LNJ Bhilwara (LNJ) is a diversified industrial group with interests in textiles, graphite electrodes, sponge iron, power generation and information technology. Founded in 1959, the group is comprised of eleven companies (excluding ADPCL), concentrated in the States of Rajasthan, Madhya Pradesh, Uttar Pradesh and Himachal Pradesh. For the year ending March 2003, group sales were $360 million, resulting in $13 million of net income. The sponsors have undertaken two other hydro-electric power projects to date with success: the 86MW Malana HPP in Himachal Pradesh and the 13MW Tawa HPP in Madhya Pradesh.

RSWM was established in 1959 and is the flagship company of LNJ Bhilwara group, and is India’s largest producer and exporter of polyester/viscose yarns and is one of India’s five largest textile houses. Turnover for the year ending March 2003 was $102 million, of which 33% was exported.

HEG was established in 1977 by RSWM in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie, a subsidiary of Pechiney. HEG’s principal products are graphite electrodes, sponge iron and power generation. Turnover for the year ending March 2003 was $121 million, of which 53% was exported.

MPCL was commissioned in 2001 and is a 86MW run-of-the-river hydro-electric power plant located in the Kullu District of Himachal Pradesh. At a 90% dependable year, MPCL is expected to provide 370GWh of power to the Northern grid on an annual basis. The company is currently operating on a merchant basis with a very good collection record.

Both HEG and RSWM are publicly listed companies in India.

The total project cost is estimated to be $192 million, of which IFC is expected to contribute $45 million through a combination of an A Loan and a C Loan.

47.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
Equity	7.0

* These investment figures are indicative

ADPCL will be located near Pirni, in the Kullu District of Himachal Pradesh. The project site lies east of the Beas River and extends within the villages of Pirni, Hamta and Jagatsukh. The areas are sparsely populated due to the high elevation and steep slopes. In addition to project roads, the construction of ADPCL will contribute bridges and paved roads to the surrounding community. While ADPCL will maintain staff at the project site, the company will be headquartered in Delhi (Noida), India.

The setting for the project is the steep terrain of the Himalayas, in the Kullu Valley of India’s Himachal Pradesh State. Implementation of the project requires diversion of a portion of the flow of the Allain and Duhangan rivers, through tunnels to an underground power house with two 96MW generating units. A small diversion structure on the Allain river will supply water to an off-stream storage reservoir that, together with water storage in both tunnels, will provide sufficient capacity for four hours of peaking generation during dry periods. Short reaches of the Allain and Duhangan rivers will experience reduced flows; environmental studies performed for the project determined minimum flows to be maintained in each river below the two intake structures. Water will be returned to the Allain river through a tail race tunnel. An above ground switchyard and a 185-km transmission line will connect the project to the regional electricity grid.

Environmental, social, health and safety issues associated with this project include: land acquisition and resettlement, fisheries and riverine hydrology, forest conservation, impacts of the influx of a temporary construction work-force, environmental management of construction activities, worker health and safety during project construction and operations phases, labor practices during construction, dam safety, international waterways and the cumulative impacts of river basin development.

ADPCL has prepared a full Environmental and Social Impact Assessment (ESIA) of the project, including a non-technical Executive Summary, a Main Report that consolidates information derived from all ESIA data gathering efforts, a detailed Environmental and Social Management and Monitoring Plan (ESMMP) that specifies what actions ADPCL will take to mitigate adverse impacts, and a compendium of all specialized studies.

Location of environmental documents In locally affected community
Mr. V.P.S. Chauhan
Allain Duhangan Hydroelectric Project
Pirni Village, Manali, Kullu
Himachal Pradesh, India 107 301
Telephone: 91-190-2251798
Fax: 91-190-2251798

Mr. Suyaru Rana
Allain Duhangan Hydroelectric Project
Pirni Village, Manali, Kullu
Himachal Pradesh, India 107 301
Telephone: 91-190-2251798
Fax: 91-190-2251798

Mr. Ashok Joshi
LNJ Bhilwara Group
Bhilwara Towers, A-12, Sector-1
Noida, Delhi, India 201 301
Telephone: 91-120-2545772
Fax: 91-120-2531648

This project is consistent with the WBG’s strategy of promoting private investment in the power sector of India and has the following developmental impacts:

- provide peak power to the Northern grid and thereby meet peak shortages,
- help improve the hydro-thermal mix in the country,
- provide a strong demonstration effect for private merchant hydropower development,
- reduce the need for public investment and allow the government to re-deploy scarce resources to meet poverty alleviation and social development objectives, and
- aid the manufacturing sector by providing competitive and reliable power.