Tata Ultra Mega Coastal Gujarat Power Limited (CGPL or the company) will build, own and operate a 4,000MW (5 units of 800 MW each) ultra mega imported coal and supercritical technology based power plant at the port city of Mundra in the state of Gujarat in India. The project will be the first 800 MW unit size supercritical technology thermal power plant in India and will likely be the most energy efficient coal based thermal power plant in the country. The project, awarded by Indias Ministry of Power through tariff based competitive bidding, is being sponsored by Tata Power Company Limited (Tata Power or the sponsor). It will sell its generation to the utilities of five different states (the procurers) in the power starved regions of western and northern India through a long term 25 year take-or-pay Power Purchase Agreement (PPA). The project will cost about $4.14 billion and will sell power at 25 year levelised tariff of INR2.26 per kWh which is competitive compared to current prices of bulk power in India. The project will source imported coal from mines of Indonesia and other countries and will use the Mundra port facilities (operated by the Adani group of Gujarat) for the project. The main plant equipment is being supplied by Doosan (supercritical boilers) and Toshiba (steam turbine generators). The project is the first private sector power project in India to be based on the energy efficient supercritical technology. The use of this technology in this plant will help reduce the average Green House Gases (GHG) emissions of Indian power plants per unit of electricity generated in the country. Based on the new technology and other measures being taken by the company, the project will meet the IFC social and environmental Performance Standards. This is also IFCs first financing of a supercritical plant anywhere in the world.  The project fits well with the Government of Indias (GoIs) plans of attracting significant investments in the countrys power sector which is facing a huge demand supply gap. India is currently facing enormous demand supply gap of about 11% energy shortage and 14% peak power shortage. This gap is very severe in some states such as Maharashtra which suffer from acute deficit of about 19% energy shortage and 27% peak power shortage. The growing gap in the country could lead to significant impacts on industrial growth and corresponding economic development. It is expected that if India is to sustain its current level of GDP growth of 8  9% per annum, it would need to add about 160,000 MW in generation capacity in the next 10 years. The demand supply gap will also increase as more rural households (currently rural household electrification level of only about 44% in the country) are electrified under the accelerated rural electrification program being currently undertaken by the GoI. Therefore, there is an urgent need to achieve significant generation capacity addition in a short time frame which will help meet the rising electricity demand and lead to economic development of the country. It is expected that large projects of this kind will help reduce the demand supply gap and the economic impact of delays which are encountered by most infrastructure projects in the country. The project will sell power to the states of Gujarat, Rajasthan and Maharashtra in western India and Haryana and Punjab in northern India. All these states currently suffer from energy shortages ranging from 7% to 19% and peak power shortages of about 10% to 30%. The project will play an important role in reducing these gaps with cheap and reliable supply which will also help in improving access to electricity in the country.  - Abatement of GHG emissions:    The project uses supercritical coal technology, which has been approved by CDM-Executive Board as a Clean Development Mechanism for power projects in India. Due to the use of this technology and choice of unit sizes, the thermal efficiency of the project (LHV, gross) will be higher by about 70%, 30% and 20% as compared to the average thermal efficiency (LHV, gross) of coal based power plants in India, across the globe and OECD. Therefore, the project will result in reducing the average carbon emissions of Indias electricity generation system per unit of electricity supply.  IFCs approach towards abatement of climate change impacts includes investment focus on:  - renewable energy including small and/or run of the river hydro, wind and biomass sources; - transmission and distribution to reduce technical losses and improve energy efficiency; - supercritical coal technology, ultra supercritical or subcritical coal technology with energy efficiency higher than existing national average of the sector;  - enhancing access to natural gas based energy including supporting infrastructure like LNG Terminals, and gas transmission and distribution grids;  - improved management of municipal solid waste and waste water systems; and - leveraging Kyoto Mechanisms (Clean Development Mechanism), to enhance the attractiveness of less GHG intensive energy generation and delivery approaches.  Since the most technologically proven method of reducing GHG emissions is improving power plants efficiency, IFC is giving high priority to funding more efficient power projects which will reduce the carbon emissions intensity in the country and reduce the average overall environmental impact of the countrys power generation system. It is expected that India will continue to be dependent on coal to fulfill its power requirements due to limited availability and high pricing of gas, hydro and other renewable sources. Therefore, IFC is supporting thermal power projects which have better GHG and environmental performance than the average plants in India, given the countrys large needs for incremental electricity supply. According to the electricity consumption statistics of the International Energy Agency, India has a very low per capita consumption of electricity at about 437 kWh per annum as compared to its counter part emerging economies of China (about 1528 kWh) and Brazil (about 1941 kWh) and much lower than developed economies of United States (about 12541 kWh) and Japan (about 7701 kWh). The country faces severe shortages of about 11% of energy demand and 14% of peak power demand. The regions of the country where the project will supply its generation are the worst affected by the power crisis with energy shortages ranging from 7% to 19% and peak power shortages ranging from 10% to 30% of demand.  The low availability of power is seriously hampering industrial growth/competitiveness and corresponding economic benefits to the country. Lack of growth in power generation capacity and associated transmission and distribution network is one of the most critical factors for India to sustain its current GDP growth rate. It is expected that India needs to add about 160,000 MW in generation capacity in the next 10 years in order to sustain its current GDP growth rate of about 8  9% per annum. This implies that India needs to more than double its current generation capacity of about 132329 MW in the next 10 years which will require huge efforts and investments from both national and state governments as well as the private sector including international investors. The significance of this target is immense considering that India has been able to add only about 40195 MW in generation capacity in the last 10 years. Large power plants such as the proposed project will play a significant role in achieving the capacity addition targets in the envisaged timeframe and will help the country sustain its growth levels leading to overall economic development of Indias large population.    The project will provide a competitive source of electricity to partly reduce the current power shortages and help meet the growing demand for electricity in the country. Cheap and reliable power from the project will help in improving the competitiveness of Indian manufacturing and services industries which have to often rely on expensive standby diesel generation to fulfill their power needs. Competitively priced power will also improve access to electricity in rural and urban areas of the country while reducing the subsidy burden on state governments. Therefore, the project will have significant impact not only in terms of reducing the prevalent demand supply gap but in reducing the average electricity costs in the country leading to improved access and industrial competitiveness.  The project will have the following additional development impacts:  - Employment:   The project will create an estimated 5000 jobs during construction and 700 jobs during operation. This significant creation of employment will lead to economic benefits in the project area and further development of additional economic activities leading to incremental employment.  - Growth in port and transmission capacity:   The project will source its coal through the Mundra Port which is undergoing a large expansion, a part of which (corresponding to approximately $200 million) will be utilized by the project. The transmission system is also being expanded, at an estimated cost of over $1 billion, to accommodate incremental power from the project. Both these facilities will result in large additional investment in the country and corresponding job creation and economic development.  Growth in transmission capacity will result in strengthening of the inter-state grid system which will enable early development of future power plants which would use these facilities for transmission of their generation to different parts of the country leading to improved access.  - Tax transfers:   The project will make significant tax payments to GoI, estimated at over $350 million over the life of the project. Growth in the associated facilities and imports for the project will lead to significant additional tax and custom duty payments to the government.  - Social and Environmental:   Lack of access to electricity (which is dependent on availability and price) has significant deleterious impacts on health, natural resources and environment. Burden of these impacts is often borne disproportionately by women, children and other vulnerable groups. The project will contribute to enhanced access to electricity through supply of cheap and reliable power.  - Lower GHG emission intensity:   While the total GHG emissions may be high, the GHG emissions per KWh of energy generated from the project will be about 750 gCO2/kWh as compared to 1259 gCO2/kWh (national average India for coal based power plants, 2005), 919 gCO2/kWh (world average for coal based power plants, 2005) and 888 gCO2/kWh (OECD average for coal based power plants, 2005). The project will have a GHG emission intensity which is lower by 40%, 18% and 15% as compared to the average GHG emission intensity of coal based power plants in India, across the globe and OECD.  The project will use about 10.8 million tonnes of coal annual to generate 29,000 million kWh of electricity (net), emitting about 23.4 million tonnes of CO2, based on the imported coal calorific value of 5,750 kcal/kg and 40.5% efficiency (net, HHV) of supercritical technology.  A typical subcritical power plant recently developed in India has generating efficiency of around 35% (net, HHV), and is likely to use 24.1 million tonnes of coal (domestic), emitting 28.8 million tonnes CO2, or 12.5 million tonnes of imported coal, emitting 27 million tonnes CO2, to generate the same amount of electricity.  Assuming both plants use the same imported coal, the project will avoid the burning of 1.7 million tonnes of coal per annum, resulting in a reduction of carbon emissions of 3.6 million tonnes CO2 per year.