SGEL is promoted by Mr. M. Komaraiah and family (“Sponsors’). The Sponsors hold 50.10% of SGEL, and the balance is held by IL&FS Energy Development Company Ltd (20%) and Axis Infrastructure Fund 1 (29.90%).

IFC will provide up to $15 million in corporate equity financing to the Company to finance its pipeline projects and up to $15 million in project debt financing in the form of IFC ‘A’ Loan to RPL for the 2x23MW biomass projects. The tenor of the ‘A’ loan will be up to 12 years with a grace period of 3 years. The IFC Post-2012 Carbon Facility (the “Facility”) proposes to forward purchase up to 3 million Certified Emission Reductions (“CER”) to be generated through 2020 and SGEL’s renewable energy projects. SGEL will receive from IFC a pre-determined percentage of the CER spot price at the time of delivery, subject a floor and a cap. IFC will on-deliver CERs delivered by SGEL to the participants in the Facility on a pro-rata basis.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity	15.0

* These investment figures are indicative

SGEL’s existing projects are located in the states of Andhra Pradesh, Maharashtra and Karnataka. SGEL’s pipeline projects are located in Madhya Pradesh, Orissa, Jharkhand and Chhatisgarh. The two new biomass plants to be developed under RPL will be in the states of Jharkhand and Orissa.

Increase power generation: The Indian power market is characterized by significant supply deficit which is expected to continue in the medium term. India's regulatory environment is increasingly supportive of renewable energy. Through this investment, IFC supports a company which will add approximately 200MW of renewable energy generation capacity over the next 3-4 years to meet the growing electricity demand in India. Climate Change Impact: The Project helps mitigate negative climate change impacts by helping avoid GHG emissions - IFC estimates a reduction of approximately 227,000 tCO2eq/year attributable to IFC's investment alone. Private Sector Development: 80% of power generation in India is still state-owned, with all major players focused on large thermal and hydro power projects. In line with its mandate, IFC's participation in this Project will help stimulate private sector development within the renewable energy generation sector. Development of Low Income States (LIS): The entire pipeline of SGEL's projects is in the LIS (Madhya Pradesh, Orissa, Jharkhand and Chattisgarh). SGEL's projects create employment opportunities and stimulate the development of the rural economy. Employment Generation: The Project creates employment opportunities during project identification, construction and operation. Significant employment is created during operations by biomass traders supplying fuel to the various plants of the Company and its subsidiaries.

The Project directly addresses the World Bank Group's climate change objectives by stimulating investments in renewable energy projects. IFC's participation in the Project will demonstrate that small renewable energy projects provide attractive investment opportunities which will in turn facilitate attracting capital to the renewables sector in India. In addition, IFC's participation will provide a "stamp of approval" to the Company and facilitate its current and future fund raising. IFC has been involved in several biomass and renewable energy projects across geographies. The Company will be able to leverage IFC's large global knowledge pool to scale up its business and build up a sizeable portfolio of renewable energy assets. IFC's Performance Standards will enable the Company to achieve higher environmental and social standards. In particular, IFC will utilize its global expertise and experience to help the Company develop environmentally acceptable solutions in dealing with the use of Municipal Solid Waste (MSW) in some of the Company's power plants. IFC's involvement will also help the Company to strengthen corporate governance and internal audit processes.

This is a Category B project according IFC’s Procedure for Environmental and Social Review of Projects.

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; 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.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project are provided in the IFC Environmental & Social Review Summary and Environmental & Social Action Plan.