IFC’s funding of Tata Ultra Mega powerplant in India will be under probe following the eligibility finding of a complaint lodged by fishing villagers.
They cannot afford to ignore us”, says Aminaben Arun Gadh from the fishing settlement in Mundra coast in northwest India, upon learning that their formal complaint was deemed eligible for investigation.
Aminaben refers to the International Finance Corporation’s (IFC) funding for the 4,000 MW coal-based Tata Ultra Mega Power Plant. She is one of the leaders of Machimar Adhikar Sangharsh Sangathan who filed a collective protest against the project two months ago that exposes its high risks without proper mitigation and accountability measures.
This is another blow to the IFC, the World Bank’s private sector lending arm, whose financing of high-risk coal plants in India faces community resistance. Its Compliance Advisor Ombudsman (CAO) has accepted a complaint against the 4,000 MW coal-based Tata Ultra Mega Power Plant in Mundra, Gujarat. This came two months after villagers in Odisha state formally challenged IFC’s funding for the hazardous GMR Kamalanga Energy Limited. CAO is the independent body of IFC that handles disputes and compliance issues with its investments.
Lodged by fishing and farming villagers, the complaint claims that due to flawed design and execution, including breaches of mandatory client obligations, the mammoth coal-fired power plant is contributing to the destruction livelihood of thousands of families and will cause irreparable damage to their fragile marine resources and agriculture.
With a total project cost of US$ 4.14 billion, the IFC is investing a $450 million loan and $50 million in equity. Other financial institutions funding the project are the Export-Import Bank of Korea, Asian Development Bank, India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Travancore, the State Bank of Indore and other local banks.
As the plant is located in the special economic zone (SEZ) that cuts across fishing grounds, habitat of diverse marine lives and wide expanse of farm land, complainants state that the project’s social impact assessment is significantly flawed. Fishing communities were excluded from the list of those directly impacted; the major damage and potential loss of their livelihood was deliberately overlooked.
Bharat Patel of Machimar Adhikar Sangharsh Sangathan notes, “the social and environmental analysis and risk mitigation plan of the project does not address the immediate threat of physical and economic displacement of roughly over 1,000 small-scale fishing families. As the project will emit ashes and tons of C02 and discharge wastewater all the way to the harbor and fish habitat, no feasibility plan has been demonstrated so far to prevent or reduce these risks, which pose a long-term threat of decline in fish catch.”
IFC green lighted the loan without a cumulative impact assessment, which then overlooks the other agricultural, marine, and other economic harms that existing power plants and manufacturing have created.
The project does not consider the impacts to the approximately 3,500 fishing families settled along the Kutch coast of Mundra. These families contribute to Mundra’s annual fish harvest of about 12,000 MT with an estimated value of US$ 13.5 million. Fish products are marketed across Indian states and overseas.
“Nobody from the company and the other banks paid attention to our concerns. Now that the CAO has accepted the complaint, we hope that the serious issues would be exposed and protective measures to our livelihood be installed”, said another complainant, Harunbhai Salemamad Kara.
Contact
India: Bharatbhai Patel: +91-9426469803
Washington, DC: Jelson Garcia: jgarcia@bicusa.org; +1 (202) 427-6293