The Government of India (“GoI”) is the single largest shareholder of POWERGRID, with approximately 69.4% of equity. The Company is listed on the Bombay Stock Exchange and the National Stock Exchange of India. Institutional and Non-Institutional investors hold approximately 30.6% of the total equity in the Company.

The total project cost is estimated to be US$2.3-3.5 billion over the next 12 months proposed to be 70% financed with debt and remaining from internal accruals. IFC financing of upto US$400 million – an A Loan of US$100 million and B Loan of upto US$300 million – is expected to finance approximately 15% of the project cost on corporate finance basis. The balance debt will be raised including from multilaterals namely World Bank and ADB, and through issuance of domestic bonds. The proceeds from IFC is intended for financing transmission projects to be undertaken by POWERGRID and shall not be used for EPC consulting and/or O&M services and/or Joint-venture projects.

100.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity

* These investment figures are indicative

POWERGRID’s capital expenditure program is dispersed across the country focusing both on strengthening the existing system and on expanding the reach of the system.

The key development impacts of the Project are (a) supports increasing investments in the Indian power sector - a critical bottleneck for economic growth and poverty alleviation. In particular, the power transmission sector requires urgent investments to ensure efficient transfer to power from generation to load centers; (b) supports increased private sector investment in the power generation sector by allowing new generation projects to access users across the country due to the development of the National Transmission Grid by POWERGRID ; (c) helps mitigate climate change impacts by supporting development of renewable energy projects which need the National Grid to optimize utilization of the power they produce.

IFC''s key role in this Project is to support POWERGRID''s efforts to diversify their financing sources. While they have traditionally relied on sovereign-backed multilateral sources for financing they have progressively started tapping the Indian capital markets - both for equity and debt. Given their large capital investment requirements and progressively reducing sovereign guarantee support, POWERGRID is now seeking to tap international commercial sources of financing. In this context they seek IFC''s support to help attract international financing, currently not available for long tenors as required for infrastructure financing.

Apart from support for diversifying financing sources POWERGRID is also seeking engagement with IFC to increase their participation in other emerging markets. POWERGRID is a world-class transmission utility with demonstrated expertise in project conceptualization, design and implementation. They would like to take up projects in Asia and Africa to expand their footprint and support from IFC will help them enter these markets.

While POWERGRID’s individual transmission line projects typically have limited social and environmental impact (typically Category B), several of the projects to be implemented by POWERGRID have a large geographical spread, voltages above 400 kV, large substations, and it is reasonable to assume that some of the project transmission lines may pass through forest areas. IFC is treating this investment as a category A project according to IFC’s Procedure for Environmental and Social Review of Projects since some of the projects to be implemented by the Company may result in potentially significant adverse social and environmental impacts. This is consistent with the categorization of the “Fifth Power System Development Project” (# P115566) by The World Bank.