Laos Sustainability Report

04 Message from the Chairman Power Construction Corporation of China 05 leno Chairman and Party Secretary of the Group: Yan Zhiyong With the proposal of the "Belt and Road" initiative, the ancient camel trail where the Eastern and the Western civilization integrated is now connecting China's rapidly developing economy and the interests of countries along the Belt and Road, building the world into a community of shared interest, shared destiny and shared responsibility featuring mutual political trust, economic integration and cultural inclusiveness. As one of the first Chinese enterprises to develop the overseas market, PowerChina's business in energy and infrastructure accounts for two thirds of its total revenue, tracking 1,469 projects in 57 out of the 65 countries along the Belt and Road, having 128 offices or subsidiaries in 42 countries, and implementing 350 engineering projects. Its business operations and coverage are highly aligned with the "Belt and Road" initiative. With the precise international business positioning of "Being a leader in the global clean, low-carbon energy, water resources and environmental construction area, a key force in the global infrastructure connectivity, and a project constructor, investor and developer that provides domestic and overseas customers with complete supply chain integration and total solutions", PowerChina fully utilizes our unique advantages in technical know-how, planning and design, construction, and investment and operations, develops a three-step international development strategy of "collectivization of international business, localization of international business, and globalization of the Group", forms a diversified market structure of balanced development in "grand civil engineering and grand construction" focusing on water conservancy and electric power construction and involving areas like roads and rail transit, municipal engineering, house building and water treatment, develops a diversified business network of premium markets centering on Asia and African and covering America, Oceania and Eastern Europe, and builds a marketing network across the world. The company has put much effort in developing in the Laotian market for many years, and has successfully built an international business operations pattern of "a big market in a small state". Total investment of the projects under construction or operation of Overseas Investment Co., Ltd., a subsidiary of PowerChina, exceeds USD3 billion, with installed capacity of 660,000 kilowatts and 730,000 kilowatts of completed projects and projects under construction respectively. In 2020, total installed capacity will reach 1.4 million kilowatts, with an average annual power generation of 5.5 billion kilowatt-hours. While developing its own business, PowerChina never forgets to perform corporate social responsibility (CSR), acting as a pioneer role model for Chinese enterprises "going global". The company has established a "three-full" CSR management model in the Laotian market, that is, full employee participation, full coverage and full integration, and actively built a "six-pattern" enterprise, that is, being credible, green, safe, vibrant, responsible and win-win, hence integrating CSR management awareness into every cell of the company. Over the years, PowerChina's CSR management and practice in Laos has won recognition from various parties. In 2016, Laos' Nam Ngum 5 Hydropower Station won the top award of China construction project, Luban Award (Overseas Projects); the cement factory the company invested locally has paid accumulative tax of close to USD40 million, and won the "Outstanding SME Development Award" and "Special Contribution Award" granted by the Laotian government; Nam Ngum 5 Power Company has donated 130 million Kips (local currency) for the forest conservation project, and bought 90,000 fries for release back to the rivers. As a result, it won the "Social and Environmental Special Contribution Award" granted by the Laotian government; and Nam Ou River Project (Phase II) in Laos has set a precedence of overseas hydropower project safe production and management in the "safety experience hall" built in the level-7 Hydropower Station. Laos Sustainability Report of Power Construction Corporation of China is our third sustainability report by country following that of Zambia and Indonesia. Through this report, we hope to summarize in all respects our social responsibility fulfillment practices and achievements in Laos, and build an open platform for communication with stakeholders. Moving forward, PowerChina will keep up its efforts in the overseas responsibility performance of central enterprises, and jointly make new achievements together with our stakeholders. January 2018 Laos Sustainability Report

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