IFC Withraws from Proposed WTE Investment in Gujarat, India
SOLIDARITY PRESS RELEASE
Victory for public health and the environment! The International Finance Corporation (IFC) withdraws from the proposed investment of USD 40 million for four waste incineration plants in Gujarat, India.
February 21, 2025 — In a significant victory for communities, environmental groups, and civil society organisations (CSOs) who have been opposing the proposed toxic and polluting Waste-to-Energy (WTE) incineration projects in Gujarat, India, the International Finance Corporation (IFC), the private lending arm of the World Bank has decided to not invest in it. The IFC had proposed a loan of USD 40 million on May 13, 2024, to support Abellon Clean Energy Limited (ACEL) to build four WTEs in Rajkot, Vadodara, Ahmedabad, and Jamnagar which would cumulatively burn 3,750 tons of unsegregated municipal solid waste every day.
Communities affected by the project, activists, and CSOs, including the Centre for Financial Accountability (CFA) and the International Accountability Project (IAP), voiced their concerns in a letter to the World Bank’s Executive Directors on June 26, 2024. They highlighted the project’s negative impact on air and water quality, public health, climate change, and its violation of Indian laws and IFC’s Performance Standards. The group also raised complaints with the IFC’s Stakeholder Grievance Response Team and presented the project’s harms during an online meeting with the US Treasury in July 2024. Another collective letter was sent to the IFC Executive Directors reiterating these concerns on August 21, 2024, which was signed by 174 CSOs and activists in India and globally. CFA and Recourse also discussed the harms of the proposed WTE incinerators with the World Bank EDs in person and handed over the collective letter at the World Bank Annual Meetings in Washington DC in October 2024. The letters made a clear demand for the World Bank board to reject the investment and cease funding all WTE projects, prioritizing environmental protection and community well-being
After months of resistance and advocacy, the World Bank board’s decision on the Abellon project was delayed twice in July 2024 and again in September 2024. In January 2025, the project disclosure page was removed from the IFC website. Finally, on February 17, 2025, in response to an access to information request regarding the project’s status, the IFC confirmed its withdrawal from the project.
Abellon’s operational WTE incinerator in Jamnagar, which began operations in November 2021, had already caused significant harm to the 25,000 residents nearby, leading to air and noise pollution and health problems like asthma, skin ailments, and eye irritation. The Gujarat Pollution Control Board(GPCB) issued a “show cause notice” on December 15, 2021, to the company based on an inspection of the factory premises. “We were initially informed that all garbage would be transformed into power, but after operations began, we observed that the plant emitted many pollutants. We filed complaints with the Gujarat Pollution Control Board, the Municipal Commissioner, and the District Collector, yet the communities continue to suffer. The IFC’s withdrawal from the project is an important victory for the locals harmed by the plant. Still, nothing short of a complete shutdown of the plant will bring relief to the affected communities.” shared Ker Jayendrasinh, who has been supporting the local communities in Jamnagar.
CSOs had also raised concerns about the inadequate due diligence performed by the IFC, including the lack of meaningful consultations with impacted communities and waste workers. The Environmental and Social Impact Assessments for the project were flawed as they failed to capture the irreversible and cumulative impacts of these WTE incinerators. This incomplete due diligence led the IFC to give this project a lower risk rating and justify this project as being important for waste management and energy recovery in Gujarat. However, the campaign demonstrated that WTE incinerators are a false solution, worsening environmental pollution in countries like India and destroying decentralized waste management systems, especially those built by informal waste sectors.
Research by the CFA questioned the financial feasibility of ACEL, which is facing mounting losses and financial instability. ACEL’s net profit dropped from $1.28 million in 2021 to a loss of $2.18 million in 2023. Earnings Before Interest, Taxes, and Amortization (EBITDA) turned negative, falling from $345,332 to -$1.84 million. ACEL is struggling to meet its loan interest payments, with the shortfall growing significantly, from 1.5 times the required amount in 2022 to 14.11 times in 2023..”Despite receiving various benefits from the government in the form of Viability Gap funding, beneficial electricity prices, revenue from the sales of carbon credits and plastic credits, and an aggregate processing fee from the Urban Local Bodies (ULBs), the WTEs in India are financially unviable and continue to operate primarily because of government subsidies. The Essel Infra projects, with 15 WTE plants across India worth $287 million to $345 million, filed for bankruptcy. Abellon Clean Energy Limited seems to be on a similar path.” said Chythenyen Devika Kulasekaran of the Centre for Financial Accountability.
WTE incinerators are harmful to the climate and are considered to emit more CO2 per megawatt hour than coal, oil, or gas-fired power plants. While the US and EU, once leaders in incinerator technology, are shutting down WTE incinerator plants in their countries due to its harmful climate impacts, these projects are still being promoted in countries in the Global Majority. “IFC and other development finance institutions continue to display environmental racism by funding WTE incinerators in India and other countries in Asia where these are causing severe air pollution. While we welcome IFC’s decision to withdraw from Abellon Clean Energy Limited, we urge them to apply the lessons from this case by adding climate-harming WTE incinerator projects to their exclusion list and halting funding for it globally.” said Vaishnavi from International Accountability Project.
“The alternative to debt-inducing and harmful techno-fixes to waste such as WTE incinerators already exists. IFCs withdrawal only shows the innate risks from WTE projects. Public finance should best support Zero Waste solutions such as waste avoidance, segregation, collection, reuse, and safe and inclusive recycling systems. Communities all over the world have already demonstrated the successes of ZW solutions.”Mayang Azurin, GAIA Asia Pacific Deputy Director for Campaigns said.
This victory is a testament to the strength of collective action which successfully pressured the IFC to not proceed with this investment. By standing up for clean air, sustainable waste management, and protecting livelihoods, we can drive real change. As we celebrate this decision, we urge the World Bank and other development finance institutions to stop funding WTE incinerator projects and instead support community-led Zero-Waste solutions.
