IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS1 - Social and Environmental Assessment and Management System; PS2 - Labor and Working Conditions; PS3 - Pollution Prevention and Abatement; and PS4 - Community Health, Safety and Security As the land required for all the existing and proposed facilities is acquired through willing buyer willing seller basis, PS5 - land acquisition and involuntary resettlement in not applicable. The operational projects’ sites are located in semi-urban / rural areas that are well connected by existing road networks, and none of the SGEL project sites (including proposed projects) are located in or near national/provincial/local designated conservation areas. The biomass fuel used in all the power plants primarily comprises of agro-waste and does not include any biomass sourced from natural forests or plantations. The impacts on biodiversity will therefore be limited and hence PS6: Biodiversity Conservation and Sustainable Natural Resource Management does not apply. No indigenous peoples are/will be affected by SGEL projects and there are/will be no impacts on any cultural heritage resources. Hence, PS7: Indigenous Peoples and PS8: Cultural Heritage do not apply.

Key environmental and social (E&S) issues associated with this investment include the capacity of the Company to: establish and maintain corporate level E&S assessment and management system; establish and maintain corporate human resource policies and procedures; manage worker health and safety both during construction and operating phases of all projects operational phase; ensure compliance and sound labor and safety management by contractors; sourcing and transportation of fuel for biomass projects; fire risks associated with storage of biomass fuel; manage waste discharges and air emissions from the power plant operations (especially for MSW-based power plants); and ensure health, safety and security of the communities directly affected by the construction and operation of its projects. The Project will result in a limited number of potentially adverse environmental and social impacts which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. This investment is therefore categorized as B.

The Company has presented plans to address the environmental and social impacts to ensure that the Company will, upon implementation of the specific agreed measures, comply with the environmental and social requirements including: the host country laws and regulations; IFC’s Performance Standards and IFC’s applicable EHS Guidelines. The information about how these potential impacts will be addressed by the Company is summarized in the paragraphs that follow. In addition, web links to the publicly disclosed CDM project documentation on UNFCCC site are also provided as a supplement to this Review Summary. PS1: Social and Environmental Assessment and Management Systems: - Environmental and Social Assessment: SGEL has a formal process of site selection for all its new developments, which takes into account guidelines of Ministry of Environment and Forests; availability of biomass fuel, water and grid connectivity for evacuation of the power. SGEL conducts formal E&S impact assessment studies for each project, including public consultation, as a part of regulatory approval process and/or the CDM registration process. Going forward, these assessments will identify appropriate controls to be put in place for the Company’s proposed projects in order to comply with IFC’s Performance Standards. All of the SGEL biomass power projects are designed to use a variety of biomass fuels along with a legal allocation of up to 15% coal as needed. Biomass resources that are procured as part of the fuel mix include, rice husk, cotton stalks, ground nut shells, saw dust, soy husk, wheat husk, corn/maize cobs, paddy straw, coconut shell and husk, and small amounts of other agricultural residues. SGEL has developed a robust supply chain for biomass fuel in the vicinity of all its operational plants comprising of a network of aggregators who in-turn work with the rice mills and/or other agro-processing facilities. The aggregators purchase the rice husk from the mills or other agriculture waste from farmers or respective agro-processing facilities; which results in additional revenues for the local farmers, rice mills, agro-processors and thus ultimately the local communities. To supplement the biomass fuel, as mentioned earlier, the Company is implementing a pilot project at one of its operating power plants in Sultanabad near Karimnagar in Andhra Pradesh, where it is using refuse derived fuel (RDF) made from limited processing and separation of municipal solid waste (MSW) into a non-pelletized fluff. As the biomass fuel mix for SGEL comprises of primarily the agricultural waste (which has no other use) or municipal solid waste; SGEL’s supply chain does not have any impact on food security – for humans as well as animals. - Management Program: SGEL’s operating power plants are ISO 9001 certified and as a company policy, all the future plants will also achieve ISO9001 certification. In order to ensure uniform E&S standards across its operations; SGEL has agreed to implement a corporate-wide certified environmental and social management system of international standards. Within this E&S management system, the Company will adopt IFC’s Performance Standards as part of legal and other requirements that apply to all future activities. The ESMS will reflect adoption of these standards, and will include appropriate internal reference documents, procedures, and work instructions. When combined with the findings of the project-specific assessments, these documents will comprise a program of mitigation and performance improvement measures and actions necessary to effectively manage the E&S risks and impacts of proposed projects. SGEL works with a set of transport and construction contractors in its day-to-day operations. In order to ensure sound EHS management during project construction, SGEL will develop a standard format of EHS related clauses to be included in all the future construction contracts – including that for the new projects at Sundergarh and Ranchi. With this, SGEL will require the contractors to develop project specific environmental and social management plans (ESMP) to ensure compliance with environmental and social regulatory requirements and mitigation measures identified in the EIA – including workplace safety. The ESMP will be consistent with the IFC General EHS Guidelines, including the specific sections on environment, occupational health and safety, and community health and safety applicable to the construction phase. - Organization: Currently all site/plant specific E&S and safety issues are handled by the respective plant managers. However, as a part of corporate level management systems, SGEL has recently recruited dedicated staff at the corporate level responsible for managing EHS issues across all its operations. This corporate resource will have overall responsibility for strategies, policies, standards, compliance, and management initiatives related to environmental and social matters, and for ensuring adequate resources are made available to the technical team at each facility for managing EHS issues. Finally, corporate staff will be responsible for training of all the SGEL staff and contractor’s staff on E&S, as well as workplace safety aspects. - Monitoring and Reporting: SGEL has a monitoring and reporting system related to E&S parameters in accordance with the local regulations. However, as a part of its management system SGEL plans to consolidate its monitoring and reporting system at corporate level, covering all existing facilities and proposed projects. For this purpose, SGEL shall review its existing reporting mechanism vis-à-vis the requirements of the IFC Performance Standards, EHS Guidelines and reporting requirements and make necessary changes to the monitoring and reporting procedures to comply with IFC requirements. PS2: Labor and Working Conditions: - Working Conditions and Management of Worker Relationship: SGEL and its subsidiaries employ 108 staff at corporate office in Hyderabad, and 517 (permanent) + 260 (contract workers) at sites. Typically, SGEL employs around 130-140 persons (comprising around 70-80 regular staff and 50-60 temporary staff on needs basis) at each of its biomass projects. SGEL has developed a manual documenting the HR policies and procedures, which are in line with the local regulations and IFC PS2 requirements, and covers issues ranging from terms of employment, non-discrimination and equal opportunity, to grievance mechanisms. - Construction Labor Living and Working Conditions: In order to ensure compliance with labor laws including requirements for living and working conditions for contract construction labor, SGEL will develop a standard format of related clauses to be included in all the future contracts. With this, SGEL will require the contractors to comply with local labor laws as well as IFC PS2 requirements. In additional, SGEL will implement a formal and documented procedure for monitoring, by its own staff, the compliance by all the contractors on various contract clauses related to labor laws, occupational health and safety, provision and use of personal protective equipment (PPE) and living conditions of construction workers. - Occupational Health and Safety (OHS): To date, there has been no fatal / major reportable accident at any of SGEL facilities– during construction or operations. However, going forward, SGEL plans to proactively and systematically manage OHS across all its facilities and sites - both during construction and operational phases. For the construction phase, necessary construction safety procedures and practices (such as fall prevention barriers, safety signage, color coding of uniforms) shall be implemented at site . While the contractors would be responsible for these and the general safety of their workforce (including provision of PPE) together with the on-site labor camps, as a part of ESAP SGEL will ensure the adequacy of these provisions – through contract clauses as well as regular supervisions, in accordance with IFC PSs. PS3: Pollution Prevention and Abatement: - Management of Resources including Energy and Water: The construction and operation of the project will not require the use of significant quantities of energy, or hazardous materials. None-the-less, the Company has commissioned consultants to identify energy conservation opportunities – primarily by reducing auxiliary consumption in its operational power plants. The consultants’ report has identified opportunities for improving energy efficiency by way of: variable frequency drives for the motors, preheating by flue gases, process modifications such as heat exchangers, installation of oxygen analyzer etc. SGEL is planning to implement these suggestions progressively across all its power plants. - Management of emissions and discharges: The emissions and discharges related to project construction activities will be managed according to mitigation measures recommended by the environmental assessment process and suggested in the environmental permit conditions. For all its operational and upcoming biomass power plants, SGEL has adopted one of the 3 basic technology choices for the biomass boiler: moving grate, pusher grate, and circulating fluidized bed. Air cooled condensers have been adopted for reduction in water consumption – especially in the arid zones. The monitoring records for each of the operational biomass power demonstrate that the emissions from all the SGEL plants are within the local regulatory limit as well as IFC’s relevant EHS guidelines. During the operational phase, emissions generated by biomass boilers will be processed through appropriate air pollution control equipment such as electrostatic precipitators (ESP) so that they meet the local regulatory as well as IFC guidelines on emission limits. Regular ambient air quality monitoring and stack emission monitoring is carried out by SGEL through external testing agencies. In addition, air emissions are monitored once every year by the local pollution control board. SGEL plans to progressively install on-line air pollution monitoring system for stack emissions in near future. For its ongoing pilot project SGEL processes MSW at the processing facility in Karimnagar, and the RDF thus produced is mixed in small quantities with the biomass fuel at the power plant in Sultanabad. SGEL has agreed to undertake, in a phased manner, a supplementary assessment of the technical design, and operational performance of the MSW processing equipment, boilers and air pollution control equipment to benchmark its performance vis-à-vis local regulatory requirements as well as international best practices; including IFC PSs and EHS Guidelines. This supplementary study will also assess the financial viability of the MSW projects, including financial costs of environmental control requirements (both solid waste processing and air emission) to ensure compliance with IFC PSs and EHS guidelines. Based on the outcomes of this study, SGEL will develop and implement specific and time-bound action plans to ensure the compliance of the power plant and processing facility with relevant IFC ‘s PS requirements and relevant EHS guidelines. Lessons learned from this exercise will feed in decision making on SGEL’s future plans around MSW based power plants (including extension/termination of MoU for solid waste management with the local municipal authorities). - Solid and Hazardous Waste Management: Fly ash and bottom ash will be the primary solid waste generated from the biomass power plants, which is sold to the nearby brick manufacturing industry. Waste lubricants and other potentially hazardous materials generated in small quantities are managed by licensed transport contractors and disposed of in licensed facilities. SGEL will review, and upgrade as necessary, the waste storage facilities to ensure that the hazardous waste is stored in closed containers and placed in a specially designed area with impermeable flooring and protection against the elements, accessible only to authorized persons. - Ambient Noise: The primary impact of noise is expected during the construction phase, including noise from heavy trucks transporting materials to construction sites. No significant noise levels are expected during project operations phase. For its existing operations, SGEL engages external testing agencies to monitor noise levels, in addition to the annual monitoring by local pollution control board. Monitoring records for the existing facilities confirm that the noise levels are well within the stipulated limits. - Greenhouse Gases (GHG): SGEL operates only renewable energy facilities and hence, all projects are expected to result in positive impact with regard to GHG emissions – when compared with coal fired power plants. For the existing assets and active pipeline with a total power generation capacity of 140 MW through IFC investment, SGEL expects to abate about 151,900 tCO2eq/year attributable to the equity component and 204,700 tCO2eq/year attributable to the debt component of the investment when compared with the coal fired power plants. PS4 – Community Health, Safety and Security: In view of the small and clean nature of SGEL operations, and that the projects are located in the sparsely populated rural areas; health, safety and security impacts on nearby communities are expected to be minimal. Truck traffic to the project sites (primarily for supply of biomass) is expected to be limited, and hence does not pose major safety risks for the nearby communities. Storage of biomass may result in fire risk. For this purpose, SGEL is in the process of upgrading its fire fighting systems in storage areas across all facilities. For this, it will complete the needs assessment for improvements in fire safety systems by March 2011, which would then be implemented across all the facilities by December 2012. Moreover, SGEL will formalize its system of conducting regular fire-drills and fire safety training for its staff. In addition, SGEL has developed a standard template for On-site Emergency Preparedness Plan, based on the analysis of potential hazards and articulates necessary emergency response measures. This is now being customized for each of its biomass power plants, respectively.

As a part of the CDM registration and/or EIA process for its biomass projects, SGEL conducts a formal and documented public hearing in the local community. This provides an excellent opportunity for the Company to engage with the community, disclose the E&S aspects of its projects and hear about their concerns and grievances. Going forward too, SGEL will conduct similar public hearings for its upcoming projects. Moreover, SGEL has agreed to develop and implement a formal grievance mechanism for construction and operational phases as well as plans for community communication and engagement during operation phase. The Company’s public disclosure of the EIA report, as well as by disclosure of the key operational parameters for the project (such as air emissions) to the nearby community, will be a key aspect of this community disclosure and engagement process. As a part of its corporate social responsibility activities, SGEL has been actively engaging with the neighboring communities through its Corporate Social Responsibility (CSR) related programs. In the past, for its operational biomass projects, several activities have been organized for the nearby communities, such as: assisting the village schools, renovation of the local government building in the village, water supply for villages and tree plantation.

The Company will disclose this ESRS and the ESAP at the following addresses: Shalivahana Green Energy Ltd. Address 7th Floor, Minerva Complex, 94, S.D.Road, Secunderabad – 500 003. Tel: +91-40-2784 6420 / 66387721 Fax: +91-40-6631 0072 Email: shalivahanaprojects@yahoo.com And on its website: www.www.shalivahanagroup.com Enquiries and/or comments about the Project may be directed to: Mr. I Raja Babu Shalivahana Green Energy Ltd. Address 7th Floor, Minerva Complex, 94, S.D.Road, Secunderabad – 500 003. Tel: +91-40-2784 6420 / 66387721 Fax: +91-40-6631 0072 Email: shalivahanaprojects@yahoo.com Links to all PDDs on CDM websites:Mancherial Power Plant   http://cdm.unfccc.int/Projects/DB/DNV-CUK1157919687.29/view (Project no 0591) Konark Power Plant    http://cdm.unfccc.int/Projects/DB/TUEV-RHEIN1170156110.38/view (Project no 0914) Yawatmal Power Plant   http://cdm.unfccc.int/Projects/DB/TUEV-SUED1197621125.76/view (Project no 1473)