China Water Affairs : ISSUANCE OF USD200 MILLION 4.85% SENIOR NOTES DUE 2026

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

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities referred to herein will not be registered under the U.S. Securities Act, and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the U.S. Securities Act. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. The Company does not intend to make any public offering of securities in the United States.

The communication of this announcement and any other document or materials relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order")), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, the Notes offered hereby are only available to, and any investment or investment activity to which this announcement relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this announcement or any of its contents.

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(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 855)

ISSUANCE OF USD200 MILLION 4.85% SENIOR NOTES DUE 2026

Reference is made to the announcement of the Company dated 12 April 2021 in respect of the Notes Issue.

The Board is pleased to announce that on 11 May 2021, the Company and the Subsidiary Guarantors entered into the Purchase Agreement with Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited, China CITIC Bank International, DBS Bank Ltd. and BOCOM International in connection with the issue of USD200 million 4.85% senior notes due 2026.

The Company intends to use the net proceeds from the Notes Issue in the Company's repayment of the 2017 Notes and certain other indebtedness and for financing working capital and in accordance with the Company's green finance framework.

Approval in-principle has been received for the listing and quotation of the Notes on the SGX-ST. Approval in-principle for the listing and quotation of the Notes on the SGX-ST is not to be taken as an indication of the merits of the Company, the Notes, the Subsidiary Guarantees, the Subsidiary Guarantors or their respective subsidiaries or associated companies (if any). No listing of the Notes will be sought in Hong Kong.

• For identification purposes only

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THE PURCHASE AGREEMENT

Date: 11 May 2021

Parties to the Purchase Agreement

1. the Company as the issuer;
2. the Subsidiary Guarantors;
3. Morgan Stanley;
4. BNP PARIBAS;
5. ANZ;
6. The Bank of East Asia, Limited;
7. China CITIC Bank International;
8. DBS Bank Ltd.; and
9. BOCOM International.

Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited and China CITIC Bank International are the joint global coordinators, and are, together with DBS Bank Ltd. and BOCOM International, the joint bookrunners and joint lead managers in respect of the offer and sale of the Notes. Morgan Stanley is the sole green structuring advisor of the Notes Issue. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited, China CITIC Bank International, DBS Bank Ltd. and BOCOM International is a third party independent of and not connected with the Company and its connected persons.

No PRIIPs key information document (KID) has been prepared as distribution to retail is prohibited in the European Economic Area or the United Kingdom.

The Notes and the Subsidiary Guarantees have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The Notes are being offered and sold by the initial purchasers outside the United States in compliance with Regulation S under the U.S. Securities Act. None of the Notes will be offered to the public in Hong Kong and none of the Notes will be placed with any connected persons of the Company.

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Principal terms of the Notes

The following is a summary of certain provisions of the Notes and the Indenture. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, the Notes, and the Subsidiary Guarantees provided by the Subsidiary Guarantors.

Notes Offered

Subject to certain conditions to completion, the Company will issue the Notes in the aggregate principal amount of USD200 million which will mature on 18 May 2026, unless earlier redeemed pursuant to the terms thereof.

Offer Price

The Offer Price of the Notes will be 98.8% of the principal amount of the Notes.

Interest

The Notes will bear interest at 4.85% per annum from 18 May 2021, payable semi-annually in arrears on 18 May and 18 November of each year, commencing 18 November 2021.

Ranking of the Notes

The Notes are (i) general obligations of the Company, (ii) senior in right of payment to any existing and future obligations of the Company expressly subordinated in right of payment to the Notes, (iii) at least pari passu in right of payment with all other unsecured, unsubordinated indebtedness of the Company (subject to any priority rights of such unsecured, unsubordinated Indebtedness pursuant to any applicable law), (iv) guaranteed by the Subsidiary Guarantors on a senior basis, subject to the limitations set forth in the Indenture, (v) effectively subordinated to secured obligations (if any) of the Company and the Subsidiary Guarantors, to the extent of the value of the assets serving as security therefor, and (vi) effectively subordinated to all existing and future obligations of the subsidiaries of the Company which are not providing guarantees under the Notes.

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Events of default

The events of default under the Notes include, among others: (a) default in the payment of principal (or premium, if any); (b) default in the payment of interest or additional amounts on any Note when the same becomes due and payable, and such default continues for a period of 30 consecutive days; (c) default in the performance or breach of the provisions of certain covenants relating to consolidation, merger and sale of assets or the failure by the Company to make or consummate an offer to repurchase the Notes upon a change of control triggering event or pursuant to certain covenants relating to limitation on asset sales; (d) default by the Company or certain of its subsidiaries in the performance or breach of any other covenant or agreement in the Indenture or under the Notes (other than the default specified in (a), (b) or (c) above) and such default or breach continues for a period of 30 consecutive days after written notice by the trustee of the Notes or the holders of the Notes of 25% or more in aggregate principal amount of the Notes; (e) default by the Company or certain of its subsidiaries in the repayment of indebtedness having, in the aggregate, an outstanding principal amount in excess of USD30.0 million (or dollar equivalent thereof); (f) one or more final judgments or orders for the payment of money are rendered against the Company or certain of its subsidiaries and an aggregate amount for all such final judgments or orders outstanding and not paid or discharged against the Company or certain of its subsidiaries exceeds USD30.0 million (or the dollar equivalent thereof); (g) involuntary bankruptcy or insolvency proceedings against the Company or certain of its subsidiaries; (h) voluntary bankruptcy or insolvency proceedings commenced by the Company or certain of its subsidiaries or consent to such similar action or effect any general assignment for the benefit of creditors; and (i) any Subsidiary Guarantor denying or disaffirming its obligations under its guarantees guaranteeing the obligations of the Notes or except as permitted by the Indenture, any such guarantee being determined to be unenforceable or invalid or for any reason ceasing to be in full force and effect.

If an event of default occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on the Notes then outstanding may become immediately due and payable.

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