The Rajamandala Hydropower project (Rajamandala) consists of the development and operation of a 47 megawatt run-of-the-river hydropower plant near Bandung on Java Island on a build-operate-transfer basis. The project is being developed by PT. Rajamandala Electric Power (“REP”) and is co-financed by Japan Bank for International Cooperation (JBIC) and Mizuho Bank Ltd (MBL).  MIGA has issued guarantees of up to $200 million covering non-shareholder loans by JBIC and MBL to the Rajamandala project. The coverage is for a period of up to 19 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

In May 2016, a complaint was filed with CAO by a local youth organization on behalf of a local individual and his family.  The complainant alleges that the tunnel construction associated with the Hydro-electric plant has negatively impacted the family's paddy field.

CAO found the complaint eligible in June 2016 and an assessment of the complaint was conducted in August 2016. During the assessment, the complainants and the company agreed to engage in a voluntary dispute resolution process to address the issues raised in the complaint. As part of the dispute resolution process, the parties agreed on two key action items: 1. Addressing outstanding land issues through direct negotiations between the company and the land owners and 2. Work jointly on strengthening communication between the company and the communities. 

The company and the land owners and their families have successfully conducted direct negotiations and agreed on the sale of land to the company.  In October 2016, a training session to help the parties enhance their communication and cooperation was delivered under the auspices of CAO’s Dispute Resolution function. During the training workshop, the parties agreed to hold monthly meetings to continue to improve communication, in turn strengthening their capacity to address future disputes in an amicable way. To date, meetings have been held in November and December 2016, and January 2017. The parties have reported that since the conclusion of the training and the beginning of the monthly meetings, communication and collaboration between them has improved substantially.