The World Bank Group has reportedly providing funds to six Indian banks secretly for building the proposed Rampal power plant in Bangladesh.
In 2013, the Bank said it would end virtually all support for the creation of coal-burning power plants, supporting them only in “rare circumstances” where there are no viable alternatives.
“Since the pledge, 41 coal power projects have received funding from banks and investment funds supported by the World Bank’s private-sector arm, the International Finance Corporation (IFC),” said a report by Inclusive Development International (IDI) on Monday.
These included the planned 1,360-megawatt Rampal power station in Bangladesh, to be situated on the edge of the sprawling Sundarbans mangrove forest, which is home to endangered species and supports the livelihoods of two million people.The IDI, a US based rights group, in its report said the World Bank itself declined to directly support the project, which could threaten the Sundarbans with air and water pollution. But six Indian banks, all IFC-financed, agreed to support the project, despite protests from environmentalists.
These banks are: ICICI, HDFC, IDFC, Kotak Mahindra, Yes and Axis.
“IFC-financed banks have provided support at least 20 new coal power projects since 2013 in the Philippines,” said the report.
Commenting on the issue, Dr Ahsan H. Mansur Executive Director of Policy Research Institute of Bangladesh, (PRI) told The New Nation yesterday that generally, the WB does not finance projects having environment concern. But it provides fund to support private initiative through intermediaries like IFC to build infrastructure projects.
“Even in case of IFC’s funding, there are also social and environment requirements,” he added.
Dr Ahsan H. Mansur, a former senior IMF staff, also said the financial institutions, which are receiving IFC’s fund, are investing the fund to their interest areas without any control and interference by the IFC.
“So, the report of the WB’s secret funding to Rampal project requires a careful assessment,” he added.
Sources said, initially, the WB was eager to directly involve in the Rampal project. Three French banks, Credit Agricole, BNP Paribas and Societe General, also showed interest to fund the power plant. Later, they disappeared from the scene in the wake of countrywide protest against the power plant, sources said.
