World Bank’s audit arm, Compliance Advisor Ombudsman (CAO), is reviewing a $450-million funding for Tata Power’s project in Mundra, Gujarat, to assess compliance to various environmental and social norms regarding this investment.
The investment in this 4,000-megawatt (Mw) ultra-mega power project (UMPP) has been made by World Bank’s private sector lending arm IFC (International Finance Corp).
The CAO, an independent arm of the World Bank group, is also looking into “whether IFC gave adequate consideration to the cumulative impacts of Adani Power and the construction of the Mundra West Port in its Environment & Social review” while investing in this UMPP.
CAO reviews complaints from communities affected by development projects undertaken by World Bank’s two private sector lending arms, IFC and Multilateral Investment Guarantee Agency (MIGA).
The CAO review follows complaints regarding alleged and anticipated adverse impacts of Mundra UMPP on livelihoods and environment brought up by ‘Machimar Adhikar Sangharsh Sangathan (MASS) — the Association for the Struggle for Fishworkers’ Rights’.
The group represents fisher folk in the vicinity of the project.
When contacted, a CAO spokesperson said “an audit of IFC is now underway”.
Replying to queries in this regard, Tata Power said in a statement the Mundra UMPP “strictly abides by stipulated norms for its operations including environment, community engagement and ecological impact”.
“The company is committed to its communities and environment in which it operates. Mundra plant is fully compliant on all environmental and social norms and the same has been endorsed by Ministry of Environment and Forests and other statutory bodies,” the company noted.
In its appraisal report dated July 27, CAO said after reviewing “the complaint and related documentation, CAO concludes that a number of issues raised by the complainants merit further inquiry”.
The total cost of Mundra UMPP is estimated to be $4.14 billion (about Rs 20,000 crore). Out of that, IFC is providing $450 million (over Rs 2,000 crore).
Tata Power’s wholly-owned subsidiary Coastal Gujarat Power Ltd (CGPL) is implementing the Mundra UMPP in Gujarat.
According to the CAO, it is also significant that the coastline around Mundra is undergoing a rapid industrial transformation.
“This involves, in addition to the construction of the CGPL power plant, the development of the the Adani Group’s Mundra Port and Special Economic Zone (MPSEZ) which includes significant expansion of existing port facilities and the construction of a 4,620-Mw coal fired power plant (Adani Power),” CAO observed.
Tata Power said the UMPP boundary consists of less than one per cent of the Kutch coastline and, therefore, is insignificant in terms of exposure.
“We also wish to reinforce that the core issues raised by MASS are not specific to Mundra UMPP and relate to certain generic issues concerning the coastline of Gujarat,” the company noted.
Among others, the audit would look at whether IFC policies and procedures provide adequate guidance to staff on how to manage environment and social risks associated with projects in areas that are undergoing rapid industrial development.
