CAO Releases Third Monitoring Report Concerning IFC’s Response to CAO Audit of IFC’s Investment in Coastal Gujarat Power Limited (CGPL) in India

Washington, D.C., October 03, 2025 – The Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for the International Finance Corporation (IFC), a member of the World Bank Group, has released its third monitoring report of IFC’s actions in response to the findings of CAO’s 2013 compliance audit of IFC’s investment in Coastal Gujarat Power Limited (CGPL), India. CAO’s monitoring confirms that IFC implemented most of the commitments it made in 2013 to work with CGPL on project-related environmental and social (E&S) studies. However, these efforts did not address the audit’s findings in relation to complainants’ concerns. The client completed loan prepayment to IFC in 2018, ending the financial relationship, and IFC has subsequently taken no further action to address the CAO audit findings. As a result, CAO has decided to close its monitoring process, noting that IFC’s actions were inadequate to address CAO’s non-compliance findings.

In 2008, IFC invested an A Loan of US$450 million in CGPL, a subsidiary of Tata Power Corporation Limited, to support the development of a 4,150MW coal-fired power plant outside Mundra port in Gujarat, India. In 2011, CAO received a complaint regarding IFC’s investment in CGPL from Machimar Adhikar Sangharsh Sangathan (MASS), representing fisherfolk living in the vicinity of the project alleging wide-ranging environmental and social impacts on fishing communities (CGPL-01). A second complaint (CGPL-02) received in 2016 about IFC’s investment from residents of Tragadi village, situated near the plant, was merged with the first case in 2017.

CAO’s monitoring of this case began in 2014 following CAO’s findings of IFC non-compliance in its October 2013 Audit of IFC’s investment in CGPL. Among the audit’s key non-compliance findings were that IFC overlooked the concerns of religious minority complainants during the project’s risk assessment; that IFC’s review of E&S risks was insufficient for the project’s risk level; that IFC did not ensure proper application of the World Bank Group’s Thermal Power Guidelines to an airshed that would have been considered degraded; and that IFC failed to properly assess land acquisition impacts on the complainants.

In response, IFC’s Action Plan included commitments from the power plant operator to a series of third-party studies and monitoring initiatives, including socioeconomic surveys, marine and biodiversity assessments, air and fish quality monitoring, and health surveys in surrounding communities. CAO issued monitoring reports in 2015 and 2017 following up on IFC’s actions to meet the Action Plan commitments.

This third and final monitoring report covers IFC’s actions during the period 2017-2018 in response to the audit findings. It incorporates the draft report originally completed by CAO in 2019. At that time, CAO postponed publication due to ongoing litigation proceedings in U.S. federal courts involving the affected communities and IFC. These legal proceedings concluded in 2022 when the U.S. Supreme Court declined to review the case for a second time.

As part of its compliance monitoring process, CAO conducted a monitoring mission to India in March 2025 and held meetings with the complainants, their families, and other members of the affected communities. The visit enabled CAO to gain a more comprehensive understanding of the complainants' current conditions and confirmed the assessment and conclusions of CAO’s 2019 draft monitoring report.

While CAO’s monitoring confirms that IFC implemented most of its 2013 Action Plan commitments to work with CGPL on project-related E&S studies—including socioeconomic surveys, fish catch data, baseline health profiles, model confirmation studies, biodiversity assessments, ambient air quality studies and monitoring—all three monitoring reports point to the communities’ situation not having improved. Given IFC’s lack of commercial relationship with its former client, the seven-year time lapse since IFC’s last engagement, and the unlikelihood of further progress on the 2013 Action Plan, CAO has decided to conclude its monitoring process.

CAO’s report notes that this has been an unsatisfactory process for the complainants, their families, and their communities. It has been over a decade since local residents and fisherfolk first raised their concerns about the environmental and social impacts of this IFC investment. To this day, the complainants insist that the concerns they raised about impacts to their health and livelihoods have not been effectively addressed and they report that they are struggling to manage these adverse impacts.

CAO’s final monitoring report is available in English.  A version in Gujarati is currently under preparation and will be published on CAO’s website, which contains all information on the case.

Information about IFC’s investment is available on IFC’s website.