China Water Industry and Huayu Water Industrial Investment Fund Management Ltd Sign Strategic Cooperative Agreement

HONG KONG, Nov. 10, 2010 /PRNewswire-Asia/ -- China Water Industry Group Limited ("China Water Industry", stock code: 1129) has announced that the Company has entered into a strategic cooperative framework agreement (the "Agreement") with Huayu Water Industrial Investment Fund Management Ltd* ("Huayu Water Industrial Fund Management"), aiming to develop a close cooperation relationship to explore the water industry in China.

Pursuant to the Agreement, the parties agreed to forge a long-term comprehensive strategic collaboration and set up a new water industry investment company ("Investment Company"). Huayu Water Industrial Fund Management will inject capital to the new Investment Company, while China Water Industry will bring in quality water assets, which will serve as a fundamental platform for both parties to carry out investment and operation of water industry projects.

Huayu Water Industrial Fund Management is a professional industry investment fund management company approved by the State Council and the National Development and Reform Commission (NDRC). Western Water Treatment Fund managed by Huayu Water Industrial Fund Management is a professional industry investment fund approved by the State Council and the NDRC. The fund investment targets in water, energy conservation, and infrastructure sectors nationwide with a focus on western China. With a large-scale of capital, vast resources and solid experience in the investment management field, the fund has also gained the broad support of the central departments and other municipal Government including Beijing, Xi'an, Chengdu, Kunming, etc.

The substantial shareholder of Huayu Water Industrial Fund Management is China Energy Conservation and Environmental Protection Group, the only state- owned enterprise engaged mainly in the operations of energy conservation, emission reduction and environmental protection which is directly funded by the Central Government. The daily capacity of its water treatment business has reached five million tonnes, or nearly two billion tonnes annually. Other shareholders include CAS Investment Management Co., Ltd, formerly known as the Chinese National Economic Council-CAS Scientific and Technological Promotion & Economic Development Foundation, and China Water Investment Co., Ltd, a national corporation specialising in water investment and operation and management co-founded by the Bureau of Comprehensive Development of the Ministry of Water Resources and Sinohydro Corporation.

* for identification purpose only

Mr. Li Yu Gui, Chairman of China Water Industry, said, "Our business direction is completely in line with the investment direction of Huayu Water Industrial Fund Management. With their strong support, we will further enhance our market expansion effort to sharpen our competitive advantage, actively identify and acquire quality projects with development potential, and endeavour to improve the quality and efficiency of operational management. Leveraging the advantage of the strategic cooperative platform, we are confident this cooperative opportunity will offer a bright prospect for our overall business through integrating our corporate assets and boosting our company's profit."

About China Water Industry Group Limited (stock code: 1129)

China Water Industry Group Limited is set to become a leader in China's water investment and operation and management industry. The Company has been actively tapping the water industry in China during these years. The Company has progressively acquired all or part of the interests in a number of water supply and/or sewage treatment projects in Shandong Province, Anhui Province, Shaanxi Province, Hebei Province, Jiangxi Province, Hainan Province and Guangdong Province. With a wealth of professional management team comprising experts of city construction and water infrastructure investment, operation and management, the Company has also forged close cooperative relationship with many leading water facilities construction and design enterprises in China.

SOURCE China Water Industry Group Limited