Khulna Power Project Summary Of Project Information (SPI)       Project Name    Bangladesh - Khulna Power Project              Region    Asia        Sector       Project No008750   Projected Board DateMay 28, 1998   Company NameKhulna Power Company, Ltd.   Technical Partner and/or Major Shareholders    	Major Shareholder is Wartsila NSD Power Development    Project Cost Including proposed IFC investment    	US$108 million, including an IFC A Loan of US$23.5 million, a B Loan of US$37 million and equity of US$3.3 million.    Location of project and Description of site    	The project is located near the city of Khulna, the third largest city in Bangladesh.  The project site is a vacant property situated on the bank of the Bhairab River, and is adjacent to an existing power station and an oil tank farm.    Description of Company and Purpose of Project    	The project consists of a 110 MW power plant to be developed under a build, own, operate scheme.  The project would initially run on residual fuel oil, to be converted to natural gas as soon as it is available.  The electricity to be produced will be sold to the Bangladesh Power Development Board, the national utility, on the basis of a 15 year PPA.      The project will be one of the first IPPs to be implemented under the new Government of Bangladesh guidelines for private power projects.  At about 80 kWh, Bangladesh is among the lowest in developing countries in terms of electricity generated per capita, and its distribution network serves only about 15% of the population. As Bangladesh has enjoyed steady growth in recent years, the infrastructure to supply electricity to the economy has not kept pace with this growth.  Reliability of electricity supply, which has been a growing problem over the years, has now reached crisis proportions.  Peak demand is about 2700 MW, whereas available generation is about 2000 MW.  The demand supply imbalance has now become a major bottleneck to economic growth.  The Khulna power project, which is expected to be completed within 12 months, is a fast-track response to the power shortage situation.  IFC''s participation in the project, including its proposed B Loan umbrella protection, is critical to mobilize adequate debt financing from the market.      Environmental Category and Issues    	This is an environmental review category B project. Environmental and social issues associated with the project include: site selection and land use, site contamination from past activities, air emissions and noise from construction and plant operation, liquid effluents, liquid and solid waste disposal, oil transportation safety and spill potential, social impacts, fire prevention and emergency response, employee health and safety programs, and impact management and monitoring. KPC has prepared an environmental assessment for the project to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. The proposed site for the project was identified by BPDB in their RFP for the project. The project is located on an uninhabited, vacant property owned by PADMA, the state oil company. No resettlement of residents or economic displacement was required.    During operations the proposed power plant''s emissions will meet the World Bank emission guidelines. The predicted ambient pollutant levels contributed by the proposed power plant are within all Bangladesh standards and World Bank guidelines on a stand-alone basis. The site is adjacent to an existing power plant, and modeling of the emissions from the existing and proposed plants indicates that World Bank guidelines for ground level concentrations of SO2 (24 hour average) would be exceeded. Means to mitigate these relatively minor effects on ground level SO2 concentrations so that there will be no net decrease in ambient air quality are being further investigated by the sponsor. Noise monitoring will be carried out upon completion of the proposed plant to confirm compliance with recommended noise guidelines or recommend mitigation measures should they prove necessary. All effluents to water from the site are expected to comply with World Bank and Bangladesh guidelines.    Socioeconomic impacts are largely beneficial ones, including the positive, short-term impact on employment and local businesses as a result of construction activities, the bringing of a reliable source of electricity to the area, and the establishing of a Social Goodwill Fund to be made available to the local community for its general benefit.    The  is  from the Public Information Center.       Date SPI sent to PIC     April 28, 1998      This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporations Board of Directors.  It is provided for the purpose of enhancing the transparency of IFCs activities and should not be construed as presuming the outcome of IFC Board consideration.    For Additional Information contact:  Corporate Relations Unit -   telephone: (202) 473-7711   facsimile: (202) 974-4384  Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).