CAO Cases

Arne Hoel, The World Bank

Latin America & the Caribbean

Guatemala / Real LRIF-01/Coban

Complainant
Local NGOs on behalf of several affected communities
Date Filed
October 29, 2014
Concerns
Impacts on water, livelihood, indigenous peoples, lack of information and consultation, social and environmental due diligence
Case Status
Open - Compliance
 

Synopsis

Complaint

In October 2014, CAO received a complaint regarding IFC's investment in the Latin Renewables Infrastructure Fund, L.P. (LRIF), a 10-year closed-end private equity fund to invest in 8-12 infrastructure projects in the renewable power and energy efficiency sectors of Latin America and the Caribbean.

 

As stated in IFC’s disclosure webpage, the Fund has invested in the Santa Rita Hydroelectric Power Plant, a 23.2MW run-of-the-river hydro project in Coban, Guatemala.

 

The complaint was submitted by two local organizations, Colectivo Madre Selva and the Consejo de Pueblos de Tezulutlan on behalf of several communities downstream and upstream of the Santa Rita project.  The complaint raises concerns regarding a range of environmental and social issues related to IFC due diligence, project information disclosure and consultation, impacts to local water sources, displacement, indigenous people, and security concerns.   The complainants have requested that their individual names be confidential.

 

CAO Action

CAO found the complaint eligible for further assessment in November 2014 and an assessment of the complaint was conducted in January 2015. During the assessment, although LRIF and HSR expressed willingness to engage in a CAO facilitated dispute resolution process, the complainants however indicated a preference for the case to be handled by CAO Compliance function. In accordance with CAO's Operational Guidelines, the case was referred to CAO Compliance for appraisal of IFC's environmental and social performance with regard to the project. 

 

CAO’s appraisal of the case considered IFC’s pre-investment review and supervision of its investment in the Fund and the identification and management of E&S risks related to the Fund’s sub-projects.

 

CAO completed its compliance appraisal in July 2015. In relation to IFC’s E&S performance, CAO has identified questions as to: (a) whether IFC’s pre-investment review was commensurate to risk; and (b) the adequacy of IFC’s approach to the management of E&S risks in relation to this investment. CAO has also identified questions as to IFC’s supervision of its investment in the Fund, in particular whether the advice that IFC provided the Fund in relation to the Santa Rita project, both at the ESDD phase and thereafter, met IFC’s E&S requirements. Therefore, CAO decided to initiate a compliance investigation.


 

Status

Terms of reference for this compliance investigation were disclosed On October 26, 2015.

On August 24, 2017, CAO sent its final investigation report to IFC for official response. IFC has 20 working days to submit a response.

All documents relating to this case are available under "View Documents" below. 

 

 

 

Status as of August 25, 2017

Project information

Institution
IFC
Project Name & Number
Real LRIF 31458
Department
Private Equity & Investment Funds
Company
Latin Renewables Infrastructure Fund, L.P.
Sector
Power
Region
Latin America & the Caribbean
Country
Guatemala
Environmental Category
FI1
Commitment
US $15 million equity investment

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Transferred

Compliance

  • Under Appraisal: Completed
  • Under Audit: In Process