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Will The World Bank Continue to Fund Coal in India?

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Tuesday, September 10, 2013
Dan Byrnes (202) 495-3039 or daniel.byrnes@sierraclub.org

WASHINGTON, D.C. -- On Thursday September 12, World Bank Group President Dr. Jim Yong Kim and his management team is expected to determine the financial fate of Mundra, a 4,000-MW coal-fired power plant in western India, that is operated by Tata Power. The World Bank Group’s decision will be released in its response to a complaint lodged by local fishing communities against the coal plant.

Mundra burns approximately 13 million tons of coal a year, sending nearly 40 million tons of carbon pollution into the atmosphere, generating about two million tons of toxic ash, and spewing hundreds of thousands of tons of sulphur oxides and other toxic gases into the air. Last summer, an independent fact-finding team headed by a retired chief justice released a report on the social, environmental, and economic effects of the Mundra coal plant.

"This polluter project is one of the worst of its kind. In 2012 alone, emissions from Indian coal plants resulted in up to 115,000 premature deaths and more than 20 million asthma cases from exposure to their pollution," said Joe Athialy from Bank Information Center, citing a 2012 Greenpeace India report. "Children and families living near the Mundra coal plant cannot go on living like this - their health and livelihoods depend on Dr. Kim listening to their pleas."

The Mundra project has been funded by the World Bank Group's International Finance Corporation (IFC) and other international finance institutions. Currently, the plant is in its final phase of a full compliance review by the complaint mechanism of the IFC, the Compliance Advisor Ombudsman (CAO).

Community members, including local fishers whose practice has been severely threatened by the coal plant's pollution, have formed an organization, MASS (Machhimar Adhikar Sangharsh Sangathan, meaning "Association for the Struggle for Fishworkers' Rights"), and filed complaints to the CAO against Mundra. The complaints resulted in a full audit by the CAO after it found a number of violations, both social & environmental, by Tata Power. The audit report will soon be sent to Dr. Jim Yong Kim, the President of the World Bank, for his approval and actions.

"While the World Bank’s IFC has already approved the project, the World Bank could respond to the very real issues, like mangrove destruction, loss of livelihoods, contaminated fishing, and more, by compensating local communities and halting further disbursements to Mundra," said Bharat Patel of Machimar Adhikar Sangharsh Sangathan.  "If Dr. Kim and his executive team ignore the CAO findings, it will show a lack of interest in protecting communities from dirty and outdated fossil fuels and undermine the strength of the new energy strategy."

Echoing President Barack Obama’s pledge to stop lending financial aid to coal projects overseas, the Board of Directors of the World Bank recently agreed to sharply limit support for coal plants. According to its new energy strategy, the priority of the World Bank will now be to help clients identify alternatives to coal power. The Bank will provide financial support for new coal plants "only in rare circumstances," such as where there are "no feasible alternatives" to meeting basic energy needs.

"The Mundra project is failing, and it’s taking Indian communities down with it. It’s economically impractical to keep pouring money into a project that could be replaced by clean, green technology. The World Bank should discontinue funding the project and compensate communities for the destruction caused,” said Justin Guay, the Sierra Club’s international campaign representative.

Local communities and non-governmental organizations like the Sierra Club have written letters to Dr. Kim asking for him to think of families first, and fossil fuel interests last. The groups will continue to keep the pressure on Dr. Kim to make a good decision and hope for the best when his management team issues its response on Sept. 12.


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