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Shareholder Loan Contract

This is an actual contract by AES China Generating Co.
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Sectors: Utilities
Governing Law: China
Effective Date: April 26, 1996
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Information contained herein, marked with [***], is being filed pursuant to a request for confidential treatment.


Exhibit 10.28


SHAREHOLDER LOAN CONTRACT


This SHAREHOLDER LOAN CONTRACT (this "Contract") is made and entered into as of April 26, 1996 by and between JIAOZUO WAN FANG POWER COMPANY LIMITED ("Borrower"), a Sino-foreign cooperative joint venture enterprise organized and existing under the laws of the People's Republic of China (Business License number is 00037-1) with its registered office in Jiaozuo City, Henan Province, China (telephone no: 391-329-3144) and AES CHINA POWER HOLDING CO. (L), LTD. ("Lender"), a Labuan company wholly-owned by AES China Generating Co. Ltd. (Company no: LL00460).


1. The Loans.
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Subject to the terms and conditions of this Contract, Lender agrees to make to Borrower loans in an aggregate amount not to exceed US$ 68,584,000 (including interest during construction as provided in Section 3 hereof) in accordance with the Joint Venture Contract dated as of March 27, 1996 between Jiaozuo Power Partners, L.P. and Jiaozuo Aluminum Mill (the "Joint Venture Contract") and based on the exchange rate of US$ 1 to RMB 8.3, which loans will be divided into the Tranche A Loans to be used mostly for the first unit in an aggregate amount not to exceed US$ 34,292,000 (the "Tranche A Loans") and the Tranche B Loans to be used mostly for the second unit in an aggregate amount not to exceed US$ 34,292,000 (the "Tranche B Loans"; each such Tranche A or Tranche B Loan individually a "Loan" and collectively the "Loans") from time to time between April 26, 1996 and July 1, 1998 (the "Termination Date"). The Loans shall be evidenced by a promissory note of Borrower, substantially in the form of Exhibit A (the "Note"). Subject to the conditions set forth in Section 6, each Loan shall be made (a) in accordance with the drawdown schedule attached as Exhibit B and (b) on a day on which banks are authorized to open for business in New York, New York, the United States of America (a "Banking Day").


2. Maturity.
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(a) Borrower shall repay the aggregate outstanding principal amount of the Loans in accordance with the amortization schedule attached as Exhibit C. In any event, Borrower shall repay such Loans in full by July 1, 2006. Borrower shall take all necessary actions to ensure that its cash on hand due to depreciation may be used to repay the principal of the Loans and shall so use such available cash.


(b) Borrower shall have the right to prepay the Loans at any time or from time to time. Each of such optional prepayments shall be in an amount not less than US$ 5 million and shall be made with at least six months prior written notice to Lender. A Loan prepaid may not be reborrowed. The prepayments of the Loans will be applied in inverse order of maturity to the then remaining installments of principal to become due as set forth in Exhibit C.


3. Interest and Fees.
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-1- [***] Filed separately with the Commission pursuant to a request for confidential treatment.


(a) Borrower shall pay interest on the Loan(s) outstanding from time to time at the rate of [***]% per annum, which shall be computed on the basis of the actual number of days elapsed in a year of 360 days. Interest on the Tranche A Loans shall accrue until the Unit One Commercial Operation Date (as defined in the Power Purchase and Sale Contract dated as of April 26, 1996 between Borrower and the Henan Electric Power Corporation (the "Power Purchase and Sale Contract")) and be added to principal. Interest on the Tranche B Loans shall accrue until the Unit Two Commercial Operation Date (as defined in the Power Purchase Agreement) and be added to principal. Interest payments shall begin after the Unit One Commercial Operation Date in the case of the Tranche A Loans and after the Unit Two Commercial Operation Date in the case of the Tranche B Loans. Interest payments shall be payable quarterly in arrears on the first day of each January, April, July and October starting from the second such date to occur after the Unit One Commercial Operation Date in the case of the Tranche A Loans and after the Unit Two Commercial Operation Date in the case of the Tranche B Loans and on final maturity of the Loans (each such date, a "Payment Date"). Lender shall calculate and notify Borrower of the actual amount of each interest payment 15 days prior to each Payment Date.


(b) Borrower shall pay to Lender a guarantee fee of [***]% per annum on the Loan(s) outstanding, which shall be computed on the basis of the actual number of days elapsed in a year of 360 days. Such guarantee fee shall accrue until the Unit One Commercial Operation Date in the case of the Tranche A Loans or until the Unit Two Commercial Operation Date in the case of the Tranche B Loans and be added to the principal of the Loans. Payment of the guarantee fee shall begin after the Unit One Commercial Operation Date in the case of the Tranche A Loans or after the Unit Two Commercial Operation Date in the case of the Tranche B Loans and shall be payable quarterly in arrears on each Payment Date. Lender shall calculate and notify Borrower of the actual amount of each payment of the guarantee fee 15 days prior to each Payment Date.


(c) If Borrower fails to pay any sum payable under this Contract when due, Borrower shall from time to time on demand pay interest on such sum from and including the due date to the date of actual payment (after as well as before judgment) at a per annum interest rate equal to [***]% above the interest rate specified in Section 3(a).


4. Method of Payment.
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All sums, including all principal, interest and fees, payable to Lender shall be payable in US Dollars not later than 10:00 a.m. Beijing time on each Payment Date to the account of Lender (no. [ ]) at [ ] Bank, or such other account within China as Lender notifies to Borrower.


5. Representations and Warranties.
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-2-
Borrower represents as of this date and the date each Loan is made that:


(a) Borrower is a Sino-foreign cooperative joint venture enterprise duly established and existing in good standing under the laws of the People's Republic of China;


(b) the execution, delivery and performance of this Contract, the Note and each other document delivered in connection herewith or therewith are within Borrower's power, have been duly authorized by all necessary legal action, and do not contravene any law or any contractual restriction binding on Borrower;


(c) this Contract is, and the Note and each other document delivered in connection herewith or therewith when executed will be, the legal, valid and binding obligations of Borrower, enforceable in accordance with their respective terms;


(d) all governmental approvals necessary for the execution of this Contract, the Note and each other document delivered in connection herewith or therewith have been obtained and all governmental approvals necessary for the performance and enforceability hereof and thereof shall have been obtained prior to and shall be in full force and effect on the date of each drawdown hereunder;


(e) the obligations of Borrower hereunder and under the Note and any other document executed in connection herewith or therewith constitute the direct, unconditional and general obligations of Borrower and the sum of all of Borrower' other indebtedness does not exceed RMB five million except the loans provided by other shareholders of Borrower in the amount of not exceeding RMB 243,963,000, the working capital loans or the list of debts of over RMB one million each specified in Appendix D hereto;


(f) Borrower is not in default under any agreement or obligation to which it is a party or by which it may be bound; and


(g) no Event of Default (as hereinafter defined), and no event which with the giving of notice or the passing of time, or both, would constitute an Event of Default, has occurred and is continuing.


6. Conditions Precedent.
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The obligation of Lender to make each Loan hereunder is subject to the fulfillment, as determined solely by Lender, of the following conditions precedent at least three Banking Days prior to the proposed date of each drawdown of such Loan (except as otherwise indicated below) and the continued fulfillment of such conditions on the date of such drawdown:


-3-


(a) All documents, licenses, approvals and permits required in connection with the establishment of Borrower as a Sino-foreign cooperative joint venture and the design, construction, ownership, operation and management of the Power Plant (as defined in the Power Purchase and Sale Contract) shall have been obtained and are in full force and effect; without limiting the generality of the foregoing, such approvals shall include approval by the Ministry of Foreign Trade and Economic Cooperation of China of the Joint Venture Contract and Borrower's Articles of Association, approval by the Henan Provincial Pricing Bureau of the pricing formula set forth in Appendix A to the Power Purchase and Sale Contract, approval by the relevant government department of the Land Use Rights (as defined in the Joint Venture Contract), approval by the relevant government department of the early return of the registered capital to the Foreign Party (as defined in the Joint Venture Contract), issuance of Borrower's business license, approval regarding access to the foreign exchange adjustment center or foreign exchange banks, and approvals referred to in Article 2.3(a) of the Joint Venture Contract;


(b) All registered capital and other loans required to be funded under the Joint Venture Contract by any party as of such date shall have been funded in full;


(c) Lender shall have received the Note, duly executed by Borrower, which shall be in full force and effect;


(d) Lender shall have received satisfactory evidence of the due authorization, execution and delivery of this Contract, the Note and each other document delivered in connection herewith or therewith by Borrower;


(e) Lender shall have received certified copies of all governmental approvals and filings required for the execution, delivery, performance and enforceability of this Contract, the Note and each other document delivered in connection herewith or therewith and such approvals and filings are in full force and effect;


(f) Each of the representations and warranties set forth in Section 5 shall be true and correct in all material respects;


(g) Borrower shall have performed in all material respects its obligations required to be performed under this Contract, the Note and all other documents delivered in connection herewith or therewith;


(h) All contracts referenced in the Joint Venture Contract including without limitation all Project Contracts (as defined in the Joint Venture Contract) and all other material contracts required in connection with the construction of the Project (as defined in the Power Purchase and Sale Contract) shall have been executed and delivered by all parties thereto and are in full force and effect;


-4-


(i) Lender's independent engineer or, at the request of Lender, Borrower, shall have certified in a manner satisfactory to Lender that all applicable construction milestones as set forth in Exhibit B have been met;


(j) Borrower shall have purchased the insurance policies required by Lender and such policies shall be in full force and effect;


(k) Borrower shall have received from Jiaozuo Aluminum Mill evidence in form and substance satisfactory to Lender that Chinese banks have committed to provide Renminbi loans needed for the Project;


(l) Lender shall have received a favorable opinion of Zheng, Liu, Yuan & Zhou Law Office with respect to the transactions contemplated hereby and such other approvals, opinions and documents as Lender may reasonably request; and


(m) Fifteen Banking Days prior to each requested date of borrowing, Borrower shall submit an application for borrowing to Lender in form and substance reasonably satisfactory to Lender. Each such application shall state the requested amount and date of the borrowing which date shall not be earlier than the relevant drawdown date specified in Exhibit B, shall be signed by Borrower and shall constitute a representation and warranty by Borrower that it is in compliance with all the conditions precedent set forth herein and a reaffirmation as of the requested drawdown date of all of Borrower's representations and warranties contained herein.


7. Covenants.
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(a) Borrower shall at all times (i) preserve and maintain in full force and effect its existence as a cooperative joint venture under the laws of China, its qualification to do business in Henan Province
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