Star Hydropower

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Star Hydro Power Limited (“SHPL” or the “Company”) is in the process of developing a 147 MW run-of-the-river greenfield hydroelectric power plant, on a Build Own Operate and Transfer (“BOOT”) basis, situated in part on the Kunhar river, which marks the border between Azad Jammu and Kashmir (“AJK”) and the Khyber Pakhtunkhwa province of Pakistan (“KP”) and in part on the Jhelum river in AJK” (the “Project”). AJK is the Pakistan-administered portion of an area over which India and Pakistan have been in dispute since 1947. By supporting the project, IFC does not intend to make any judgment on the legal or other status of any disputed territories or to prejudice the final determination of the parties'' claims. The Project will divert a portion of the Kunhar River through a tunnel to a powerhouse located on the right bank of Jhelum River at the village of Alda opposite the Lower Chattar area of Muzaffarabad town. The Project main components consist of a diversion weir (42 m height) across Kunhar River, near Patrind village, a headpond formed by the weir extending approximately seven km upstream on the Kunhar River contained by a natural gorge, an intake structure with siltation chambers, a 2.2 km headrace tunnel, an underground penstock, a surge chamber, a power house and tailrace structure. Two temporary coffer dams and a diversion tunnel will be built on the Kunhar River to maintain dry conditions during the construction of the permanent diversion weir.Electricity from the Project will be sold to National Transmission and Dispatch Company (“NTDC”), Pakistan’s state-owned company. NTDC will construct and operate a transmission line from the Project site to NTDC’s national grid. As of December 2010, options being considered by NTDC are either (i) 132 kV transmission line to Gahri Halibullah Grid Station (which is in the planning stage and the land is being acquired) which will be about 20 to 25 km from the Project site, or (ii) 132 kV or 220 kV transmission line to grid stations in Mansehra, with total transmission line distance of about 50 to 60 km. The Jhelum River is classified as an International Waterway and together with its tributaries, including the Kunhar River, is subject to the Indus Waters Treaty of 1960. In accordance with IFC’s Policy on Social and Environmental Sustainability (April 30, 2006), IFC sent riparian notices to the IFC Executive Directors for both, India and Pakistan notifying them of IFC’s proposed investment in the Project and its location in AJK, the Pakistan-administered portion of an area over which India and Pakistan have been in dispute since 1947. By supporting the Project, IFC does not intend to make any judgment on the legal or other status of any disputed territories or to prejudice the final determination of the parties’ claims.