CSAIL, a wholly owned subsidiary of CWE Investment Corporation (“CWEI”) through CWEI Hongkong Investment Company Limited is a holding company for investment in Pakistan under which single purpose vehicles will be formed for the project financing of each of the projects. CWEI is the overseas investment subsidiary of state owned China Three Gorges Corporation (“CTGC”). CTGC is one of the largest power companies in the world that owns and operates several multi-stage hydro, solar and wind generation projects in China and globally, with a cumulative capacity of over 50,000 MW.

Founded in August 2011, CWEI is a wholly owned subsidiary of CTGC and serves as the dedicated overseas investment platform, responsible for investment, construction, operation and management of the international businesses of CTGC. Leveraging on the financial strength and technical capabilities of CTGC, CWEI is pursuing the development of hydro, wind and solar generation projects across South Asia, Southeast Asia, Europe, America and Africa. CWEI is also the largest shareholder in Energias de Portugal (“EDP”), which is an integrated utility company that generates, distributes, and supplies electricity in Portugal and through EDP Renovaives, it is one of the largest wind power producers in the world.

CWEI will maintain a majority 51% equity stake in CSAIL until a Qualified Public Offering and in addition to IFC, other regional and international institutional investors, including development financial institutions, sovereign wealth funds and private equity funds are expected to take minority shareholding in CSAIL.

The total project cost is estimated at US$5.5 billion for CSAIL’s existing multi-stage pipeline of solar, wind and hydro projects in Pakistan with a cumulative capacity of over 2,000 MW. IFC’s proposed investment in CSAIL would be an equity investment of up to US$125 million. IFC may also participate in debt financing at the project company level in subsequent transactions.

125.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	125.0

* These investment figures are indicative

The core scope of the Company’s activities will be in Pakistan. The Company has already identified multi-stage hydro, wind and solar projects with a cumulative capacity of over 2,000MW in various parts of Pakistan.

The project will i) significantly increase Pakistan''s total available power generation capacity by around 17%, to meet more than a third of the current supply deficit, that will in turn contribute to reduction in ongoing prolonged power outages; ii) lay the foundation for private sector participation in development of large scale hydropower projects, leading to 27% increase in power generation from hydropower resources; iii) provide access to electricity to more than 24 million people; iv) utilize indigenous, renewable resources as lower cost alternatives to expensive thermal generation based on imported fuels; v) deliver climate change benefits in terms of increased share of renewable power generation in the overall fuel mix.

IFC''s proposed investment in the project will (i) support the significant investment program of a large and experienced sponsor group in Pakistan''s electricity market that is in considerable need of private sector investment; (ii) seek to leverage IFC''s knowledge and experience in the power sector in Pakistan to support the investment plans of the Company; (iii) allow the Company to develop a robust environmental and social management system, ensuring the implementation of IFC''s Performance Standards, particularly for development of large hydropower projects; (iv) add value in terms of adoption of international corporate governance standards, which will help the Company to list and raise capital from international capital markets; (v) serve as a foundation for a long-term partnership, which provide confidence to other international investors and lenders for future debt mobilization in a challenging market, where long-term, limited or non-recourse debt is not readily available; and (vi) promote South-South investments.

This is a category A project primarily due to the potentially significant and diverse environmental and social impacts and risks associated with some of CSAIL’s prospective business activities in Pakistan, particularly development and operation of large-scale greenfield hydro power projects (e.g. Karot 720 MW and Kohala 1,100 MW on Jhelum River) and wind power projects (e.g. 300MW Third Wind Farm Project in Sindh Province).



The key environmental, health and safety, and social risks and issues associated with this proposed investment include: CSAIL’s environmental and social management system supported by CTGC and CWEI, CSAIL’s commitment and capacity to conduct environmental and social impact assessments for projects under development /to be developed (large scale hydropower projects and wind/solar power projects). IFC’s appraisal considered CSAIL’s environmental and social management system and gaps, if any, between this system and IFC requirements. Where necessary, corrective measures intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and in the agreed Environmental and Social Action Plan (ESAP). Through implementation of this management system and ESAP, CSAIL is expected to operate its facilities in accordance with IFC Performance Standards objectives.



Based on IFC’s understanding of the current portfolio of projects under development by CSAIL, no impacts on indigenous peoples or cultural heritage have been identified and therefore IFC Performance Standards 7 and 8 are not applicable at this stage. Under Performance Standard 1, CSAIL’s assessment of any future projects will include determination of applicability of all of the Performance Standards, including PS7 and 8, and procedures for assessing and managing these impacts if they arise in future projects developed by CSAIL.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.