Balrampur II

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	25819
Company name	Balrampur Chini Mills Ltd.
Country	India
Sector	Food & Beverages
Environmental category	B
Department	Agribusiness
Status	Active

Date SPI disclosed	February 27, 2007
Projected board date	March 29, 2007
Previous Events	Invested: June 4, 2007 Signed: April 18, 2007 Approved: April 5, 2007

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

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

Balrampur Chini Mills Limited (BCML or the company), an existing IFC client, is one of the largest integrated sugar producers in India. The company’s main business is manufacturing and marketing of sugar and it also generates revenues from the byproducts including ethanol (from molasses) and power generation (from bagasse).

BCML plans to capitalize on its financial and operational strengths to further expand its production capacity in sugar and byproducts such as power. The proposed project includes:

- an integrated greenfield 8,000 TCD sugar mill and associated 31MW co-generation plant in Gulharia in the state of Uttar Pradesh (UP),
- an integrated greenfield 8,000 TCD sugar mill and associated 20MW co-generation plant in Kumbhi in UP,
- modernization and expansion of co-generation capacity at Rauzagaon plant, and other corporate expansions.

Anticipated development impact of the project

The project is expected to have the following development impacts:

- Supporting a large number of small farmers through purchasing raw materials;
- Reducing poverty in one of the poorest regions in India;
- Contributing to rural development by boosting local economy and community outreach;
- Enhancing the productivity and competitiveness of the private sector in rural areas; and
- Creating new employment within the company and along the supply chain;
- Supply electricity to the area in shortage of power supply through cogeneration using bagasse as a source of renewable energy.

IFC's expected development contribution

IFC’s role includes:

- supporting an existing client;
- providing long-term debt not easily available in the local market;
- guiding the company in implementing an Environmental and Social Management system to improve its environmental and social performance and enhancing its long-term sustainability.

Environmental and social issues - Category B

This is a category B project according to IFC's environmental and social review procedure. The review of this project consisted of appraising technical, environmental and social information submitted by the project company. The appraisal team interviewed the site operations managers including managers with responsibility for management of EHS aspects. Further, the appraisal included sites visits to the company’s existing plants at Balrampur, Haidergarh, Rauzagaon and project sites at Kumbhi and Guleria in the state of Uttar Pradesh, India. The following potential environment, health and safety and social aspect of the project were analyzed:

- Social and Environment assessment and environmental, social, and health and safety management systems; Labor and working conditions;
- Pollution prevention and abatement;
- Community health, safety and security; and
- Land acquisition and compensation.

The company has presented plans to address project related social and environmental impacts; and to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the host country laws and regulations and IFC’s social and environment policies and performance standards and the environmental, health and safety guidelines. A discussion on the company’s plans to mitigate/minimize identified social and environmental impacts has been provided in the Environmental and Social Review Summary (ESRS) and an Environmental and Social Action Plan (ESAP).

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