Biomass, China

China Holdings, Inc. Announces 2nd Biomass Renewable Energy Project (50MW)

November 5, 2007 (CNNMoney) – China Holdings, Inc. , a global diversified asset holdings Company, and its subsidiaries engage in multiple China-focused business activities including energy, renewable energy, resources, utilities, finance, real estate, and pharmaceuticals, announced today the Company has executed its 2nd development contract for the exclusive rights to develop and construct the 2nd Biomass Renewable Energy Project (Power Capacity: 50 MW) through its controlled subsidiary “China Power, Inc.” with the local government in AnHui Province, the People’s Republic of China. The breakthrough brought the Company potential power capacity: 100 MW in a biomass energy pipeline

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 & Pipeline in Biomass Energy Projects & Hydropower Plants to reach a total Potential Power Capacity from 150 MW to 1600 MW Renewable Energy shortly via Merger & Acquisitions (M&A), Joint-Venture Partnerships with Biomass Projects & Hydropower Plants and companies, governments in China, or/and worldwide. The Company’s Advanced Renewable Energy Strategy & 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.

The Company’s objective is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China, or/and worldwide, or/and which derive a significant part of their revenue from China, or/and worldwide. For the Company’s profile, please feel free to via website: http://www.chinaholding.net .

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