China Water Affairs : PROPOSED ISSUE OF SENIOR NOTES

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)

PROPOSED ISSUE OF SENIOR NOTES

The Company proposes to conduct an international offering of senior notes.

The pricing of the Notes, including the aggregate principal amount, the Offer Price and the interest rate, will be determined through a book building exercise to be conducted by Morgan Stanley, BNP PARIBAS and ANZ as the joint global coordinators, and are, together with The Bank of East Asia, Limited and DBS Bank Ltd., the joint bookrunners and joint lead managers of the Notes Issue. Upon finalising the terms of the Notes, it is expected that Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited, DBS Bank Ltd., the Company and the Subsidiary Guarantors will enter into the Purchase Agreement.

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.

As no binding agreement in relation to the Notes Issue has been entered into as at the date of this announcement, the Notes Issue may or may not materialize. The completion of the Notes Issue is subject to market conditions and investors' interest. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. A further announcement in respect of the Notes Issue will be made by the Company should the Purchase Agreement be signed.

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THE NOTES ISSUE

Introduction

The Company proposes to conduct an international offering of senior notes. The pricing of the Notes, including the aggregate principal amount, the Offer Price and the interest rate, will be determined through a book building exercise to be conducted by Morgan Stanley, BNP PARIBAS and ANZ as the joint global coordinators, and are, together with The Bank of East Asia, Limited and DBS Bank Ltd., the joint bookrunners and joint lead managers of the Notes Issue. The terms and conditions of the Notes are still being determined and will likely include guarantees to be provided by the Subsidiary Guarantors. Upon finalising the terms of the Notes, it is expected that Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited, DBS Bank Ltd. and the Company, among others, will enter into the Purchase Agreement, pursuant to which Morgan Stanley, BNP PARIBAS, ANZ, The Bank of East Asia, Limited and DBS Bank Ltd. will be the initial purchasers of the Notes. The Company will make a further announcement in respect of the Notes Issue upon the execution of the Purchase Agreement.

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.

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

No PRIIPs key information document (KID) has been prepared as not available to retail in the United Kingdom.

Reasons for the Notes Issue

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.

Listing

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 has been sought in Hong Kong.

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GENERAL

As no binding agreement in relation to the Notes Issue has been entered into as at the date of this announcement, the Notes Issue may or may not materialize. The completion of the Notes Issue is subject to market conditions and investors' interest. Investors and shareholders of the Company are urged to exercise caution when dealing in the securities of the Company. A further announcement in respect of the Notes Issue will be made by the Company should the Purchase Agreement be signed.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and phrases have the following meanings:

"2017 Notes"	USD300,000,000 5.25% senior notes due 2022
"ANZ"	Australia and New Zealand Banking Group Limited
"BNP PARIBAS"	BNP Paribas
"Board"	the Board of directors of the Company
"Company"	China Water Affairs Group Limited, an exempted
	company incorporated under the laws of the Cayman
	Islands and continued as an exempted company in
	Bermuda with limited liability, the shares of which are
	listed on the Stock Exchange
"connected person"	has the meaning ascribed to it under the Listing Rules
"DBS Bank Ltd."	DBS Bank Ltd.
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC
"Listing Rules"	the Rules Governing the Listing of Securities on the
	Stock Exchange
"Morgan Stanley"	Morgan Stanley & Co. International plc
"Notes"	the USD senior notes to be issued by the Company
	subject to the terms and conditions of the Purchase
	Agreement

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"Notes Issue"	the proposed issue of the Notes by the Company
"Offer Price"	the final price at which the Notes will be sold
"PRC"	The People's Republic of China which, for the purpose
	of this announcement, excludes Hong Kong, the Macau
	Special Administrative Region and Taiwan
"PRIIPs"	the Packaged Retail and Insurance-based Investment
	P r o d u c t s ( a s d e f i n e d b y R e g u l a t i o n ( E U ) N o
	1286/2014, as amended)
"Purchase Agreement"	the agreement proposed to be entered into by the
	Company, the Subsidiary Guarantors, Morgan Stanley,
	BNP PARIBAS, ANZ, The Bank of East Asia, Limited
	and DBS Bank Ltd. in relation to the Notes Issue
"SGX-ST"	Singapore Exchange Securities Trading Limited
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subsidiary Guarantees"	the guarantees to be provided by the Subsidiary
	Guarantors in respect of the Notes Issue
"Subsidiary Guarantors"	certain existing subsidiaries of the Company to
	guarantee the Notes
"The Bank of East Asia,	The Bank of East Asia, Limited
Limited"
"U.S. Securities Act"	the United States Securities Act of 1933, as amended
"USD"	United States dollar
	By Order of the Board
	China Water Affairs Group Limited
	Duan Chuan Liang
	Chairman
Hong Kong, 12 April 2021

As at the date of this announcement, the Board comprises five executive Directors, being Mr. Duan Chuan Liang, Ms. Ding Bin, Ms. Liu Yu Jie, Mr. Li Zhong and Mr. Duan Jerry Linnan, four non-executive Directors, being Mr. Zhao Hai Hu, Mr. Zhou Wen Zhi, Mr. Makoto Inoue and Ms. Wang Xiaoqin, and five independent non-executive Directors, being Mr. Chau Kam Wing, Mr. Siu Chi Ming, Ms. Ho Ping, Ms. Zhou Nan and Mr. Chan Wai Cheung Admiral.

• For identification purposes only

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