ENN Solar Energy Co. Limited

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	27041
Company name	ENN Solar Energy Co., Ltd
Country	China
Sector	Industrial & Consumer Products
Environmental category	B
Department	Global Manufacturing & Services
Status	Pending Disbursement

Date SPI disclosed	July 16, 2008
Projected board date	August 25, 2008
Previous Events	Signed: October 9, 2008 Approved: September 5, 2008

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

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The scope of the XinAo Solar project comprises of the greenfield construction, installation, commissioning and operation of a tandem junction thin film line to be supplied by Applied Materials capable of producing 60 MWp of amorphous silicon solar photovoltaic modules. The project will be implemented in a purpose-built greenfield facility in the Langfang Economic & Technical Development Zone in Langfang, Hebei Province, south-east of Beijing. The project is the first phase of the XinAo Group’s three-step strategic plan to build its photovoltaic thin film business.

Anticipated development impact of the project

The project is expected to have the following development impact:

- CO2 .emission reduction.

There are no carbon emissions associated with the production of electricity from the operation of solar energy plants. Once fully operational, the project should produce each year solar panels rated at 60MWp, which should reduce CO2 by an estimated 1.5 million tons over a 25-year panel life.

- Employment creation.

The project will provide significant permanent employment opportunities for highly-skilled labor and is expected to create 130 permanent jobs.

- Change in regulatory framework in China for solar energy.

The project aims to support the development of a regulatory framework for solar energy as a key source of renewable energy in China.

IFC's expected development contribution

IFC has three roles to play in this project:

- IFC industry expertise and credibility raising capital.

IFC is one of the world's leading financial institutions in funding the solar industry, providing finance to XinAo Solar and other solar PV manufacturers and consumers.

- IFC appraisal feedback.

IFC’s industry expert and industry consultant engaged with the company’s operational and financial management teams to assess the solar market and determine appropriate assumptions.

- Structuring.

IFC would work through its relationship with the B Loan participants to create a viable financing structure for the project.

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. Key environmental, health and safety, human resources and social issues that were reviewed included the following:

- Environmental and social management system;
- Quality and sustainability of water resources;
- Emissions to the environment – air, water and subsurface;
- Solid and hazardous materials management, including transportation, handling and storage of silane and other potentially hazardous gases;
- Life and fire safety;
- Community and occupational health and safety;
- Energy use and efficiency; and Community engagement.

XinAo Solar has presented specific plans to address key issues and gaps to ensure compliance with local regulatory requirements as well as consistency with IFC Performance Standards and applicable sections of environmental, health and safety guidelines, during the construction phase and when the plant is operational. Additionally, XinAo Solar’s technology provides a significant positive impact on global climate change and its operations create jobs and opportunities for local communities, with no adverse social impacts. An Environmental and Social Impact Assessment was completed in December 2007, which has since been approved by the local government without any requirement for ameliorative measures or remedial actions.

IFC PROJECTS