Coastal Gujarat Power Limited (CGPL or the company) is building and will operate a 4,000MW ‘ultra mega’ imported coal and supercritical technology-based power plant at the port city of Mundra in the state of Gujarat in India. The project will source imported coal from mines in Indonesia and other countries.  IFC is investing in the project through an A Loan of US$450 million.

In April 2016, CAO received a complaint filed by local residents of Tragadi village raising concerns about the outfall channel connected to the CGPL project. The complaint raises concerns about the impacts of the channel on the environment and local fishermen’s livelihoods, including limited access to water resources, coastal erosion, and damage to fish stocks and natural habitats. The complainants also raise issues regarding the use of security forces and their interaction with local populations, as well as unfulfilled social and environmental commitments.

CAO found the complaint eligible for further assessment in May 2016 and initiated an assessment of the complaint. The Complainants and CGPL did not agree to participate in a CAO-facilitated dispute resolution process. Given the voluntary principle guiding participation in a CAO dispute resolution process, and in accordance with CAO’s Operational Guidelines, the complaint was transferred to CAO Compliance for appraisal of IFC’s environmental and social due diligence of the project.

CAO’s compliance appraisal, published in September 2017, noted that the CGPL-02 complaint raises questions as to IFC’s application of its E&S requirements to the project. As CAO’s ongoing compliance monitoring process of IFC’s response to the CGPL-01 audit addresses substantially similar compliance issues, CAO decided to merge the two cases for ongoing monitoring.