UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 10)*

China Hydroelectric Corporation

(Name of Issuer)

Ordinary Shares, $0.001 par value per share**

American Depositary Shares

(Title of Class of Securities)

16949D101***

(CUSIP Number)

NewQuest Asia Fund I (G.P.) Ltd.

c/o Walkers Corporate Services Limited

Walker House

87 Mary Street, George Town

Grand Cayman, Cayman Islands KY1-9005

October 2, 2012

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

¹ China Environment Fund III Management, L.P. (“CEF III Management”), the general partner of China Environmental Fund III, L.P. (“CEF III”) and China Environment Fund III Holdings Ltd. (“CEF III Holdings”), the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and Messrs. Donald C. Ye, Shelby Chen, Michael Li, Larry Zhang and Ian Zhu, who comprise the members of the CEF III Investment Committee (the “CEF III Investment Committee Members”), may be deemed to have shared power to vote these shares.

² CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

³ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁴ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁵ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁶ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁷ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁸ CEF III Management, the general partner of CEF III, and CEF III Holdings, the general partner of CEF III Management, may each be deemed to have sole power to vote these shares, and the CEF III Investment Committee Members may be deemed to have shared power to vote these shares.

⁹ Includes 1,980,537 ADSs, representing 5,941,611 Ordinary Shares. In addition, Aqua Resources Asia Holding Limited (“ARAHL”) holds an additional 2 Ordinary Shares of the Company.

¹⁰ Includes 1,980,537 ADSs, representing 5,941,611 Ordinary Shares. In addition, ARAHL holds an additional 2 Ordinary Shares of the Company.

¹¹ Includes 1,980,537 ADSs, representing 5,941,611 Ordinary Shares. In addition, ARAHL holds an additional 2 Ordinary Shares of the Company.

This Amendment No. 10 relates to the Schedule 13D filed with the Securities and Exchange Commission on April 19, 2011 and amended on April 25, 2011, August 21, 2012, August 30, 2012, September 5, 2012, September 10, 2012, September 12, 2012, September 17, 2012, September 20, 2012 and September 28, 2012 (as so amended, the “Original 13D”), by the Reporting Persons named therein. Capitalized terms used but not defined herein shall have the meaning set forth in the Original 13D. Except as set forth herein, the Original 13D is unmodified.

Item 2 is hereby amended to add the following:

As previously disclosed in the Original 13D, the Voting Agreement and the ARAHL Letter of Support, each dated August 21, 2012, were entered into for the purpose of, among other things, calling an extraordinary general meeting of the Company to seek representation on the Company’s board of directors (the “Board”). Effective upon the closing of the EGM, the Voting Agreement and the ARAHL Letter of Support terminated. Accordingly, the individual members of the Consortium are no longer members of a Section 13(d) group with respect to securities of the Company.

Item 4 is hereby amended to add the following:

As previously disclosed in the Original 13D, the Voting Agreement and the ARAHL Letter of Support, each dated August 21, 2012, were entered into for the purpose of, among other things, calling an extraordinary general meeting of the Company to seek representation on the Company’s board of directors (the “Board”). Effective upon the closing of the EGM , the Voting Agreement and the ARAHL Letter of Support terminated. Accordingly, the individual members of the Consortium are no longer members of a Section 13(d) group with respect to securities of the Company.

Members of the Consortium have entered into a settlement agreement (the “Settlement Agreement”), effective as of September 30, 2012, with the Company, certain of its affiliates and executive officers, and Vicis Capital, LLC (“Vicis”), relating to the proxy contest, the EGM and various related matters.

The foregoing summary of the Settlement Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Settlement Agreement, which is attached hereto as Exhibit 99.2 and is incorporated into this Item 4 by reference.

On October 2, 2012, the Company issued a press release regarding the Settlement Agreement (the “Settlement Press Release”). A copy of the Settlement Press Release is attached hereto as Exhibit 99.1 and is incorporated into this Item 4 by reference.

Item 5 is hereby amended and restated to read as follows:

(a) The foregoing calculations of percentage ownership are based on 161,989,097 Ordinary Shares issued and outstanding as represented by the Company in its Annual Report on Form 20-F filed on April 27, 2012.

CPI and NewQuest:

CPI directly beneficially owns 38,744,395 Ordinary Shares, or approximately 23.9% of the Ordinary Shares. NewQuest, its sole general partner, NewQuest GP, and NewQuest Management, an investment manager of NewQuest GP, may be deemed to beneficially own such 38,744,395 Ordinary Shares, which represents approximately 23.9% of the Ordinary Shares.

Swiss Re:

Swiss Re directly beneficially owns 10,114,508 Ordinary Shares, or approximately 6.2% of the total outstanding Ordinary Shares of the Company.

CEF III:

CEF III directly beneficially owns 7,838,595 Ordinary Shares, or approximately 4.8% of the total outstanding Ordinary Shares of the Company. CEF III Management, the general partner of CEF III, CEF III Holdings, the general partner of CEF III Management, and the CEF III Investment Committee Members, may be deemed to beneficially own such 7,838,595 Ordinary Shares, or approximately 4.8% of the total outstanding Ordinary Shares of the Company.

ARAHL:

ARAHL directly beneficially owns: (i) 1,980,537 ADSs, representing 5,941,611 Ordinary Shares; and (ii) two Ordinary Shares, which together represents approximately 3.7% of the total outstanding Ordinary Shares of the Company. Aqua (the parent company of ARAHL), FWCM (the discretionary investment manager of Aqua), the non-executive directors of ARAHL and the members of the FWCM Aqua Investment Committee, may be deemed to beneficially own such: (i) 1,980,537 ADSs, representing 5,941,611 Ordinary Shares; and (ii) two Ordinary Shares, which together represents approximately 3.7% of the Ordinary Shares.

Abrax:

Abrax directly beneficially owns 2,316,004 Ordinary Shares, or approximately 1.4% of the total outstanding Ordinary Shares of the Company.

IWU:

IWU directly beneficially owns 1,085,783 Ordinary Shares, or approximately 0.7% of the total outstanding Ordinary Shares of the Company.

The Reporting Persons declare that neither the filing of this Statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act together with any other person) as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding or disposing of securities of the Company or otherwise with respect to the Company or any securities of the Company or (ii) a member of any group with respect to the Company or any securities of the Company.

(b) Number of shares as to which each Reporting Person has:

(i) sole power to vote or to direct the vote:

See Item 7 on the cover page(s) hereto.

(ii) shared power to vote or to direct the vote:

See Item 8 on the cover page(s) hereto.

(iii) sole power to dispose or to direct the disposition of:

See Item 9 on the cover page(s) hereto.

(iv) shared power to dispose or to direct the disposition of:

See Item 10 on the cover page(s) hereto.

(c) None of the Reporting Persons and, to the best of the Reporting Persons’ knowledge, none of the Listed Persons, has effected any transaction in the ADSs or Ordinary Shares during the past 60 days.

(d) No other person is known by the Reporting Persons to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Ordinary Shares that may be deemed to be beneficially owned by the Reporting Persons.

(e) As a result of the dissolution of the Section 13(d) group, each of CEF III, CEF III Management, CEF III Holdings, Donald Ye, Shelby Chen, Michael Li, Larry Zhang, Ian Zhu, Aqua, ARAHL, FWCM, Abrax, Abrax Limited, and IWU ceased to be a beneficial owner of more than 5% of the securities of the Company.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

Exhibit 99.1 and Exhibit 99.2 are hereby incorporated into this Item 6 by reference.

Item 7. Material to be Filed as Exhibits.

The following are filed as exhibits hereto:

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Exhibit 99.1

China Hydroelectric Corporation Announces Settlement Agreement Relating to Proxy Contest

Settlement Agreement Provides for Cooperation and Smooth Transition of the Company to the New Board of Directors

NEW YORK, October 2, 2012 /PRNewswire-Asia-FirstCall/ — China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the “Company”), an owner, developer and operator of small hydroelectric power projects in the People’s Republic of China, today announced that it, together with certain of its affiliates and executive officers, and Vicis Capital, LLC (“Vicis”), entered into a settlement agreement (the “Settlement Agreement”), effective as of September 30, 2012, with CPI Ballpark Investments Ltd., Swiss Re Financial Products Corporation, China Environment Fund III, L.P., Aqua Resources Asia Holdings Limited, Abrax, IWU International Ltd., and certain of their affiliates (collectively, the “Shareholder Group”), relating to the proxy contest, the extraordinary general meeting of the Company that was held on September 28, 2012 (the “EGM”) and various related matters. The Settlement Agreement provides that, among other things:

“We are pleased that this matter has been resolved and look forward to working productively to address the issues facing the Company” stated Mr. Gupta, on behalf of the new members of the Board. “We believe that the agreed upon resolution of the election contest delivers a clear result that will allow a smooth transition and permit the new board to focus its full attention on implementing a strategic plan and delivering value to the shareholders.”

About China Hydroelectric Corporation

China Hydroelectric Corporation (NYSE: CHC, CHCWS) (the “Company”) is an owner and operator of small hydroelectric power projects in China. Through its geographically diverse portfolio of operating assets, the Company generates and sells electric power to local power grids. Led by an international management team, the Company’s primary business is to identify, evaluate, acquire, develop, construct and finance hydroelectric power projects. The Company currently owns 26 operating hydropower stations in China with total installed capacity of 548 MW, of which it acquired 22 operating stations and constructed four. These hydroelectric power projects are located in four provinces: Zhejiang, Fujian, Yunnan and Sichuan. Hydropower is an important factor in meeting China’s electric power needs, accounting for approximately 22% of total nation-wide capacity.

For further information about China Hydroelectric Corporation, please visit the Company’s website at http://www.chinahydroelectric.com.

For further information, please contact:

Company:

John E. Donahue, VP of Investor Relations

Phone: +1-646-467-9810

Email: john.donahue@chinahydroelectric.com

Scott Powell, Senior Vice President

MZ Group

Phone: +1-212-301-7130

Email: scott.powell@mzgroup.us

Exhibit 99.2

Settlement Agreement

This Settlement Agreement (this “Agreement”) is effective as of September 30, 2012 (the “Effective Date”) by and among the parties signatory hereto.

RECITALS

The undersigned parties desire to enter into this Agreement in settlement of various differences the parties have with respect to the EGM (as defined below) called by certain members of the Shareholder Group and various related matters. For purposes of this Agreement, the “Shareholder Group” is defined collectively as the entities and individuals listed on Annex A hereto.

NOW THEREFORE, in consideration of the foregoing recitals and the provisions set forth herein, the validity and sufficiency of which the Parties acknowledge, the parties agree as follows.

New Board

Mr. Kuhns, Mr. Hochman, Mr. Outerbridge, and Mr. Dixon hereby agree that they are no longer directors of the Company as a result of the vote at the EGM. Within one business day following the Effective Date, Dr. Cao shall resign from the Board. Dr. Cao, Mr. Kuhns, Mr. Hochman, Mr. Outerbridge and Mr. Dixon shall be collectively referred to in this Agreement as the “Departing Directors”. The Company hereby agrees to pay to the Departing Directors in the ordinary course any accrued and unpaid director’s fees through the date of the EGM. The Board members listed above agree to vote in favor of any resolutions necessary to achieve the agreed upon Board composition.

The Company

Senior Management

2

3

Vicis

Notwithstanding anything to the contrary contained herein, nothing in the foregoing clauses (a) - (e) above will restrict the manner in which any director affiliated with Vicis may (1) vote on any matter submitted for consideration by the Board or the shareholders of the Company, (2) participate in deliberations or discussions of the Board (including making suggestions or raising issues to the Board) in their capacity as members of the Board, or (3) take any other actions that will allow them to exercise their fiduciary duties and obligations as directors of the Company.

8. Preemptive Rights. Vicis and each member of the Shareholder Group shall have the right to participate pro rata in any sale of equity securities by the Company during the Vicis Standstill Period, for so long as such party shall beneficially own fifteen percent (15%) or more of the outstanding Ordinary Shares (directly or indirectly, including through ownership of ADSs); provided that such pre-emptive right shall not apply to the sale of equity securities (i) issued in connection with a business combination involving the Company, including by merger, consolidation, stock purchase or otherwise, (ii) issued in connection with an underwritten registered public offering under the Securities Act of 1933, (iii) issued in connection with a Rule 144A offering led by an investment bank or (iv) to officers, directors and employees of the

4

Company pursuant to stock grants, option plans, purchase plans and other employee stock incentive programs or arrangements approved by the board of directors, or upon exercise of options or warrants granted to such parties pursuant to any such plan or arrangement.

9. Transition. Each of the Company and the members of the Shareholder Group, Vicis, the current Board and Senior Management shall cooperate to smoothly transition governance of the Company to the new Board, including without limitation, (a) preservation and transfer of all corporate documents, (b) transfer of control of the bank accounts (and all account information) and replacement of authorized signatories, (c) resignations and appointments of board members and/or legal representatives of the Company’s Subsidiaries, (d) disclosure, unwinding and termination of all the related party contracts, which shall include without limitation, the office lease agreements in the U.S. and China between the Company and parties related to John Kuhns, and any other agreements between the Company or its Subsidiaries on the one hand, and Senior Management or parties related to Senior Management on the other hand, all as determined in good faith by the new Board, (e) furnishing information relating to all existing and past business discussions with any third party that is not currently disclosed and (f) all such other matters with respect to the transition of the business reasonably requested by the new Board.

10. Further Assurance. Each of the Company and the members of the Shareholder Group, Vicis, the current Board and the Senior Management agree to co-operate, perform all such further acts and things and execute and deliver all such other agreements, instruments and documents as reasonably necessary to implement each of the items agreed in this Agreement.

11. Mutual Release. (i) the Company, Senior Management, Departing Directors and Vicis (on behalf of themselves and each of their officers, directors, partners, shareholders, employees, agents and affiliates) shall forever fully release, discharge and hold harmless each member of the Shareholder Group (and each of their respective officers, directors, partners, shareholders, employees, agents and affiliates, solely in their capacities as such), and (ii) the Company and each member of the Shareholder Group (on behalf of itself and each of its officers and directors) shall forever fully release, discharge and hold harmless Senior Management, Departing Directors, and Vicis (and each of their officers, directors, partners, shareholders, employees, agents and affiliates, solely in their capacities as such), in each case from and against any and all known or unknown, present or future, fixed or contingent claims of any nature whatsoever arising out of actions, events or omissions occurring on or prior to the Effective Date and which relate, directly or indirectly, to the Company, any investments in the Company, any such person’s services, compensation or benefits while affiliated with the Company, or any payments by the Company to any such person released pursuant to this Section 11 (and specifically excluding for the sake of clarity any obligations of the parties arising out of this Agreement) (collectively, “Claims”). Notwithstanding the foregoing, Claims against any party (and, as applicable, such party’s officers, directors, partners, shareholders, employees, agents and affiliates, solely in their capacities as such) set forth above in this Section 11 shall not be released pursuant to this Agreement or otherwise unless such party is signatory to this Agreement.

12. Governing Law. This agreement is governed by New York law and all legal proceedings regarding its terms, the parties rights hereunder, or any alleged breach, shall be brought exclusively in New York County, New York, with each party agreeing to consent to personal jurisdiction, to waive any defense of inconvenient forum, to accept service of process via first

5

class mail and Federal Express and further agreeing to waive trial by jury. Each of the parties hereto agrees that, in the event of a breach or threatened breach of this Agreement by any other party, the other parties shall be entitled, in addition to any other remedies to which they may be entitled at law, to equitable relief, including a right to rescind or set aside agreements executed or actions taken in violation of this Agreement, and an injunction or injunctions, to prevent any breaches and to enforce specifically this Agreement’s terms and provisions. In the event of litigation concerning this Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and expenses.

6

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

If you are in agreement, please sign this signature page.

CHC Settlement Agreement

ANNEX A

Shareholder Group

CHC Settlement Agreement