China Holdings Inc., through its controlled subsidiary China Power Inc., signed a development contract with the HeBei Province local government for the rights to develop and construct 50 MW of biomass renewable energy projects utilizing straw.  The projects have a total expected annual power generating capacity of 400 million kWh and expected annual revenues of approximately US$33.3 million.

Total investment in the projects is approximately US$77.2 million, 35 percent in cash and 65 percent from China-based bank loans with preferred interest rates with government policy protection for the biomass renewable energy projects.  Full production is expected in about two years.

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