransAlta Power:

TransAlta Power is a limited partnership established pursuant to the laws of the Province of Ontario, Canada and the TransAlta Power Units are listed for trading on the Toronto Stock Exchange under the symbol “TPW.UN”.

TransAlta Power holds investments which are directly or indirectly related to energy supply. TransAlta Power owns a 49.99% interest in TA Cogen as a limited partner. TA Cogen is a limited partnership established pursuant to the laws of the Province of Ontario, Canada. It owns interests in (i) five gas-fired cogeneration facilities located in Alberta, Ontario and Saskatchewan and (ii) a coal-fired, minemouth power generation facility located in Alberta. The total installed generating

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

capacity of such facilities amounts to 1,352 MW, with installed capacity attributable to TA Cogen’s ownership amounting to 810MW. As disclosed in the Circular, the remaining 50.01% partnership interest in TA Cogen is currently held by two wholly-owned subsidiaries of TransAlta Corporation, which is a party independent of CKI and its connected persons.

We are further advised by the Directors that, except for the 49.99% limited partnership interest in TA Cogen, TransAlta Power does not have any other significant businesses, investments or commercial operations. Please also refer to the Circular for further details relating to TransAlta Power.

Historical price and current trading information in relation to the TransAlta Power Units:

The following diagram sets forth the historical price and trading volume information in relation to the TransAlta Power Units for the period starting from 1 January 2006 until the Latest Practicable Date.

==> picture [368 x 178] intentionally omitted <==

Source: Bloomberg

We have further reviewed the historical multiples of the market price per unit to earnings per unit (“P/E”) of TransAlta Power Units. The review indicates that the market closing prices per TransAlta Power Unit as at 31 December 2004, 31 December 2005, and 31 December 2006, were CAD$10.24, CAD$9.80, and CAD$7.47 (or equivalent to approximately HK$83.15, HK$79.58 and HK$60.66) respectively. Based on the earnings per unit, as reported in TransAlta Power’s audited financial statements prepared in accordance with Canadian GAAP dated 31 December 2004, 31 December 2005, and 31 December 2006, of CAD$0.48, CAD$-0.04, and CAD$0.46, TransAlta Power’s current fiscal year (“CFY”) P/E ratios as of 31 December 2004, 31 December 2005 and 31 December 2006 were

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

21.33x, negative and 16.24x respectively. We further understand that the reason that TransAlta Power incurred a loss for the year ended 31 December 2005 was due to the company’s decision to take a one-time charge to reduce the carrying value of one of its gas fired power plants, considering the structural changes in the cost of fuel supplied to the referred power plant, which negatively affected TransAlta Power’s reported earnings in 2005.

Based on the average market closing price per TransAlta Power Unit of CAD$9.39 for the year ended 31 December 2004, CAD$9.70 for the year ended 31 December 2005, and CAD$8.43 for the year ended 31 December 2006 (or equivalent to approximately HK$76.25, HK$78.76 and HK$68.45 respectively), the average CFY P/E ratios for the same periods were 19.56x, negative and 18.33x, respectively.

As at the Latest Practicable Date, the market closing price per TransAlta Power Unit was CAD$8.34 (or equivalent to approximately HK$67.72), representing a P/E ratio of approximately 18.13x based on the earnings per TransAlta Power Unit of CAD$0.46 for the year ended 31 December 2006. The market capitalisation of TransAlta Power amounted to CAD$626.82 million (or equivalent to approximately HK$5,089.78 million) as at the Latest Practicable Date.

Future plans in relation to TransAlta Power:

As disclosed in other public documents in relation to the Offer, we note that TransAlta Power is a limited partnership whose business and affairs are currently managed by the General Partner pursuant to a limited partnership agreement. Certain management, administrative and other services of TransAlta Power are currently performed by TransAlta Energy Corporation (“TEC”, which is also one of the shareholders that holds the remaining 50.01% interest in TA Cogen) pursuant to a management agreement (the “Management Agreement”).

According to relevant disclosures made in the offer document despatched by TransAlta Power to its unitholders in relation to the Offer, pursuant to another agreement entered into between CKI, TEC and TransAlta Corporation on 14 October 2007:

• upon Canco acquiring 66[2] /3% or more of the issued and outstanding TransAlta Power Units, Canco (or its affiliate) will acquire the 0.01% interest of the General Partner in TransAlta Power for an amount proportionate to the Offer price to be paid for the outstanding TransAlta Power Units and the general partner of TransAlta Power will be changed to an affiliate of CKI; and

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

• upon Canco acquiring all the issued and outstanding TransAlta Power Units, the Management Agreement will be terminated and Canco will pay TEC an annual fee of CAD$2 million (equivalent to approximately HK$16.24 million) in consideration of TransAlta Corporation and TEC agreeing to certain revisions to the TA Cogen limited partnership agreement that would be effective from that time.

Upon Canco acquiring all of the TransAlta Power Units, TransAlta Power would make an application for the delisting of the TralsAlta Power Units from the Toronto Stock Exchange. We further understand from the Directors that, upon the acquisition of all of the TransAlta Power Units and the interest of the General Partner in TransAlta Power, it is intended that TransAlta Power will be dissolved and Canco will directly hold the assets formerly held by TransAlta Power.

3.2. In relation to the Offer:

The Offer made by Canco pursuant to the Support Agreement will expire on 4 December 2007 (the “Initial Expiry Time”), except that the Offer may be extended by Canco if the conditions of the Offer are not satisfied or waived by the date and time at which the Offer would otherwise expire in accordance with its terms.

The Offer relates to the purchase of all of the outstanding limited partnership units of TransAlta Power and is conditional on, among other things, the valid deposit under the Offer of at least 66[2] /3% of the outstanding TransAlta Power Units (the “Minimum Required Units”).

If Canco takes up and pays for at least the Minimum Required Units pursuant to the terms of the Offer, Canco will use all commercially reasonable efforts to acquire, and TransAlta Power has agreed to use all commercially reasonable efforts to assist Canco in acquiring, the balance of the TransAlta Power Units as soon as practicable and in any event within 6 months of the date on which Canco first takes up and acquires TransAlta Power Units pursuant to the Offer by way of compulsory acquisition or any other type of acquisition transaction so that TransAlta Power Units can be mandatorily transferred to Canco for a consideration equal to the consideration paid pursuant to the Offer for each TransAlta Power Unit.

Canco made the Offer on the basis of CAD$8.38 (equivalent to approximately HK$68.05) in cash for each TransAlta Power Unit, which represents a premium of (i) 15.75% of the closing price of the TransAlta Power Unit for the last trading day; (ii) 16.00% of the average closing prices for last five trading days; and (iii) 15.00% of the average closing prices for the last ten trading days, before signing of the Support Agreement.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

4. Reasons for and Benefits of entering into the Transaction

As disclosed in the letter from the Board contained in the Circular, the Transaction reflects the Company’s strategy of investing in infrastructure projects outside Hong Kong. The Directors believe the terms of the Transaction are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

We are advised by the Directors that they believe that the Company has benefited from its strategy of investing outside Hong Kong. The Directors confirm that the Company intends to continue this strategy so as to reduce its reliance on earnings from the electricity operations in Hong Kong.

In particular, based on their study of the Canadian energy market and their subsequent conclusion that the Canadian power generation businesses operate in a transparent and stable regulatory environment with predictable cash flows, the Directors view Canada as an important market offering attractive investment opportunities.

We further note that the Company has previously worked with CKI on several joint venture projects. The Directors believe that the success of their previous working relationship makes CKI a suitable partner for the investment in TransAlta Power. With the Group’s extensive experience in power generation and distribution and the CKI Group’s extensive experience in the development, investment and operation of infrastructure businesses, the Directors are of the view that both parties will leverage on each other’s strengths through their joint ownership and investment in TransAlta Power, and that this will be beneficial to both parties.

After taking into consideration the Company’s investment strategy, the nature of the Company’s business, the assets underlying TransAlta Power, and the Company’s previous experience of partnering with CKI, we are of the view that the Transaction is in the interests of the Company and the Shareholders as a whole.

5. Funding of the Transaction and Financial Impact of the Transaction:

As mentioned above, the consideration for the Transaction is equivalent to CAD$1,000,000 (approximately HK$8,120,000), being the initial capital contribution contributed by CKI to Canco; plus 50% of the total costs to be incurred by Canco in effecting the Offer (excluding costs paid out of the initial capital of Canco); less 50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement.

Considering:

— based on the approximate number of all the outstanding TransAlta Power Units to be acquired under the Offer, being 75,157,723 units, and assuming Canco acquires

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

all outstanding TransAlta Power Units at the offer price of CAD$8.38 per unit in cash, it is expected that the aggregate consideration of the Offer will amount to approximately CAD$629.82 million (equivalent to approximately HK$5,114.14 million);

— based on the General Partner’s 0.01% holding in TransAlta Power, and the agreement that the General Partner’s interest will be acquired at a price directly in proportion to the Offer price, the aggregate consideration payable for the General Partner’s interest will amount to approximately CAD$63,000 (equivalent to approximately HK$511,560); and

— the Bridge Facility in the maximum principal amount of CAD$700 million (equivalent to approximately HK$5,684 million) that is to be extended by commercial banks in relation to the Offer,

we understand that the total consideration payable by the Company under the Transaction is not expected to exceed CAD$1,500,000 (equivalent to approximately HK$12,180,000). As disclosed in its unaudited condensed consolidated interim financial statements of the Group for the six months ended 30 June 2007, the Company had total cash and cash equivalent resources of approximately HK$10,968 million as at 30 June 2007. As such, we concur with the Directors’ view that the Company has sufficient internal cash resources to fund the Transaction.

6. Financial Impact of the Transaction:

The Directors are of the view that the Transaction and the underlying Offer will have a positive impact on the future prospects of the Company.

We understand from the Directors that the Company currently intends to account for Canco as an “interest in an associate” immediately after the Transaction. As such, the operating results and assets of Canco will be accounted for in the Group’s financial statements using the equity method.

We further note that, on the completion of the Agreement, the Company will provide a guarantee with respect to 50% of the amount outstanding under the Bridge Facility, being an amount not exceeding CAD$350 million (or equivalent to approximately HK$2,842 million). We are of the view that such assumption of a pro rata portion of the total amount of the guarantees provided in relation to the Bridge Facility is consistent with the relevant Canco interest to be acquired by the Company under the Transaction. We further note from the Company’s unaudited interim report that, as at 30 June 2007, the Company has given guarantees and indemnities in respect of bank and other borrowing facilities made available to and financial commitments of subsidiaries totaling HK$5,856 million. As such, the Company’s provision of guarantees pursuant to the Transaction

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

will increase the total amount of its contingent liabilities in respect of financial commitments of subsidiaries and associate by approximately HK$2,842 million. We note that the Company’s net debt-to-equity ratio as at 30 June 2007 was 9% and that the Company has cash resources of approximately HK$10,968 million as at 30 June 2007. In the event that such contingent liabilities were to crystallize, we note that they could be met in full from the Company’s internal resources and would not have a material adverse impact on the Company’s financial position. The Directors confirm that such increase in the total amount of Company’s contingent liabilities will not contravene the relevant guidelines laid down in the Company’s treasury policy as approved by the Board.

After taking into consideration the above, we are of the view that the Transaction will not have a material adverse financial impact on the Company.

7. Consideration and Valuation

We are advised by the Directors that the consideration for the Transaction was determined after arm’s length negotiations between the parties on normal commercial terms.

(a) Basis of consideration

As mentioned in Section 2 of this letter, the total amount to be paid by Canco in acquiring the entire interest in TransAlta Power, includes:

• (a) CAD$1,000,000 (approximately HK$8,120,000), which represents 50% of the initial capital of Canco prior to the completion of the Agreement; and

• (b) the difference between (i) 50% of the total costs to be incurred by Canco in effecting the Offer (excluding costs paid out of the initial capital of Canco) and (ii) 50% of the amount outstanding under the Bridge Facility on the completion date of the Agreement.

In addition, on the completion date of the Agreement, the Company will also provide a several guarantee in respect of 50% of the amount outstanding under the Bridge Facility.

We note that the consideration for the Transaction represents a pro rata portion of (i) the initial capital contribution made by CKI to Canco; (ii) the Offer price proposed by CKI under the Offer on an arm’s length basis; and (iii) total guarantees provided in relation to the Bridge Facility, which was negotiated on an arm’s length basis by CKI with commercial banks that are independent from CKI.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

As the consideration for the Transaction is based on the consideration payable by Canco under, and costs directly associated with, the Offer, in order to analyze whether the consideration is fair and reasonable to the Company and the Shareholders, we have analyzed the Offer price of CAD$8.38 per TransAlta Power Unit agreed to be paid by Canco to purchase all outstanding TransAlta Power Units from the TransAlta Power Unitholders pursuant to the Offer.

As disclosed in the Circular, the consideration of CAD$8.38 per TransAlta Power Unit represents a premium of (i) 15.75% over the closing price of the TransAlta Power Unit for the last trading day; (ii) 16.00% over the average closing prices for the last five trading days; and (iii) 15.00% over the average closing prices for the last ten trading days prior to entry into the Support Agreement.

(b) Valuation of the Offer

We list below the valuation multiples for the Offer to acquire all the outstanding TransAlta Power Units based on the offer price of CAD$8.38 per TransAlta Power Unit:

	Based on the financial
	information of
	TransAlta Power
Valuation multiples of the	for the year ended
TransAlta Power Acquisition	31 December 2006
Price(i)/earnings	18.41x
Price/net asset value	1.25x

• (i) Price refers to the equity value of TransAlta Power as implied by the consideration of CAD$8.38 per TransAlta Power Unit pursuant to the Support Agreement

(c) Comparable companies analysis

In formulating our opinion, we have considered the current market multiples of various comparable and listed companies in North America based on their respective market prices as at the Latest Practicable Date and their latest annual report. In selecting the comparable listed companies, we have identified and chosen the major electricity generation companies that (i) are listed on stock exchanges in North America (as set out in the table below); (ii) are mainly focused on coal-fired and gas-fired electricity generation; (iii) have their principal business and operations (i.e. power generating) based in the North America and derive substantially all of their revenue from North America;

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

The following table sets out our findings:

	Mkt Cap	P/E	P/NAV
	(US$ million)	(x)	(x)
Mirant Corp	9,536.17	17.16	2.15
NRG Energy	9,772.86	19.50	1.73
TransAlta Corp	7,130.82	29.02	2.80
EPCOR Power LP	1,257.14	14.74	1.49
Macquarie Power &
Infrastructure Income Fund	467.20	31.86	1.81
Average for Power Companies
listed on stock exchanges
in North America	5,632.84	22.46	1.99
The Transaction	629.82	18.41	1.25

Source: Bloomberg, the latest available annual report of the relevant companies as at the Latest Practicable Date

For the purpose of comparison only:

• (i) The multiples were calculated on the basis of the companies’ respective market capitalisation determined as according to Bloomberg as at the Latest Practicable Date and the companies’ financial data according to Bloomberg and the companies’ respective annual report.

• (ii) P or Price refers to market capitalisation as at the Latest Practicable Date.

• (iii) E or Earnings refer to net profit excluding extraordinary items according to the latest available annual report.

• (iv) NAV refers to the net asset value according to the latest available audited accounts.

• (v) In calculating any valuation multiples relating to the Transaction, we have derived the relevant multiples on the basis of the consideration of CAD$8.38 per TransAlta Power Unit.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

• (vi) The average information is included for the convenience of the readers only and does not necessarily represent the actual country or regional averages if other power generation companies are included.

Based on the multiples shown in the table above, we note the multiples of the TransAlta Power Transaction are lower than, and thus compare favorably to, the average multiples for comparable power companies listed on stock exchanges in North America. We also note that the TransAlta Power Units have been trading at P/E multiples of between 16 times and 22 times since 2004, hence the Transaction’s P/E multiple of 18.41 times is within the historical trading range of the TransAlta Power Units.

(d) Comparable transactions analysis

• (i) Transaction premium analysis

We have examined a number of acquisition transactions announced and completed in the past 36 months in the North American electric power generation sector involving target companies listed on stock exchanges in North America and where information is publicly available. The comparable companies selected are mainly focused on coal-fired and gas-fired electricity generation and have their principal business and operations (i.e. power generating) based in North America and derive substantially all of their revenue from North America.

We have analyzed the acquisition premium (represented as a percentage over the stock price) calculated based on the per share offer price to the stock price of the relevant target companies at 1-day, 1-week and 4-weeks prior to the announcement dates of the respective acquisition transaction.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

The following table sets out our findings:

% of Date Acquiror shares Announced Name Target Name acquired 20-Jun-07 Fort Chicago Countryside Power 86.8 Energy Partners Income Fund 25-Feb-07 Various financial TXU Corp 100.0 investors 20-Dec-06 Harbinger Capital Calpine Power 94.6 Partners Income Fund 5-Jul-06 Castor Holdings Duquesne 100.0 LLC Light Holdings 17-May-05 EPCOR Utilities TransCanada Power 30.6 Inc. Services Limited Average The Transaction 100.0	Premium — 1 day prior to announcement date (%) 6.08 20.14 17.22 21.65 6.93 14.40 15.75	Premium — Premium — 1 week prior to 4-weeks prior to announcement announcement date date (%) (%) 8.47 0.95 22.17 28.47 11.36 20.45 23.92 25.71 6.16 6.33 14.42 16.38 14.95 13.24	Premium — Premium — 1 week prior to 4-weeks prior to announcement announcement date date (%) (%) 8.47 0.95 22.17 28.47 11.36 20.45 23.92 25.71 6.16 6.33 14.42 16.38 14.95 13.24
			13.24

Source: Thomson Financial, Bloomberg, respective company’s public filings in relation to its respective acquisition

We note from the table above that the premia over the market closing prices of TransAlta Power prior to the announcement date as represented by the consideration of CAD$8.38 per TransAlta Power Unit are slightly higher than the average premia involved in other comparable transactions as at one day prior to, and for the week prior to, the respective announcement dates of those transactions, yet is less than, and therefore compares favorably to, the average premia for the comparable transactions in respect of the four week period prior the respective announcement dates of such transactions. In addition, given the average market closing price per TransAlta Power Unit of CAD$9.39, CAD$9.70, and CAD$8.43 for the year ended 31 December, 2004, 31 December 2005, and 31 December 2006, respectively, the Offer price of CAD$8.38 per TransAlta Power Unit represents a discount to the historical trading range.

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

• (ii) Transaction multiples analysis

We have examined a number of acquisition transactions announced and completed in the past 36 months in the North American electric power generation sector involving target companies listed on stock exchanges in North America and where information is publicly available. The comparable companies selected are mainly focus on coal-fired and gas-fired electricity generation; and have their principal business and operations (i.e. power generating) based in North America and derive substantially all of their revenue from North America.

The following table sets out our findings:

Total installed % of capacity Date Acquiror Target shares attributable Announced Name Name acquired to the target (MW) 20-Jun-07 Fort Chicago Countryside 86.8 267 Energy Power Partners Income Fund 25-Feb-07 Various TXU Corp 100.0 17,605 financial investors 20-Dec-06 Harbinger Calpine 94.6 734 Capital Power Partners Income Fund 31-May-06 Castor Duquesne 100.0 N/A Holdings Light LLC Holdings 17-May-05 EPCOR TransCanada 30.6 744 Utilities Power Inc. Services Limited Average Average (excluding TXU Corp) The Transaction 407	Total installed capacity attributable to the acquisition (MW) 232 17,605 694 N/A 227 4,690 384 404	EV/ EBITDA (x) 8.67 8.12 12.78 8.87 12.41 10.17 10.68 18.33	P/E (x) 16.92 12.46 16.00 27.42 17.18 18.00 19.38 18.41	P/NAV (x) 1.27 14.86 1.34 1.61 2.11 4.24 1.58 1.26	EV/MW (US$ million) 1.15 2.52 1.13 N/A 2.90
					1.93 1.73 1.56

Source: Thomson Financial, Bloomberg, respective company’s public filings in relation to its respective acquisition and latest available annual report prior to the respective acquisition

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Notes:

• (i) P or Price refers to the consideration paid to acquire the relevant equity interests in the respective acquisition target.

• (i) EV or Enterprise Value refers to the sum of the consideration paid to acquire the relevant equity interests in the respective acquisition target and the proportional net indebtedness of the acquisition target in accordance with latest audited financial information that is available prior to the respective acquisition.

• (iii) EBITDA refers to earnings before interest, tax, depreciation and amortisation expenses as according to the latest annual reports.

• (iv) MW refers to the installed generation capacity in megawatt attributable to the respective companies.

• (v) N/A means not available.

Based on the multiples shown in the table above, and by excluding TXU on the basis that it represents outlier valuations, we note that the Transaction’s EV/EBITDA multiple of 18.33 times is higher than, and thus compares less favorably to, the average EV/EBITDA multiple of 10.68 times, respectively, for those comparable transactions. Save for the EV/EBITDA multiple in the above analysis, the valuation multiples for the TransAlta Power Acquisition compare favorably to the other 3 valuation multiples (i.e. the P/E multiple, P/NAV multiple and the EV/MW multiple) of the comparable transactions.

Based on the above valuation analysis which shows the value of the Transaction falls within (i) the current market valuation multiples of comparable companies listed on stock exchanges in North America, (ii) the transaction premia of comparable transactions involving acquisitions of controlling interests in listed power companies, and (iii) the transaction valuation multiples of comparable transactions involving acquisitions of North American power companies, as set out in this section, we consider that the consideration of the Transaction is fair and reasonable.

SUMMARY:

Having considered the above principal factors and reasons, we draw your attention to the following in arriving at our conclusion:

• (i) the Directors’ belief that the Transaction is in the interests of the Company and the Shareholders as a whole, and that the terms of the Agreement are fair and reasonable so far as the Shareholders as a whole are concerned;

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LETTER FROM CLSA EQUITY CAPITAL MARKETS LIMITED

• (ii) the Directors’ view that the Transaction is consistent with the Company’s strategy to seek investment opportunities outside Hong Kong;

• (iii) the Directors’ view that the Transaction and the underlying Offer will have a positive impact on the future prospects of the Company;

• (iv) the Company’s previous experience in working with CKI and the Directors’ belief that the Company and CKI will leverage on each other’s strengths through their joint ownership and investment in TransAlta Power, which will be beneficial to both parties;

• (v) the fact that, given the Company’s power generation sector expertise, the Company has carried out due diligence of TransAlta Power, and was able to provide its views in relation to the Offer generally;

• (vi) the consideration for the Transaction represents a pro rata portion of (i) the initial capital contribution injected into Canco by CKI; (ii) the Offer price proposed by CKI under the Offer on an arm’s length basis; and (iii) the total guarantees provided in relation to the Bridge Facility, which was negotiated on an arm’s length basis by CKI with commercial banks that are independent from CKI; and

• (vii) the analysis of (i) the current market valuation multiples of comparable companies listed on stock exchanges in North America, (ii) the transaction premia of comparable transactions involving acquisitions of controlling interests in listed power companies, and (iii) the transaction valuation multiples of comparable transactions involving acquisitions of North American power companies as set out in section 7 entitled “Consideration and valuation” in this letter.

RECOMMENDATION

Having considered all the above principal factors and reasons, we consider as at the date hereof that:

• (a) the terms of the Transaction are on normal commercial terms;

• (b) the Transaction is entered into in the ordinary and usual course of business of the Company; and

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• (c) the terms of the Transaction are fair and reasonable and in the interests of the Company and its Shareholders (including the Independent Shareholders) as a whole.

Accordingly, we would advise the Independent Board Committee to recommend to the Independent Shareholders to vote in favour of the Transaction at the EGM.

This letter is provided to the Independent Board Committee and the Independent Shareholders of the Company in connection with and for the purposes of their evaluation of the Transaction. In the event of inconsistency, the English text of this letter shall prevail over the Chinese text. This letter may not be disclosed, referred to, or communicated (in whole or part) to any third party for any purpose whatsoever except with our prior written approval. This letter may be reproduced in full in the Circular but may not otherwise be disclosed publicly in any manner without our prior written approval.

Yours faithfully, For and on behalf of CLSA Equity Capital Markets Limited

Philip Gregory Director of Investment Banking

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

The issue of this circular has been approved by the Directors.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests of the Directors in the issued share capital of the Company and its Associated Corporations as recorded in the register required to be kept under Section 352 of the SFO were as follows:

Long Positions in Shares of the Company

					Approximate
		Nature of	Number of		% of
Name of Director	Capacity	Interests	Shares Held	Total	Shareholding
Lee Lan Yee, Francis	Beneficial owner	Personal	739	739	�0%
Ronald Joseph Arculli	Interest of controlled	Corporate	2,011	2,011	�0%
	corporation
Li Tzar Kuoi, Victor	Interest of child or	Family	151,000	829,750,612	�38.87%
	spouse
	Beneficiary of trusts	Other	829,599,612
			(Note 1 and 2)

Notes:

• (1) These shares are held by subsidiaries of CKI.

The discretionary beneficiaries of each of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and another discretionary trust (“DT2”) are, inter alia, Mr. Victor Li Tzar-kuoi, his wife and children, and Mr. Richard Li Tzar-kai. Each of Li Ka-Shing Unity Trustee Corporation Limited (“TDT1”, which is the trustee of DT1) and Li Ka-Shing Unity Trustcorp Limited (“TDT2”, which is the trustee of DT2) holds units in The Li Ka-Shing Unity Trust (“UT1”) but is not entitled to any interest or share in any particular property comprising the trust assets of the said unit trust. Li KaShing Unity Trustee Company Limited (“TUT1”) as trustee of UT1 and its related companies in which TUT1 as trustee of UT1 is entitled to exercise or control the exercise of one-third or more of the voting power at their general meetings (“TUT1 related companies”) hold more than one-third of the issued share capital of Cheung Kong (Holdings) Limited (“CKH”). Certain subsidiaries of CKH in turn together hold more than one-third of the issued share capital of Hutchison Whampoa Limited (“HWL”). A subsidiary of HWL in turn holds more than one-third of the issued share capital of CKI.

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GENERAL INFORMATION

APPENDIX

The entire issued share capital of TUT1 and of the trustees of DT1 and DT2 are owned by Li KaShing Unity Holdings Limited (“Unity Holdco”). Each of Mr. Li Ka-shing, Mr. Victor Li Tzar-kuoi and Mr. Richard Li Tzar-kai is interested in one-third of the entire issued share capital of Unity Holdco. TUT1 is only interested in the shares of CKH by reason only of its obligation and power to hold interests in those shares in its ordinary course of business as trustee and, when performing its functions as trustee, exercises its power to hold interests in the shares of CKH independently without any reference to Unity Holdco or any of Mr. Li Ka-shing, Mr. Victor Li Tzar-kuoi and Mr. Richard Li Tzar-kai as a holder of the shares of Unity Holdco as aforesaid.

By virtue of the above and as a discretionary beneficiary of each of DT1 and DT2 and as a Director of CKH, Mr. Victor Li Tzar-kuoi is taken to have a duty of disclosure in relation to the shares of CKH held by TUT1 as trustee of UT1 and TUT1 related companies, the shares of HWL held by the subsidiaries of CKH, the shares of CKI held by the subsidiary of HWL and the shares of the Company held by the subsidiaries of CKI under the SFO as a Director. Although Mr. Richard Li Tzar-kai is interested in one-third of the entire issued share capital of Unity Holdco and is a discretionary beneficiary of each of DT1 and DT2, he is not a director of CKH and has no duty of disclosure in relation to the shares of CKH held by TUT1 as trustee of UT1 and TUT1 related companies under the SFO.

• (2) Mr. Victor Li Tzar-kuoi, by virtue of his interests as described in Note (1) above and as a Director, is also deemed to be interested in the shares of Associated Corporations of the Company held through the Company under the SFO.

The following are the Company’s Associated Corporations:

	Percentage of
	equity held
Name	by the Company
Alpha Central Profits Limited	100
Associated Technical Services Limited	100
Beta Central Profits Limited	100
Bonlink Investment Limited	100
Cavendish Construction Limited	100
CHEDHA Holdings Pty Limited	27.93
CHES Networks Pty Limited	33.33
CitiPower I Pty Limited	27.93
CitiPower II Pty Limited	27.93
CKI Power Development Pty Limited	27.93
CKI Power Distribution Pty Limited	27.93
CKI Spark Holdings No. One Limited	54.76
CKI Spark Holdings No. Two Limited	54.76
CKI Utilities Development Limited	54.76
CKI/HEI Electricity Assignment Pty Limited	27.93
CKI/HEI Electricity Distribution Holdings (Australia) Pty Limited	27.93
CKI/HEI Electricity Distribution (Services) Pty Limited	27.93
CKI/HEI Electricity Distribution Pty Limited	27.93
CKI/HEI Electricity Distribution Two Pty Limited	27.93
CKI/HEI Energy Holdings Pty Limited	50
CKI/HEI Power Holdings Pty Limited	27.93
Coty Limited	100

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GENERAL INFORMATION

APPENDIX

	Percentage of
	equity held
Name	by the Company
Dunway Investment Limited	100
ETSA Ancillary Pty Limited	27.93
ETSA FRC Pty Limited	27.93
ETSA Utilities Finance Pty Limited	27.93
Fenning Limited	100
Fortress Advertising Company Limited	100
Gusbury Enterprises Inc.	100
HEI China Limited	100
HEI Distribution Finance (Australia) Pty Ltd.	100
HEI Electricity Distribution (Malaysian) Limited	100
HEI Investment Holdings Limited	100
HEI Power (Malaysian) Limited	100
HEI Power Development Pty Limited	27.93
HEI Power Distribution Pty Limited	27.93
HEI Spark Holdings No. One Limited	54.76
HEI Transmission Finance (Australia) Pty Limited	100
HEI Utilities (Malaysian) Limited	100
HEI Utilities Development Limited	54.76
HKE Fund Management Limited S.à r.l.	100
Hong Kong Electric International Finance (Australia) Pty Limited	100
Hong Kong Telecommunications Holdings (Australia) Pty Limited	33.33
Hong Kong Telecommunications Holdings (Malaysian) Limited	33.33
Hongkong Electric (BVI) Limited	100
Hongkong Electric (Cayman) Limited	100
Hongkong Electric (Natural Gas) Limited	100
Hongkong Electric Finance (Cayman) Limited	100
Hongkong Electric Finance Limited	100
Hongkong Electric Fund Management Limited	100
Hongkong Electric International Limited	100
Hongkong Electric International Power (Mauritius) Limited	100
Hongkong Electric Yunnan Dali Wind Power Company Limited	100
Kentson Limited	100
Marregon (No.2) Pty Limited	27.93
Marregon Pty Limited	27.93
Powercor Australia Limited	27.93
Powercor Pty Limited	27.93
Powercor Australia LLC	27.93
Powercor Australia Holdings Pty Limited	27.93
Ratchaburi Power Company Limited	25
Riverland Investment Limited	100
Secan Limited	20
Sigerson Business Corp.	100
Silk Telecom Pty Limited	33.33
Silk Telecom (WA) Pty Limited	33.33
The Hongkong Electric Company, Limited	100
Utilities Management Pty Limited	27.93

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its Associated Corporation which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short positions which they were taken or deemed to have under such provisions of the SFO) or which were recorded in the register required to be kept by the Company under Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers.

There is no contract or arrangement subsisting at the Latest Practicable Date in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

None of the Directors has had any direct or indirect interest in any assets which have since 31 December 2006 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE SHARE CAPITAL OF THE COMPANY

According to the register kept under Section 336 of the SFO and information received by the Company, as at the Latest Practicable Date, Shareholders (other than Directors or chief executives of the Company) who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Part XV of the SFO were as follows:

Long Positions in Shares of the Company

			Approximate
		Number of	% of
Name	Capacity	Shares Held	Shareholding
Silchester International	Investment Manager	128,423,957	6.02%
Investors Limited
Interman Development Inc.	Beneficial owner	186,736,842	8.75%
		(Note 1)
Venniton Development Inc.	Beneficial owner	197,597,511	9.26%
		(Note 1)
Univest Equity S.A.	Beneficial owner	279,011,102	13.07%
		(Note 1)

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GENERAL INFORMATION

APPENDIX

			Approximate
		Number of	% of
Name	Capacity	Shares Held	Shareholding
Monitor Equities S.A.	Beneficial owner & Interest of	287,211,674	13.46%
	controlled corporation	(Note 1)
Hyford Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 2)
Cheung Kong Infrastructure	Interest of controlled corporations	829,599,612	38.87%
Holdings Limited		(Note 2)
Hutchison Infrastructure	Interest of controlled corporations	829,599,612	38.87%
Holdings Limited		(Note 3)
Hutchison International Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 3)
Hutchison Whampoa Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 3)
Cheung Kong (Holdings) Limited	Interest of controlled corporations	829,599,612	38.87%
		(Note 4)
Li Ka-Shing Unity Trustee	Trustee	829,599,612	38.87%
Company Limited as trustee		(Note 5)
of The Li Ka-Shing Unity Trust
Li Ka-Shing Unity Trustee	Trustee & beneficiary of a trust	829,599,612	38.87%
Corporation Limited as trustee		(Note 6)
of The Li Ka-Shing Unity
Discretionary Trust
Li Ka-Shing Unity Trustcorp	Trustee & beneficiary of a trust	829,599,612	38.87%
Limited as trustee of another		(Note 6)
discretionary trust
Li Ka-shing	Founder of discretionary trusts &	829,599,612	38.87%
	interest of controlled corporations	(Note 6)

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GENERAL INFORMATION

APPENDIX

Notes:

• (1) These are direct or indirect wholly-owned subsidiaries of Hyford Limited (“Hyford”) and their interests are duplicated in the same 829,599,612 shares of the Company held by Hyford described in Note (2) below.

• (2) CKI is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (1) above as it holds more than one-third of the issued share capital of Hyford indirectly. Its interests are duplicated in the interest of Hutchison Whampoa Limited (“HWL”) in the Company described in Note (3) below.

• (3) HWL is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (2) above as it holds more than one-third of the issued share capital of Hutchison International Limited, which holds more than one-third of the issued share capital of Hutchison Infrastructure Holdings Limited (“HIH”). HIH holds more than one-third of the issued share capital of CKI.

• (4) Cheung Kong (Holdings) Limited (“CKH”) is deemed to be interested in the 829,599,612 shares of the Company as referred to in Note (3) above as certain subsidiaries of CKH hold more than onethird of the issued share capital of HWL.

• (5) Li Ka-Shing Unity Trustee Company Limited (“TUT1”) as trustee of The Li Ka-Shing Unity Trust (“UT1”) is deemed to be interested in those shares of the Company described in Note (4) above as TUT1 as trustee of UT1 and its related companies in which TUT1 as trustee of UT1 is entitled to exercise or control the exercise of one-third or more of the voting power at their general meetings hold more than one-third of the issued share capital of CKH.

• (6) By virtue of the SFO, each of Mr. Li Ka-shing, being the settlor and may being regarded as a founder of each of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and another discretionary trust (“DT2”) for the purpose of the SFO, Li Ka-Shing Unity Trustee Corporation Limited (“TDT1”) as trustee of DT1 and Li Ka-Shing Unity Trustcorp Limited (“TDT2”) as trustee of DT2 is deemed to be interested in the same block of shares TUT1 as trustee of UT1 is deemed to be interested in as referred to in Note (5) above as all issued and outstanding units in UT1 are held by TDT1 as trustee of DT1 and by TDT2 as trustee of DT2. More than one-third of the issued share capital of TUT1 and of the trustees of the said discretionary trusts is owned by Li Ka-Shing Unity Holdings Limited (“Unity Holdco”). Mr. Li Ka-shing owns one-third of the issued share capital of Unity Holdco.

Save as disclosed above, as at the Latest Practicable Date, the Company had not been notified by any persons (other than Directors or chief executives of the Company) who had interests or short positions in the shares and underlying shares of the Company, which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group, or any options in respect of such capital.

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GENERAL INFORMATION

APPENDIX

The following is a list of directors of the Company who, as at the Latest Practicable Date, are also directors of the companies which have interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of Common Director

Name of Company

Fok Kin Ning, Canning Kam Hing Lam Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt

Cheung Kong (Holdings) Limited

Chow Woo Mo Fong, Susan Cheung Kong Infrastructure Holdings Limited Fok Kin Ning, Canning Andrew John Hunter Kam Hing Lam Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt Tso Kai Sum Kam Hing Lam Hyford Limited Li Tzar Kuoi, Victor Chow Woo Mo Fong, Susan Interman Development Inc. Kam Hing Lam Frank John Sixt Li Ka-Shing Unity Trustcorp Limited Frank John Sixt Li Ka-Shing Unity Trustee Company Limited Frank John Sixt Li Ka-Shing Unity Trustee Corporation Limited Chow Woo Mo Fong, Susan Monitor Equities S.A. Kam Hing Lam Chow Woo Mo Fong, Susan Univest Equity S.A. Kam Hing Lam Chow Woo Mo Fong, Susan Venniton Development Inc. Kam Hing Lam

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GENERAL INFORMATION

APPENDIX

Name of Common Director

Name of Company

Chow Woo Mo Fong, Susan Fok Kin Ning, Canning Kam Hing Lam Holger Kluge Li Tzar Kuoi, Victor George Colin Magnus Frank John Sixt Wong Chung Hin

Hutchison Whampoa Limited

Chow Woo Mo Fong, Susan Fok Kin Ning, Canning Kam Hing Lam Li Tzar Kuoi, Victor Frank John Sixt Chow Woo Mo Fong, Susan Frank John Sixt

Hutchison International Limited

Hutchison Infrastructure Holdings Limited

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into, or proposed to enter into, a service contract with any member of the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation, other than statutory compensation.

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GENERAL INFORMATION

APPENDIX

5. COMPETING BUSINESS INTERESTS OF DIRECTORS

The interests of Directors in businesses which may compete with the Group’s business of investing overseas in power generation, transmission and distribution facilities (“Overseas Business”) are as follows:

Name of Director	Name of Company	Nature of Interests
Fok Kin Ning, Canning	Cheung Kong Infrastructure Holdings Limited	Executive Director
Tso Kai Sum	Cheung Kong Infrastructure Holdings Limited	Executive Director
Chow Woo Mo Fong, Susan	Cheung Kong Infrastructure Holdings Limited	Executive Director
Andrew John Hunter	Cheung Kong Infrastructure Holdings Limited	Executive Director
	Spark Infrastructure Group	Non-executive Director
Kam Hing Lam	Cheung Kong Infrastructure Holdings Limited	Executive Director
	Spark Infrastructure Group	Non-executive Director
Li Tzar Kuoi, Victor	Cheung Kong Infrastructure Holdings Limited	Executive Director
George Colin Magnus	Cheung Kong Infrastructure Holdings Limited	Non-executive Director
Frank John Sixt	Cheung Kong Infrastructure Holdings Limited	Executive Director

The Board is of the view that the Group is capable of carrying on its Overseas Business independent of, and at arms length from the businesses of the above companies. When making decisions on the Overseas Business, the above Directors, in the performance of their duties as Directors of the Company, have acted and will continue to act in the commercial best interest of the Group and all its Shareholders.

6. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to Article 80 of the Articles of Association of the Company, subject to the Listing Rules, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands) demanded:

• (i) by the chairman;

• (ii) by at least five members present in person or by proxy;

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GENERAL INFORMATION

APPENDIX

• (iii) by any member or members present in person or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; and

• (iv) by a member or members holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Unless a poll be so demanded, a declaration by the chairman that a resolution has on a show of hands been carried or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.

The vote on the Resolution at the EGM shall be taken by poll.

7. INDEPENDENT FINANCIAL ADVISER

The following is the qualification of the Independent Financial Adviser which has given advice contained in this circular:

Name

Qualification

CLSA Equity Capital Markets Limited A licensed corporation under the SFO, licensed to conduct Types 4 (advising on securities) and 6 (advising on corporate finance) regulated activities

CLSA has confirmed that it has no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

CLSA does not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of Group since 31 December 2006, being the date to which the latest published audited consolidated financial statements of the Company were made up.

The letter given by CLSA is given as of the date of this circular for incorporation herein.

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GENERAL INFORMATION

APPENDIX

8. CONSENT

CLSA has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name and letter in the form and context in which it appears.

9. NO MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, they are not aware of any material adverse changes in the financial or trading position or prospects of the Group since 31 December 2006, being the date of the latest audited consolidated financial statements of the Group were made up.

10. MISCELLANEOUS

• (a) The company secretary of the Company is Ms. Lillian Wong, a fellow member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries.

• (b) The Company’s share registrar is Computershare Hong Kong Investor Services Limited at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (c) This circular has been prepared in both English and Chinese. In the case of any discrepancy, the English text shall prevail.

11. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the Agreement is available for inspection during normal business hours at the registered office of the Company at 44 Kennedy Road, Hong Kong from the date of this circular up to and including 15 January 2008 or the date of the EGM, whichever is earlier.

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