CAO found IFC made serious lapses in funding Tata coal plant; President Kim rejects expert findings, thwarts further action

The International Finance Corporation (IFC) broke its own social and environmental rules, says the Compliance Advisor Ombudsman (CAO) which released an investigation report yesterday. A recourse mechanism for communities affected by private sector projects that the World Bank Group supports, CAO found that IFC committed serious violations of its mandatory safeguards in financing its client, the Coastal Gujarat Power Ltd. (CGPL), which manages the 4,000 megawatt Tata Mundra Ultra Mega Power Project in Kutch, Gujarat. Stopping short of calling for IFC’s withdrawal from financing the project, the CAO finds that the ‘IFC weaknesses in reviewing the client’s risk assessment and mitigation did not support the formation of a robust view that the project met the IFC’s policy requirements, that IFC did not consider alternative project design to avoid or minimize impacts, and that IFC has not treated complainants’ concerns as compliance issues.’

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