India: India Infrastructure Fund-01/Dhenkanal District

Date Filed
15 Apr 2011
Status
Closed
Phase
Compliance
Country
India

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Dispute Resolution
Transferred
Compliance
Appraisal
Investigation
Monitoring
Closed
Status as of May 29, 2024
CURRENT Status
Closed (COMPLIANCE)
Status as of May 29, 2024

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

Project Overview

In 2007, IFC invested in India Infrastructure Fund (IIF, “the Fund”), a private equity fund focused on various infrastructure sectors in India. One of IIF's portfolio investments is GMR Kamalanga Energy Limited (GKEL), a special purpose vehicle established by GMR Energy Limited. GKEL's primary objective is to develop and manage a 1400 MW coal-based power plant located near Kamalanga village in Dhenkanal district, Odisha.

Complaint

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 highlighted issues regarding the disclosure of project details, transparency concerning environmental and social risks associated with Kamalanga Energy's operations in Odisha, and broader concerns regarding IFC’s role in financing such projects.

Action

In May 2011, CAO found the complaint eligible and initiated the CAO Assessment phase. During the assessment, the complainants and the company agreed to participate in a dispute resolution process. However, the parties were unable to resolve the issues raised in the complaint during this process. As per CAO's Operational Guidelines, the case was referred to CAO's Compliance function.

In January 2016, CAO released its investigation report, along with IFC’s official response. The report identified several deficiencies in IFC's oversight of IIF, including failures in IFC's environmental and social (E&S) due diligence before investment, deficiencies in managing E&S risks, inadequate supervision, and insufficient transparency. The report also noted deficiencies in IFC's approach of relying on IIF to develop its own E&S management systems, which did not meet expected standards. Despite receiving complaints and approving funding several years earlier for the GKEL project, IFC acknowledged that significant concerns raised by complainants regarding project impacts had not been adequately addressed in line with IFC's Performance Standards (PS).

CAO Monitoring Reports

In March 2019, CAO published its First Monitoring Report. CAO noted that IFC had actively monitored IFF’s implementation of the IFC-IIF E&S Action Plan. Positively, IFC had negotiated additional supervision access rights and conducted site supervision visits to three portfolio companies to verify PS implementation. Notwithstanding IFC’s active supervision of the Fund and noting IFC’s view that the Fund’s E&S performance was rated as unsatisfactory since 2012, CAO expressed concerns that IFC’s investments potentially had adverse E&S project impacts, which had yet to be resolved.

Regarding the Kamalanga project, CAO noted that IFC actively supervised the implementation of the IIF’s and GKEL’s E&S Social Action Plan. This plan facilitated the creation of additional assessments and strategies aimed at addressing project impacts. However, CAO emphasized the need for ongoing IFC supervision to ensure compliance at the project level, particularly concerning issues identified in CAO's investigation. These include the effectiveness of livelihood restoration measures for affected households due to land acquisition, consultation processes related to livelihood restoration plans, local language disclosure of project E&S information, methodology for determining compliance with PS7 assessment and mitigation of community health impacts, and monitoring of the project's adherence to IFC air quality standards.

In May 2024, CAO published its Second Monitoring Report. The report outlines IFC’s supervision of the E&S Action Plans committed to by IIF and the Kamalanga project. CAO’s report notes that IFC has failed to provide evidence of adequate implementation of the client E&S Action Plan, and available evidence indicates that PS gaps persisted at the Kamalanga project at the time of IIF’s exit from the coal plant in 2022.

As IIF is currently disposing its investments and ending its operations, CAO decided to close this case, as there is no reasonable expectation of further action by IFC to address the impacts raised by the complainants.

The Omnibus Monitoring Report for this case is available in English.

Status

This case is closed after monitoring.

Status as of June 04, 2024.

Case Documents

  • Complaint
    Letter of Complaint
    Apr 15, 2011
    English
    Letter of Complaint
    Assessment Report
    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
  • Conclusion Report
    Conclusion Report
    Mar 01, 2013
    English
    Conclusion Report
    Conclusion Report
    Mar 01, 2013
    Odia
    Conclusion Report
  • Compliance

    Appraisal Report
    Compliance Appraisal Report
    Jun 26, 2013
    English
    Compliance Appraisal Report
    Terms of Reference
    Terms of Reference
    Jul 26, 2013
    English
    Terms of Reference
    Investigation Report
    Investigation Report
    Oct 28, 2015
    English
    Investigation Report
    Executive Summary
    Oct 28, 2015
    Odia
    Executive Summary
    Investigation Report (Full)
    Oct 28, 2015
    Odia
    Investigation Report (Full)
    IFC's Response to Investigation Report
    Oct 27, 2015
    English
    IFC's Response to Investigation Report
    Communiqué
    Jan 01, 2016
    English
    Communiqué
    Monitoring Report(s)
    First Monitoring Report
    Mar 29, 2019
    English
    First Monitoring Report
    First Monitoring Report
    Mar 29, 2019
    Odia
    First Monitoring Report
    Omnibus Monitoring Report (Second Monitoring Report)
    Feb 09, 2024
    English
    Omnibus Monitoring Report (Second Monitoring Report)
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