Voluntary Announcement Acquisition of The

Home , Chenzhou, Huayin

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Cayman Islands with limited liability) (Stock code: 1129)

VOLUNTARY ANNOUNCEMENT

ACQUISITION OF THE ENTIRE EQUITY INTERESTS OF DATANG HUAYIN CHENZHOU ENVIRONMENTAL POWER COMPANY LIMITED* AND DATANG HUAYIN HENG YANG ENVIRONMENTAL POWER COMPANY LIMITED*

This is a voluntary announcement made by the Company.

On 21 September 2015 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company, and the Vendor entered into the Acquisition Agreements, pursuant to which the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the entire equity interests of Chenzhou Environmental and Heng Yang Environmental, at a consideration of RMB14.0 million (equivalent to approximately HK$17.08 million) and RMB11.0 million (equivalent to approximately HK$13.42 million), respectively.

INTRODUCTION

This is a voluntary announcement made by the Company.

Upon Completion, Chenzhou Environmental and Heng Yang Environmental will become indirectly wholly-owned subsidiaries of the Company and the financial performance and position of Chenzhou Environmental and Heng Yang Environmental will be consolidated to the Group’s consolidated financial statements.

* For identification purpose only

CHENZHOU ENVIRONMENTAL SALE AND PURCHASE AGREEMENT

Date

21 September 2015

Parties

Purchaser: Greenspring (Nanjing) Recycling Resources Investment Co., Ltd*

Vendor: Datang Huayin Electric Power Co., Ltd*

Interest to be acquired

Pursuant to the Chenzhou Environmental Sale and Purchase Agreement, the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell, the entire equity interest and the shareholder loan of the Chenzhou Environmental.

Consideration

The consideration for Chenzhou Environmental (“CE Consideration”), being RMB14.0 million (equivalent to approximately HK$17.08 million) was based on the result of public tender through Beijing Equity Exchange. The CE Consideration shall be payable to the Vendor according to the following manner:

1. RMB2.0 million (equivalent to approximately HK$2.44 million) shall be payable upon signing of the Chenzhou Environmental Sale and Purchase Agreement as a guarantee payment to Beijing Equity Exchange; and

2. the remaining RMB12.0 million (equivalent to approximately HK$14.64 million) shall be deposited to the bank account of Beijing Equity Exchange three days after the effective of the Chenzhou Environmental Sale and Purchase Agreement.

The Purchaser has agreed to instruct Beijing Equity Exchange to transfer the entire CE Consideration of RMB14.0 million (equivalent to approximately HK$17.08 million) to the Vendor’s designated bank account three days after the issue of transaction voucher by Beijing Equity Exchange.

The CE Consideration shall be satisfied by internal resources of the Group.

Equity interest transfer approval and handover

The Vendor shall procure the registration of the transfer of equity interest within 30 days from the issue of transaction voucher by Beijing Equity Exchange. According to the Directors, before the formal transfer of title and upon the full payment of the CE Consideration, the official seals and registration and business licenses of Chenzhou Environmental shall be held in joint custody by the Vendor and the Purchaser.

Repayment of Chenzhou Environmental’s borrowings

Pursuant to the Chenzhou Environmental Sale and Purchase Agreement, CE Consideration amounted to approximately RMB10.61 million (equivalent to approximately HK$12.94 million) represented payment of consideration for the settlement of Chenzhou Environmental’s outstanding borrowings. The Vendor has undertaken that all borrowings of Chenzhou Environmental will be settled prior to handover.

HENG YANG ENVIRONMENTAL SALE AND PURCHASE AGREEMENT

Date

21 September 2015

Parties

Purchaser: Greenspring (Nanjing) Recycling Resources Investment Co., Ltd*

Vendor: Datang Huayin Electric Power Co., Ltd*

Interest to be acquired

Pursuant to the Heng Yang Environmental Sale and Purchase Agreement, the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell, the entire equity interest and the shareholder loan of the Heng Yang Environmental.

Consideration

The consideration for Heng Yang Environmental (“HY Consideration”), being RMB11.0 million (equivalent to approximately HK$13.42 million) was based on the result of public tender through Beijing Equity Exchange. The HY Consideration shall be payable to the Vendor according to the following manner:

1. RMB2.0 million (equivalent to approximately HK$2.44 million) shall be payable upon signing of the Heng Yang Environmental Sale and Purchase Agreement as a guarantee payment to Beijing Equity Exchange; and

2. the remaining RMB9.0 million (equivalent to approximately HK$10.98 million) shall be deposited to the bank account of Beijing Equity Exchange three days after the effective of the Heng Yang Environmental Sale and Purchase Agreement.

The Purchaser has agreed to instruct Beijing Equity Exchange to transfer the entire HY Consideration of RMB11.0 million (equivalent to approximately HK$13.42 million) to the Vendor’s designated bank account three days after the issue of transaction voucher by Beijing Equity Exchange.

The HY Consideration shall be satisfied by internal resources of the Group.

Equity interest transfer approval and handover

The Vendor shall procure the registration of the transfer of equity interest within 30 days from the issue of transaction voucher by Beijing Equity Exchange. According to the Directors, before the formal transfer of title and upon the full payment of the HY Consideration, the official seals and registration and business licenses of Heng Yang Environmental shall be held in joint custody by the Vendor and the Purchaser.

Repayment of Heng Yang Environmental’s borrowings

Pursuant to the Heng Yang Environmental Sale and Purchase Agreement, HY Consideration amounted to approximately RMB8.79 million (equivalent to approximately HK$10.72 million) represented payment of consideration for the settlement of Heng Yang Environmental’s outstanding borrowings. The Vendor has undertaken that all outstanding borrowings of Heng Yang Environmental will be settled prior to handover.

INFORMATION OF THE VENDOR, CHENZHOU ENVIRONMENTAL, HENG YANG ENVIRONMENTAL AND THE PURCHASER

Information of the Vendor

The Vendor is a state-owned enterprise incorporated in the PRC which holds the entire equity interests of Chenzhou Environmental and Heng Yang Environmental. Upon Completion, the Vendor will cease to hold any interests in both Chenzhou Environmental and Heng Yang Environmental.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Vendor and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

Information of the Chenzhou Environmental

Chenzhou Environmental is a company incorporated in the PRC on 18 July 2012, which is currently 100% owned by the Vendor. Chenzhou Environmental principally engages in solid waste detox treatment and landfill gas power generation in Xiangshan Ping, Suxian District, Chenzhou City, Hunan Province.

Information of Heng Yang Environmental

Heng Yang Environmental is a company incorporated in the PRC on 22 February 2011, which is currently 100% owned by the Vendor. Heng Yang Environmental principally engages in solid waste detox treatment and landfill gas power generation in Zhang Mu Town, Hengyang County, Hunan Province.

Information of the Purchaser

The Purchaser is a company incorporated in the PRC and is an indirect wholly-owned subsidiary of the Company. The Purchaser is principally engaged in the exploitation, generation and sale of renewable energy.

REASONS FOR THE ACQUISITIONS

The Group engages in (i) provision of water supply and sewage treatment services; (ii) construction of water supply and sewage treatment infrastructure and (iii) investment and operation of new energy and renewable energy projects.

The Group tapped into the investment and operation of new energy and renewable energy business in 2013.

The Group commenced tapping into the investment and operation of new energy and renewable energy business in 2013. As at the date of this announcement, the Group is operating 7 existing garbage resources power generating projects under full operation. In order to further enhance its business presence and investment portfolio in the new energy and renewable energy business, the Group had been seeking investment opportunities to further invest in such business sector. In the second half of 2015 the Group acquired (i) Baoji City Electric Power Development Co., Ltd*, (“Baoji City”) which principally engages in new energy and renewable energy development, investment and associated technical research and consulting service, energy saving technical research and application in the PRC and (ii) Chengdu City Green State Renewable Energy Co., Limited* (“Chengdu City”), which owns an operation right to operate a landfill gas power generator plant in Changan landfill site, Sichuan Province. Similar to the acquisitions of Baoji City and Chengdu City, the Board is of the view that the Acquisitions represent another two valuable business opportunities for the Group to increase the Group’s presences in the new energy and renewable energy market and will, in the long run enhance the Group’s investment portfolio.

LISTING RULES IMPLICATIONS

This announcement is voluntarily made by the Company. None of the applicable percentage ratio(s) as set out in Rule 14.07 of the Listing Rules in respect of the Acquisitions exceeds 5%, the Acquisitions therefore do not constitute notifiable transactions of the Company or any connected transactions under Chapter 14A of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

“Acquisitions” the acquisition of the entire equity interest in Chenzhou Environmental and Heng Yang Environmental and their respective shareholder loans

“Acquisition Chenzhou Environmental Sale and Purchase Agreement and Heng Agreements” Yang Environmental Sale and Purchase Agreement

“Beijing Equity China Beijing Equity Exchange Limited*（北京產權交易所有 Exchange” 限公司）, an equity trading institution approved by the People’s Government of Beijing Municipality

“Board” the board of Directors

“Chenzhou Datang Huayin Chenzhou Environmental Power Company Environmental” Limited*（大唐華銀郴州環保發電有限公司） , a company incorporated in the PRC

“Chenzhou the sale and purchase agreement dated 21 September 2015 Environmental entered into between the Purchaser and the Vendor in relation Sale and Purchase to the acquisition of the entire equity interest in Chenzhou Agreement” Environmental and its shareholder loan from the Vendor

“Company” China Water Industry Group Limited (stock code: 1129), a company incorporated in Cayman Islands with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange

“Completion” completion of the Acquisitions

“connected person(s)” has the same meaning ascribed thereto under the Listing Rules

“Considerations” the aggregate consideration of RMB25.0 million (equivalent to approximately HK$30.50 million) for the Acquisitions payable to the Vendor

“Director(s)” director(s) of the Company

“Group” the Company and its subsidiaries

“Heng Yang Datang Huayin Heng Yang Environmental Power Company Environmental” Limited*（大唐華銀衡陽環保發電有限公司） , a company incorporated in the PRC

“Heng Yang the sale and purchase agreement dated 21 September 2015 Environmental entered into between the Purchaser and the Vendor in relation Sale and Purchase to the acquisition of the entire equity interest in Heng Yang Agreement” Environmental and its shareholder loan from the Vendor

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

“Purchaser” Greenspring (Nanjing) Recycling Resources Investment Co., Ltd* （青泓（南京）再生資源投資有限公司）, a company incorporated in the PRC and an indirect wholly-owned subsidiary of the Company

“PRC” the People’s Republic of China, which for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

“RMB” Renminbi, the lawful currency of the PRC

“Shareholder(s)” holder(s) of ordinary share(s) in the share capital of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“HK$” Hong Kong dollar, the lawful currency of Hong Kong

“Vendor” Datang Huayin Electric Power Co., Ltd*（大唐華銀電力股份有限公司）, a company incorporated in the PRC

“%” or “per cent.” percentage or per centum

Unless otherwise defined, for the purpose of this announcement and for the purpose of illustration only, RMB amounts have been translated using the following rates: RMB1.00:HK$1.22. Such translations should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate or at all.

By Order of the Board China Water Industry Group Limited Wang De Yin Chairman and Chief Executive Officer

Hong Kong, 21 September 2015

As at the date of this announcement, the Board comprises five executive Directors, namely Mr. Wang De Yin, Mr. Liu Feng, Mr. Lin Yue Hui, Ms. Chu Yin Yin, Georgiana and Ms. Deng Xiao Ting; and three independent non-executive Directors, namely Mr. Wong Siu Keung, Joe, Mr. Li Jian Jun and Mr. Guo Chao Tian.