PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report no.: 38039 Project Name Improved Electricity Access for Slum Dwellers in Mumbai Region SOUTH ASIA Sector Energy Project ID P101553 Borrower(s) Not applicable Implementing Agency Reliance Energy Limited Environment Category [ ] A [ ] B [ ] C [ ] FI [ x] TBD (to be determined) Date PID Prepared November 10, 2006 Estimated Date of February 1, 2007 Appraisal Authorization Estimated Date of Approval TBD

1. Key development issues and rationale for Bank involvement

The city of Mumbai has over 6 million slum dwellers, a large number of whom do not have access to legal electricity service. Reliance Energy Limited (REL), a major private utility is the distribution concessionaire (REL purchases power from the State Electricity Board), and serves over 2.2 million customers in urban and suburban Mumbai. REL is regulated by Maharashtra Electricity Regulatory Commission. The U.S. Agency for International Development (USAID) is developing a program to help improve service delivery in slum areas in Mumbai, as part of its energy sector assistance program in India. By incorporating an output-based aid (OBA) component, it would be possible to implement a much larger pilot program while also testing an OBA approach for electricity connections in slums in India. It is expected that such an approach could be replicated in other major Indian cities, where slum areas abound and access to legal and safe electricity remains elusive for many slum dwellers.

2. Proposed objective(s)

The proposed objective of the Global Partnership on Output-Based Aid (GPOBA) intervention is to develop, test, evaluate and scale-up customized approaches to improve electricity access and normalize services in slum areas by the private sector utility, REL, in Mumbai, India, in order to improve the economic opportunities and quality of life for slum dwellers. The pilot project seeks to regularize or make new connections for 20,000 hh, with an average cost of about $75 per household.

3. Preliminary description

Under the proposed GPOBA support scheme, REL is responsible for all costs (including increased capacity in the system) and including the household meter. Customers are responsible for all internal wiring and wiring from the meter to the hutment as well as basic connection fees, small deposits, etc. The project envisages making new connections as well as regularizing connections in the targeted slum areas. Regularization of connections are those connections which are currently served by REL informally or which do not have proper internal wiring or rewiring between the meter box and the dwelling unit. The GPOBA subsidy would be used to cover a portion of the cost of a new and regularized connection. USAID’s parallel program will seek to develop an integrated approach of actively engaging the government, utilities and communities and, thus, address both supply- and demand-side issues. USAID activities will help mobilize local community groups to develop social contracts between the slum communities and REL; develop cooperative models to eliminate theft, reduce reselling of electricity and improve collections; and maximize the socioeconomic impacts of the legal electricity service through parallel outreach efforts to promote efficient and productive uses of the electricity.

4. Safeguard policies that might apply

No safeguard policies are expected to apply to this project but this will be reviewed at the development stage.

5. Tentative financing

Global Partnership on Output-Based Aid (GPOBA) $1.5 m

6. Contact point Contact: Cledan Mandri-Perrott Title: Infrastructure Specialist Tel: 202-473-6220 Email [email protected]