The PSBC Equity Project comprises an IFC investment in the Postal Savings Bank of China (PSBC) to promote financial services to communities, Small and Medium-sized Enterprises (SMEs), and Agriculture/Rural/Farmers (ARF) customers.

In August 2023, CAO received a complaint in relation to a range of social and environmental impacts regarding the Lower Sesan 2 Hydropower project in Cambodia.

The complaint alleges that PSBC is exposed to the Lower Sesan Dam through financial links with Huaneng Lancang River Hydropower. According to the complaint, Lower Sesan 2 is 51% owned by Hydro Lancang International Energy, which is wholly owned by Huaneng Lancang River Hydropower.

In November 2023, CAO found the complaint eligible for assessment. In February 2024, in accordance with Paragraph 56 (2) of the CAO Policy, CAO Management granted an extension of the assessment deadline until May 23, 2024.

During the assessment process, the complainants expressed interest in a CAO-facilitated dialogue with the Lower Sesan 2 Project owner. On their end, PSBC disagreed with CAO’s eligibility decision and expressed that there were no material financial links between PSBC and Hydro Lancang International Energy, the project owner. However, they were open to CAO contacting the project owner and did not opposed to a CAO-facilitated dialogue process between the project owner and the complainants. CAO's attempts to contact the project owner were unsuccessful. CAO’s Assessment Report is available in English and Khmer.

Consequently, in accordance with CAO Policy, the case was transferred to CAO’s Compliance function for appraisal of IFC’s environmental and social performance in May 2024.

In September 2024, CAO finalized its compliance appraisal with the decision not to pursue a compliance investigation. CAO made this decision on the basis that the Lower Sesan 2 hydropower project cannot be classified as an IFC sub-project through its investment in PSBC, according to the definition in the CAO Policy, which restricts its compliance function to the project and sub-project levels. Accordingly, the case was closed after the appraisal.

The Compliance Appraisal Report is available in English.