OCL India Ltd.

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	24668
Company name	OCL India Limited
Country	India
Sector	Nonmetallic Mineral Product Manufacturing
Environmental category	B
Department	Global Manufacturing & Services
Status	Active

Date SPI disclosed	September 7, 2006
Projected board date	October 9, 2006
Previous Events	Invested: July 3, 2007 Signed: May 4, 2007 Approved: March 19, 2007

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The $170 million project is sponsored by OCL India Limited (OCL), one of the leading cement producers in eastern India with an existing cement production capacity of 1.85 million tons per annum (MTPA). The project involves the construction and operation of:

- A new kiln line of 4,000 tons per day (tpd) clinker production capacity at OCL’s existing cement plant site in Rajgangpur, District Sundergarh, Orissa State; and
- A stand alone cement grinding unit of 900,000 TPA (150 tons per hour (tph)) nominal capacity at Kapilas, District Cuttack, Orissa State.

Anticipated development impact of the project

The project will create new jobs in the state of Orissa, one of the poorest states in India with per capita GDP of only $168 (2004) against a national average of $594 (2004). It will expand the supply of cement in the eastern region where at present the capacity utilization rate is very high and this has lead to high prices. The expansion will permit OCL to become a larger and even more competitive producer in the region and help keep cement prices at reasonable levels; and in this way promote investments in infrastructure, and in industrial, commercial and residential construction.
Also, the project will contribute to the modernization of the local cement industry through the introduction of advanced production technology and know-how through local staff training by leading equipment manufacturers, contractors and experienced project managers.

IFC's expected development contribution

IFC will play a key role in this project. It will provide much-needed long-term financing, which is not easily available in the market today. Also, it will play a developmental role by ensuring that the project meets World Bank environmental, social and safety guidelines.

Environmental and social issues - Category B

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 which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The environment, health and safety and social aspect of the project that were analyzed included:

- environment and social assessment;
- corporate environmental, social, and health and safety management systems;
- national and local government permitting requirements;
- land acquisition, compensation and physical and/or economic resettlement;
- management of cultural property; land-use change impact;
- management of resource consumption including sources of power and energy, fuel storage and source and volumes of water consumed including efforts to minimize water use;
- management of emissions and discharges including emissions to air, recycling and treatment of process effluent and domestic waste water, ambient air quality and noise; management of hazardous material, hazardous and other wastes;
- community environment, health and safety during both construction and operation;
- fire and life safety and emergency response; and
- occupational health and safety during construction and operation.

The company has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. A discussion on the company’s plans to mitigate/minimize identified environmental and social impacts has been provided in the Environmental and Social Review Summary (ESRS) and an Environmental and Social Action Plan (ESAP). The company has publicly disclosed the ESRS and the ESAP in a manner and at locations specified later in this document.

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