India: India Infrastructure Fund-01/Dhenkanal District

Date Filed
15 Apr 2011
Status
Open
Phase
Dispute Resolution (DR), Compliance
Country
India

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Transferred
Compliance
Appraisal
Investigation
Monitoring
CURRENT Status
Monitoring (COMPLIANCE)

Complaint Overview

Complainant

Odisha Chas Parivesh Surekhsa Parishad & Delhi Forum

Concerns

Transparency, community engagement, human rights protection, and environmental sustainability

Cross-Cutting Issues
Risk Management Labor Migrant Workers Resource Efficiency Community Health and Safety Land Resettlement Biodiversity Indigenous Peoples Air Land Water Loss of Livelihoods Private / Personal Property Damage Public Infrastructure Damage Unfulfilled Commitments Access to Information Policy

Project Information

Region
South Asia
Institution
IFC
Name & Number
India Infrastructure Fund 26237
Company
India Infrastructure Fund
Sector
Financial Markets
Department
Global Practice - Finance & Markets
Category
FI
Commitment

$100m equity investment

Synopsis

Complaint

In 2007, IFC made an equity investment in India Infrastructure Fund (IIF, the Fund), a private equity fund. IIF has made equity investments in energy and utilities, transport infrastructure, telecommunications, and other infrastructure solely in India. 

A portfolio investment of IIF is GMR Kamalanga Energy Limited (GKEL).  Kamalanga Energy is a special purpose vehicle set up by GMR Energy Limited to develop and operate a 1400 MW coal-based power plant near Kamalanga village in Dhenkanal, a district of Odisha state.

In April 2011, Odisha Chas Parivesh Surekhsa Parishad (Odisha Agriculture and Environmental Protection Council), a grassroots organization, together with the Delhi Forum, a Delhi-based advocacy and research organization, filed a complaint with the CAO on behalf of people affected by the project.  The complaint voices concern about disclosure of project information and transparency about potential environmental and social risks and impacts of Kamalanga Energy in Odisha, as well as more broad concerns about IFC's financing role. 

CAO Action

During CAO’s Assessment in May 2012, the complainants and the company expressed their commitment to addressing the concerns in the complaint through a dialogue process facilitated by CAO.  However, this process did not lead to a resolution between the parties and the case transferred to CAO’s compliance function in March 2013. 

In January 2016 CAO released a compliance investigation report along with IFC’s official response.  CAO’s investigation report identified a number of shortcomings in IFC’s review and supervision of the Fund. Specifically, CAO’s investigation report makes non-compliance findings in relation to IFC’s pre-investment E&S due diligence, its structure for management of E&S risk, as well as IFC’s supervision and disclosure.  CAO also noted that IFC’s approach of supporting the Fund to develop its own social and environmental management systems for compliance with IFC’s Performance Standards did not deliver the intended outcomes in this case. Further, more than five years since approving the Fund’s first disbursement for the GKEL project and four years since a complaint was received by CAO, IFC only recently concluded that key concerns regarding the impacts of the project, as raised by the complainants, have not been addressed in accordance with the Performance Standards. 

In March 2019, CAO completed a monitoring report of IFC’s response to CAO’s investigation report and its supervision of the Fund thereafter. CAO noted that IFC has actively monitored the Fund’s implementation of the IFC-IIF E&S Action Plan. Positively, IFC has negotiated additional supervision access rights and has conducted site supervision visits to three portfolio companies to verify Performance Standards implementation. Notwithstanding IFC’s active supervision of the Fund and noting IFC’s view that the Fund’s E&S performance is rated as unsatisfactory since 2012, CAO is concerned that IFC’s investments have potentially had adverse E&S project impacts which have yet to be resolved. 

With regard to the Kamalanga project, CAO noted IFC’s active supervision of the implementation of the IIF-GKEL E&S Action Plan. While this action plan has led to the development of additional assessments and plans to resolve project impacts, further supervision by IFC is necessary to assure itself of project level compliance in relation to issues identified in CAO’s investigation report. Specifically, these include the adequacy of: (a) livelihood restoration measures for households impacted by land acquisition; (b) consultation around the livelihood restoration plan; (c) disclosure of project E&S documentation in local languages; (d) the methodology used to determine PS7 applicability; (e) community health impact assessment and risk mitigation framework; and (f) monitoring of project compliance with IFC air quality requirements. 

CAO's reports are available in 'View Documents' below.

Status

CAO released a compliance monitoring report on April 3, 2019. The case remains open in CAO’s monitoring function. 

Status as of April 05, 2019

Case Documents

  • Dispute Resolution

    Complaint
    Letter of Complaint from Odisha
    Apr 15, 2011
    English
    Letter of Complaint from Odisha
    Assessment Report(s)
    Assessment Report
    Feb 01, 2013
    English
    Assessment Report
    Assessment Report
    Feb 01, 2013
    Odia
    Assessment Report
    IFC Management Response to the CAO Assessment
    Feb 26, 2013
    English
    IFC Management Response to the CAO Assessment
    Close-out Report(s)
    CAO Conclusion Report: India Infrastructure
    Mar 01, 2013
    English
    CAO Conclusion Report: India Infrastructure
    CAO Conclusion Report: India Infrastructure
    Mar 01, 2013
    Odia
    CAO Conclusion Report: India Infrastructure
  • Appraisal Report(s)
    CAO Appraisal for Compliance Investigation of IFC
    Jun 26, 2013
    English
    CAO Appraisal for Compliance Investigation of IFC
    Audit Report(s)
    Terms of Reference for Compliance
    Jul 26, 2013
    English
    Terms of Reference for Compliance
    CAO Compliance Investigation Report
    Oct 28, 2015
    English
    CAO Compliance Investigation Report
    Executive Summary
    Oct 28, 2015
    Odia
    Executive Summary
    Full Report
    Oct 28, 2015
    Odia
    Full Report
    IFC's Response to CAO Compliance
    Oct 27, 2015
    English
    IFC's Response to CAO Compliance
    CAO Communique: India Infrastructure Fund
    Jan 01, 2016
    English
    CAO Communique: India Infrastructure Fund
    Monitoring Report(s)
    CAO Compliance Monitoring Report
    Mar 29, 2019
    English
    CAO Compliance Monitoring Report
    CAO Compliance Monitoring Report
    Mar 29, 2019
    Odia
    CAO Compliance Monitoring Report