Tata Power, incorporated in 1919, is principally engaged in the business of generation, transmission and distribution of electricity. Tata Power is the largest private company in the Indian power sector, with an asset base of about US$1.5 billion and revenues of around $800 million, as of March 31, 2002. Tata Power has a license to generate, transmit and distribute thermal and hydroelectric power to bulk and retail consumers in its Mumbai (the capital city of the state of Maharashtra and a major business/ industrial hub in India) service area.

PGCIL, the Central Transmission Utility, is the sole investment vehicle and operating agency of the GoI in the inter-state electricity transmission sector. PGCIL is involved in the planning, construction and maintenance of high voltage inter-state electricity networks connecting large generating stations and main load centers. With a vast network of over 40,000 circuit-kms spanning the entire country, PGCIL wheels over 40% of the entire power generated in India. As of March 31, 2002, PGCIL had an asset base of approximately $3.5 billion and revenues of around $500 million.

The total project cost is estimated at about $254 million. The proposed IFC investment is a $62 million A Loan for IFC’s own account.

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

* These investment figures are indicative

The project company is to be headquartered in Delhi. The line extends for approximately 1,200 km from Siliguri, in West Bengal, to Mandaula, near New Delhi. The transmission line will pass through the following districts in the states of West Bengal, Bihar and Uttar Pradesh: Darjeeling, Uttar Dinajpur, Kishanganj, Purnia, Madhepura, Gopalganj, Muzaffarapur, Deoria, Gorakhpur, Kabil Nagar, Basti, Faizabad, Bara Banki, Lucknow, Unnao, Hardoi, Shajahanpur, Bareilly, Rampur, Moradabad and Ghaziabad.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The following potential environment and social impacts of the project have been considered: 
- Acquisition and maintenance of transmission line right-of-way and its impact on human livelihoods including physical resettlement, sites of cultural significance, and forests or other natural habitats and wildlife;
- Siting and construction of towers including the reclamation of construction sites, lay-down areas and access roads; - Public disclosure and consultation;
- Worker health and safety;
- The use of PCB-containing materials in the electrical transmission network; and
- Monitoring and management of both contractor and operator environmental health and safety performance.
Location of environmental documents In locally affected community
The environmental documents will be made available at the following locations:

1) Power Grid Corporation of India Ltd,
Siliguri Division, Vidyut Nagar,
Post: Satellite Towenship,
Dist. Jalpaiguri, West Bengal – 734 218

2) Power Grid Corporation of India Ltd,
320/2, Prem Nagar, (Opp. Dainik Divya Prakash Press),
Bareilly (UP) – 243 005

3) Power Grid Corporation of India Ltd,
Joint Venture Group, 6th Floor,
Plot No: 2, Sector 29, Gurgaon – 122001,
Haryana

4) Power Grid Corporation of India Ltd,
B-1/30, Sector – A, Aliganj (Lucknow) – 226 024 (UP)

5) Power Grid Corporation of India Ltd,
Mandola Substation, 400/220 kV S/S, Nanu, Mandola,
Loni Baghpat Road, Dist. Ghaziabad (UP) 210 102

6) Power Grid Corporation of India Ltd,
Siliguri Division, Vidyut Nagar,
Post: Satellite Towenship,
Dist. Jalpaiguri, West Bengal – 734 218

Through this project, IFC is demonstrating its continued support for the development of India’s power sector, promoting sustainable development through growth of private power projects, with synergies in the rest of the economy. This project supports the expansion and upgrade of transmission links between power surplus East and Northeast India and the power deficit North India, and meets a long overdue need for a high capacity transmission link between the two regions. The project also facilitates evacuation of hydropower from Bhutan and contributes not only to reducing power shortages in India, but also to the economy of Bhutan.

Improved transmission capacity between the two regions will facilitate trading of power and enhance competition in the generation sector, which could lead to potentially lower energy costs for the end consumers. Improved electricity transmission and greater availability of power are also likely to support investments in other sectors, thereby promoting economic growth. The successful implementation of this first, private sector transmission project may act as a model for the much-needed private investment in the country’s transmission sector.

IFC would be providing TDTL with access to long-term finance in local currency, which will strengthen the financial viability of the company and the stability of the transmission tariff over the life of the project. Additionally, the private sector’s participation of transmission services is a pioneering activity in emerging markets with few sponsors pursuing investment opportunities, and with few financial institutions having the experience and ability to structure these transactions. This is IFC’s investment in the first private sector transmission project in India. By supporting the project, IFC expects to share its global experience in this sector with the sponsors and other Indian financial institutions, and encourage greater involvement and investment in the Indian transmission sector.