The Yunnan Yunpeng Hydropower Project (hereafter, the Project) is located on Nanpanjiang River on the boundary of Luxi County and Qiubei County, Yunnan Province, People’s Republic of China. The Project is developed by China Resource Power Yunnan Honghe Company Limited(hereafter, the Project Owner). The purpose of the Project is to utilize the hydro resource to generate electricity which would otherwise have been produced by fossil fuel-fired power plants.

The Project is a dam-toe type hydropower station. The total installed capacity is 210MW (3*70MW), and the annual electricity generation is 803,500MWh. The electricity will supply the Yunnan province power grid and finally connect to the China Southern Power Grid (hereafter referred to as CSPG). The Project is expected to reduce emissions of greenhouse gases by an estimated 700,009tCO2e per year during the first crediting period. Without the CERs revenue, the Project cannot be realized because of the lack of profitability.

For the Project,

(a) The scenario existing prior to the start of the implementation of the project activity is CSPG

providing the same electricity service as the Project; (b) The project scenario is the implementation of the Project, the installation and operation of 3 sets of

turbines with a total capacity of 210MW which will supply an average annual generation of 803,500 MWh to CSPG and replace the same amount of electricity generated by fossil fuel fired power plants connected to CSPG;

(c) The baseline scenario is the same as the scenario existing prior to the start of implementation of the

project activity.

As a renewable energy project, the Project will produce positive environmental and economic benefits and contribute to the local sustainable development in comparison to other fossil-fuel (mainly coal) power generation. The specific sustainable development benefits of the Project are listed as follows:

• To displace a part of the electricity from coal-fired power plants, and thus will avoid environmental pollution caused by coal burning;

• To make good use of the local water resource to solve the difficulties of power shortage and voltage stability, improve the life quality of local people and reduce poverty; • To increase job opportunities: the Project will employ 123 persons during the project operation phase; • To increase tax income for local government.

CDM – Executive Board

These contributions are reaffirmed by the stakeholder consultation in section E. The project has received 100% support from local people. As for the environmental impacts arising from the project, they are primarily temporary and can be effectively mitigated through measures specified in the EIA report, hence considered to be insignificant.

Another issue which is of much concern for a hydropower project is migration and resettlement. The project involves migration of 481 inhabitants. All migrants have been resettled and compensated with subsidies, house and farmland etc. and are satisfied with the compensation plan.