All resources needed to develop/construct the 2nd 50 MW Biomass Renewable Energy Project such as power supplies, water supplies and straw supplies and 215 MU (1 MU = 667 sq. meters) of land position have been secured. The Company has secured, and/or will have secured the Advanced Technology (CAPS-II pyrolysis system, the leading technologies of biomass energy systems around the world), Efficient Combustion Resulting in Clean Emission (CAPS-II pyrolysis system is environmentally friendly and economically profitable, in disposing agricultural waste), and Modular Design Maximizing Flexibility etc.

The 2nd Biomass Energy Project (Power Capacity: 50MW) has very similar advantages and benefits from government polices and design as the Company's 1st Biomass Energy Project. The 2nd Biomass Energy Project (50 MW) has the total expected annual power generating capacity of 400 million kilowatt hours (kWh) and expected annual revenues of approximately 250 million Yuan, and expected annual net income (45% of Revenue) of approximately 112.5 million Yuan based on 8,000 annual operation hours.

The electricity sale price is RMB 0.60 Yuan/kWh (approximately USD $0.080/kWh) with Government Policy Protection for the implement purchase electricity price for biomass renewable energy with a government protected supervision system to ensure full purchase and payment.

The total investment for this Biomass Renewable Energy Project (Power Capacity: 50 MW) is also approximately RMB580 million Yuan: 35% in cash investment and 65% will be China-based bank loans with preferred interest rates with government policy protection for the Biomass Renewable Energy Project. The Biomass Renewable Energy Project will be expected to be in full production in approximately 2 years.

The Company's biomass to electricity technology is based upon processing biomass fuel like corn stalk, rice straw, cotton stalk, branches and other biomass by-products and waste material in two stages at temperatures sufficient to produce steam-generated electricity. Biomass is solar energy settled on Earth through photosynthesis of plants. Most forms of photosynthesis release oxygen as a by-product.

There are 170 billions tons of biomass produced on Earth, as the fourth biggest energy resource on the earth after coal, oil and natural gas, but only less than 1% of biomass is currently used as an energy resource, and most of this application is located in rural areas with lower than 10% of energy efficiency and high indoor pollution. Some portions of biomass burn on open fields, which causes air pollution. The Company's biomass to electricity system consists of a gasification chamber for drying, pyrolysis, gasification, and partial burning and conversion of the combustible materials into combustible gas, and a combustion chamber that consumes the combustible gas, plus a majority of the entrained combustible particles.

The advantage of the two stage processing is clean burning with controlled processing temperature. The process of solid biomass fuel at lower temperatures in the gasification chamber means that slagging of residual ash is eliminated. The Company's biomass to electricity technology is proven environmentally friendly. It eliminates the biomass waste and the harmful elements. The by-products, the heat energy and ash, create energy and fertilizer, thereby eliminating the need for the production of these products in an environmentally harmful manner.

The Company's biomass to electricity technology for converting biomass to electricity can be described in twelve steps from collection, to combustion, to the production of electricity.

1. The biomass fuel is collected in site and packed as bales.
2. The biomass fuel is stored in the storage yard and delivered to the biomass power plant.
3. The biomass fuel is weighed and taken to the storage area.
4. The biomass fuel is taken by the preloading system from the storage area to the loading hopper.
5. The hydraulic charging ram puts the biomass fuel from the loading hopper to the gasification chamber, where the biomass fuel is dried, heated, pyrolysed and partially oxidized. This releases moisture, combustible gas and volatile components.
6. The Residue ash is discharged from the gasification chamber by the ash removal system.
7. The collected ash is taken for further processing into fertilizer or other products.
8. The combustible gas and volatile components is then transferred to the combustion chamber where it is further oxidized and releases energy.
9. The energy released during this process heats the water/steam in the boiler to produce superheated steam.
10. The superheated steam drives the steam turbine and generator producing electricity.
11. The electricity is delivered into the power grid through substation.
12. The gas flows into the emission control system that includes a spray tower, bag filters, exhaust fans, and stack. The gas is treated to remove acid gas and particles to meet environmental requirements.

The Company is developing and building up its Renewable Energy Projects and Pipeline in Biomass Energy Projects and Hydropower Plants to reach a total Potential Power Capacity from 150 MW to 1600 MW Renewable Energy shortly via Merger and Acquisitions (M and A), Joint-Venture Partnerships with Biomass Projects and Hydropower Plants and companies, governments in China, or/and worldwide. The Company's Advanced Renewable Energy Strategy and Plan in Hydropower Plants and Biomass Energy Projects will enhance the technical, social, and environmental benefits of hydropower and provide investment and business activities in the cost-competitive hydropower capacity energy supply in China and worldwide, and also increase its worldwide shareholders values in the long term.

Biomass Renewable Energy in China
Renewable Power Producers are involved in generating electricity power from renewable energy sources, such as Hydropower (Water), Wind Energy and Certain Waster Products such as Biomass. The demand on renewable energy power in the world continues growing and is largely driven by long-term trends towards stronger policies for environmental protection. The combustion of fossil fuels such as coal, oil and natural gas to generate electricity power emits greenhouse gases, and is acknowledged worldwide as a major source to global warming.

For environmental protection, combined with an increase in electricity demand, lower-level growth of electricity supplies, and near all- time high energy commodity prices are enticing electricity producers and providers to diversify their mix of power generation sources to include a larger share of renewable power.

Biomass Renewable Energy:straw to energy. Straw is renewable energy and is a part of nature's plants. The carbon on the inside of the straw can change to organic carbon through absorption of carbon dioxide (CO2) from the atmosphere during photosynthesis. The biomass energy project, as an alternative and renewable energy source, is fully supported by the central government and local governments of China.

The development and construction of the renewable energy project is protected by The Renewable Energy Law, created on January 1, 2006 by the People Congress of China. The Chinese central government has set a series of tax exemption/deduction regulations to encourage the construction of renewable energy projects. The National Reform and Development Committee implements the purchase electricity price for renewable energy. It ensures the standard purchase electricity price is 0.25 Yuan/kWh addition base on the local average grid connection price (0.25-0.44 Yuan/kWh). In addition, there is a supervision system to ensure full purchase and payment.

Environmental Benefits:official statistical information from the Ministry of Agriculture in May 2005 shows that the annual production of straw in China is about 650 million tons. Studies done by international energy organizations show that crop straw is a type of clean renewable energy resource. Normally the heating value of crop straw is about 15MJ/kg. Crop straw is the fourth energy resource after coal, petroleum and natural gas. Many developed countries have already used straw as raw material to generate energy.

Each year China produces about 650 million tons of crop straw, which has the same energy content as 268 million tons of regular coal, about 13.7% of China coal production in 2004. By the year 2010, China will have had discarded 350-370 million tons of straw. If used to generate electrical power, it is equivalent to a 90 million KW generator running 5000 hours per year and generating 450,000 million kWh of electricity. This in return will gear the development of a greener economy and the greater sustainable economic development of China.

Economic Benefits:Biomass Renewable Energy Project: take 1040TPD as a sample, the average annual electricity sales revenue of a STE project is 232 million Yuan RMB, the average annual net profit is 100 million Yuan RMB, and the average net profit rate is 43%. The economic benefit is very profound. In addition, based on the most updated data from the China CDM Information Centre, the guiding price of CO2 is 51.21 RMB/ton. Recently, considering that 0.95kg of CO2 will be discharged when 1 kWh of electrical power is generated by using mineral fuel, each 4X260TPD STE plant is estimated to have 3.31 million tons of CO2 reductions during its 10 years CO2 reduction salable operation.

With a price of 51.21 RMB/ton, the 1040TPD project can have an additional income of about 170 million RMB, which is 17 million RMB per year. For the 780TPD project, the CO2 reduction is 2.48 million tons over 10 years. With a price of 51.21 RMB/ton, there will be 127 million RMB in income, which is 12.7 million RMB per year. According to China Energy Research Institute's 2006 update report, China's Biomass Energy implementation and development has reached its power capacity for 2GW in 2005. China Biomass Energy Capacity will reach a total of 5GW in 2010, and 30 GW in 2020.

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