Huadian Power International Corporation Limited (Huadian Power; 01071 HK) will renew two core connected-party frameworks with controlling shareholder China Huadian and affiliate Huadian Financial Leasing, covering (i) mutual purchase and supply of fuel, equipment and services and (ii) finance-lease services, for the three years from 1 January 2027 to 31 December 2029.
Key features of the Proposed Purchase (Supply) of Fuel, Equipment and Services Framework Agreement • Counterparty: China Huadian, which holds c.45.63% of Huadian Power. • Scope: – China Huadian to supply coal, natural gas, engineering equipment, environmental projects and miscellaneous services (overhauls, testing, carbon-quota management, property management, etc.) to the Group. – Huadian Power to sell coal and provide plant overhauls, maintenance and substitute generation services to China Huadian. • Annual caps (RMB): – Fuel purchases from China Huadian: 18.00 billion per year (2027-2029). – Equipment & miscellaneous services purchases: 8.00 billion per year. – Sales of fuel & related services to China Huadian: 13.00 billion per year. • Pricing: benchmarked to prevailing market/spot prices, industry indices (NCEI, BSPI, CCTD, CECI) and competitive bidding; internal controls include multi-party quotes and audits. • HKEX implications: applicable percentage ratios exceed 5%; subject to reporting, announcement and independent shareholders’ approval under Chapter 14A.
Historical utilisation (RMB): • 2024 fuel purchased: 15.72 billion vs 18.00 billion cap. • 2025 fuel purchased: 10.96 billion vs 18.00 billion cap. • 1H 2026 fuel purchased: 4.83 billion. • 2024–1H 2026 purchases of equipment & services remain well below the 8.00 billion cap owing to extended construction cycles. • 2024 fuel sales to China Huadian: 8.47 billion vs 13.00 billion cap; 2025 sales: 6.83 billion.
Key features of the Proposed Finance Lease Service Framework Agreement • Counterparty: Huadian Financial Leasing (84.685% owned by China Huadian). • Term: 1 January 2027 – 31 December 2029. • Transactions: (a) Direct Lease—leasing of new equipment procured by the lessor; (b) Sale-and-Leaseback of existing assets. • Annual caps (RMB): up to 2.00 billion per year each for Direct Lease and Sale-and-Leaseback. • Aggregate maximum daily financing balance: 6.00 billion. • Pricing: interest and fees no higher than comparable market rates or those offered to other China Huadian group entities; at least two third-party quotes required for benchmarking. • HKEX implications: percentage ratios between 0.1% and 5%; subject to reporting and announcement, exempt from HKEX shareholder vote, but Shanghai Stock Exchange rules still require independent shareholder approval.
Rationale Management cites cost control, supply-chain security and financing flexibility. Mutual coal supply is expected to optimise fuel sourcing and leverage bulk-purchasing via the Group’s 91%-owned Beijing Fuel Logistics. The leasing arrangement aims to support capital needs for pumped-storage, gas-fired and coal-fired projects while lowering financing costs.
Governance & Timetable The board approved the renewals on 29 October 2026. Directors affiliated with China Huadian abstained from voting. An independent board committee and TC Capital International have been appointed to advise minority shareholders. A general meeting will be convened; China Huadian and its subsidiary (collective 45.63% stake) will abstain from voting.
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