Yann Louvel, email@example.com
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As the UNESCO World Heritage Committee meets this week in Bonn, Germany, a new report from BankTrack shows that the Rampal coal power plant, proposed for construction on the edge of the World Heritage Sundarbans mangrove forest in Bangladesh, would breach the Equator Principles, a set of guidelines for project finance followed by 80 banks around the world.
The report was published at the same time as a report in the Guardian newspaper which revealed that the three largest French banks, BNP Paribas, Crédit Agricole and Société Génerale, have said they will not finance the Rampal project. The move comes six months after two Norwegian pension funds withdrew from India's National Thermal Power Corporation, one of the companies involved in developing the plant.
"The analysis shows that serious deficiencies in project design, planning, and implementation and due diligence obligations render the project non-compliant with the minimum social and environmental standards established by the Equator Principles, as well as the International Finance Corporation's Performance Standards," states the report.
The Sundarbans is the largest mangrove forest in the world and forms a natural fence protecting the coastal belt areas of Bangladesh. It is estimated that over one million people depend on the Sundarbans for their livelihood, many of whom work seasonally as fishermen. The coal-based thermal power plant at Rampal will be located just 14 kilometres upstream of the Sundarbans Reserve Forest. The Bangladeshi government has justified the location of the project on the ground that it is at a ‘safe' distance from the mangrove forest.
BankTrack has assumed the Equator Principles apply to the Rampal coal plant as the project proponents are seeking project finance to proceed, total project capital costs far exceed the US $10 million threshold for application of the principles, and most importantly, because the project poses significant adverse social and environmental risks and impacts that are diverse and irreversible.
BankTrack is calling on the Equator Principles financial institutions (EPFIs) to follow the French banks and publicly rule out involvement in financing or support of any kind for the Rampal coal plant. "The failure to comply with these minimum standards are indicative of the social, environmental and financial risks the Rampal coal plant poses and make the project a clear "no-go" for EPFIs," states the report.