Shanghai Electric : ANNOUNCEMENT ON THE PROGESS OF THE NON-PUBLIC ISSUANCE OF EXCHANGEABLE CORPORATE BONDS BY THE CONTROLLING SHAREHOLDER

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.

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SHANGHAI ELECTRIC GROUP COMPANY LIMITED 上海電氣集團股份有限公司

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 02727)

ANNOUNCEMENT ON THE PROGESS OF THE NON-PUBLIC ISSUANCE OF EXCHANGEABLE CORPORATE BONDS BY THE CONTROLLING SHAREHOLDER

This announcement is made by the board of directors of Shanghai Electric Group Company Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"), Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and with reference to Rule 13.10B of the Listing Rules.

References are made to the announcements of the Company dated 2 July 2018 in relation to the proposed non-public issuance of exchangeable corporate bonds (the "Exchangeable Bonds") by Shanghai Electric (Group) Corporation ("SEC"), the controlling shareholder of the Company; the announcement of the Company dated 9 January 2020 in relation to the No Objection Letter of the Exchangeable Bonds obtained by SEC and SEC's completion of application to pledge 1,120,000,000 A shares of the Company (representing 7.39% of the Company's total issued share capital by then); the announcement of the Company dated 17 January 2020 in relation to the completion of registration procedures for the share pledge on 15 January 2020 and the completion of transfer of the 1,120,000,000 A shares to "Shanghai Electric (Group) Corporation-Shanghai Electric (Group) Corporation 2020 Non-Public Offering of Exchangeable Corporate Bonds (Phase 1) Designated Shares Pledge Account"; the announcement of the Company dated 4 February 2020 in relation to the successful issuance of the Exchangeable Bonds (Phase 1); and the announcement of the Company dated 9 March 2021 in relation to the non-public issuance of exchangeable corporate bonds (the Exchangeable Bonds shall be issued in tranches, and this tranche is the second one, which is the first issuance of such kind for 2021) to be issued by SEC using the A shares of the Company held by it and its yields as the exchange objects, and the submission of application documents to open a special account for the pledge of exchangeable corporate bonds. Terms defined in the abovementioned announcements shall have the same meaning when used herein unless the context herein requires otherwise.

On 15 March 2021, the Company received a notice from SEC, which states that SEC has pledged 254,545,455 A shares (accounting for 1.62% of the Company's total share capital) (the "Pledged Shares") held by it to Guotai Junan Securities Co., Ltd. in accordance with the signed "Share Pledge Guarantee Contract" (the "Share Pledge"). The Pledged Shares serve to guarantee the exchange of the Company's shares for holders of the Exchangeable Bonds and to provide guarantee for the principal and interest repayment of the Exchangeable Bonds. The aforesaid registration procedures for the SharePledge were completed on 15 March 2021 at China Securities Depository and Clearing Corporation Limited Shanghai Branch, and the 254,545,455 A shares have been transferred to "Shanghai Electric (Group) Corporation Shanghai Electric (Group) Corporation 2021 Non-Public Offering of Exchangeable Corporate Bonds (Phase 1) Designated Shares Pledge Account". The date of release of the pledge shall be subject to the date of the release of the pledge of shares in China Securities Depository and Clearing Corporation Limited Shanghai Branch. The details of the Share Pledge are as follows:

1. Basic Information about the Share Pledge

Name of the shareholder	Whether a controlling shareholder or not	Number of shares being pledged	Restricted shares or not (If yes, please indicate the restricted type)	Whether Supplem ental pledge is adopted	Commen cement date of the Share Pledge	Expiry date of the Share Pledge	Pledgee	Proportion as to the number of shares held by the shareholder	Proportion as to the total issued share capital of the Company	Use of proceeds of the Share Pledge
Shanghai Electric (Group) Corporation	Yes	254,545,45 5 A Shares	No	No	12 March 2021	Until the Pledgee has completed the termination procedure of pledge	Guotai Junan Securitie s Co., Ltd.	2.96%	1.62 %	To guarantee the exchange of the Company's shares for holders of the Exchangeable Bonds and to provide guarantee for the principal and interest repayment of the Exchangeable Bonds.

2. The Share Pledge is not used as guarantees for matters such as performance compensation in major assets restructuring or other guarantee purposes.

3. Information of Accumulated Pledged Shares of the Shareholder

As of the date of this announcement, the accumulated pledged shares (including the Pledged Shares) of SEC, the Company's controlling shareholder, and its parties acting in concert are as follows:

Accumulat ed number of pledged shares before the Share Pledge	Accumulated number of pledged shares after the Share Pledge	Proportion	Proportion as to the total issued share capital of the Company	Pledged shares	Unpledged shares
Name of the shareholde r	Number of shares held by the shareholder	Shareh olding percent age	as to the number of shares held by the shareholder	Number of restricted shares among pledged shares	Number of frozen shares among pledged shares	Number of restricted shares among unpledged shares	Number of frozen shares among unpledged shares
Shanghai Electric (Group) Corporation	8,585,474,017	54.66 %	728,952,6 12	983,498,067	11.46%	6.26%	0	0	877,918,006	0
54.66 %	728,952,6 12	983,498,067	11.46%	6.26%	0	0	877,918,006	0
Total	8,585,474,017

The Share Pledge serves to guarantee the exchange of the Company's shares for holders of theExchangeable Bonds and to provide guarantee for the principal and interest repayment of the Exchangeable Bonds. SEC owns a good credit standing and repayment ability. With sufficient risk control capabilities, there is no risk of liquidation or forced liquidation of the Pledged Shares. Should the Pledged Shares be exposed to any liquidation risk, SEC will take measures including supplemental pledge and cash replenishment.

The Share Pledge will not cause change of the actual control over the Company and will not affect the production, operation and the corporate governance of the Company. If there are other significant changes to the above Share Pledge, the Company will perform its information disclosure obligations in a timely manner in accordance with relevant regulations.

In relation to the issuance of the Exchangeable Bonds and subsequent events, the Company will make disclosure in a timely manner in accordance with relevant regulatory requirements. Investors are hereby reminded to exercise caution when dealing in the securities of the Company.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC, 15 March 2021

As at the date of this announcement, the executive directors of the Company are Mr. ZHENG Jianhua, Mr. HUANG Ou, Mr. ZHU Zhaokai and Mr. ZHU Bin; the non-executive directors of the Company are Ms. YAO Minfang and Ms. LI An; and the independent non-executive directors of the Company are Dr. XI Juntong, Dr. XU Jianxin and Dr. LIU Yunhong.

* For identification purpose only