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Home › Dodgy Deals ›
Dodgy Deal
Sasan ultra mega coal power project (UMPP)India

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

climate@banktrack.org

Last update: 2016-10-07 04:44:50
Photo: -

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

climate@banktrack.org

Last update: 2016-10-07 04:44:50
Why this profile?

What must happen

As the Sasan plant will be responsible for emitting large amounts of CO2, financial institutions should withdraw their project fundings and instead relocate these investments into renewable energy sources.

About
Sectors Coal Electric Power Generation
Location
Website http://www.reliancepower.co.in/business_areas/power_projects/coal_based_projects/sasan/factsheet.htm

The Sasan project, also known as the Sasan Ultra Mega Power Project (UMPP), is a 3,960 megawatt (6x660 megawatt) coal-fired project, located in Sasan, Madhya Pradesh in India. This initiative of the Government of India is run by Reliance Power. UMPPs are coal based power plants that produce around 4,000 megawatt, making them some of the largest sources of greenhouse gas emissions in the world. Sasan was the first UMPP awarded in India. As of March 2015, the sixth and last unit was commissioned, bringing the total capacity of the plant to 3,960 megawatt. The total investment amounts to USD four billion.

Sasan UMPP is a pit-head power project, which has been allocated three captive coal mine blocks: Moher, Moher Amlori extension and Chhatrasal. Reserves are in excess of 750 million tonnes. Plans for development of these mines were prepared and approval was obtained in a record period of seven months. Together, the mines will produce 25 million tonnes of coal each year, making these mines among India's largest. Coal production has commenced from the Moher and Moher Amlori mines. 

The project achieved financial closure in April 2009. The lenders for the project are a consortium of banks led by State Bank of India, the country's largest bank. The lending was done on a project finance basis and with an estimated project cost of around INR20,000 crores (USD four billion) with a debt-equity ratio of 75:25, making it the largest debt on project finance basis across industries in India.

Impacts

Social and human rights impacts

Environmental, social, and economic impacts have been outlined in the ESIA:

  • The ESIAs mention that 1,000 households will be displaced. In reality more people have been impacted. About 6,000 people have lost their land and homes. Issues surrounding displacement are critical due to the stark poverty of the area which has just one or two pakka (permanent) houses. A fact finding mission in 2014 has found that residents were not compensated, or compensated below the legally required levels. It also found that housing at resettlement colonies was not made available to all those facing eviction. The resettlement colonies were lacking in basic amenities such as water pumps and schools. 

  • The ESIAs also show a general lack of planning and preparation for the social and economic impacts that will accompany the boom in construction in the project area. 

  • They also gloss over the potentially severe impacts of water pollution and water scarcity in the project area that is heavily dependent on rain-fed agriculture and has water supplies which the ESIA describes as only "generally potable." The Rihund Dam was built in 1962 for hydroelectric and irrigation purposes, but now the water is mostly used as cooling water for thermal power plants.

  • Valuable irrigated agricultural land is being diverted to be used for the power plant, the ash pond or for mining overdumping, as happened around the Amroli village and with the Baiga people. Locals have complained that their drinking water is unfit for consumption due to material from the ash pond that is seeping into the groundwater supply.

The entire process of land acquisition has been marred with false promises and coercion. Procedures on land acquisition on the part of the company have been completely disregarded. Community's property has been destroyed before the clearance and acquisition processes were complete, as has happened in the village of Harrahaawa.

Land has been acquired from Adivasi, Dalit and "backward" communities at low prices. Families protesting the acquisition were arrested by the police to force the selling of land. The affected families have not been adequately rehabilitated. There has been a violation of Madhya Pradesh Rehabilitation Policy 2002 which stipulates mandatory employment in the project for one person of every displaced family. The rights of people were not recognised according to the Forest Rights Act 2006. There has been acquisition of land without proper consent from gram sabhas (local village communities).

Many families are still located in temporary housing and are still waiting to be moved to a permanent location.


Environmental and climate impacts

Reliance is applying for carbon credits through the United Nations Clean Development Mechanism (CDM), because it is "employing more efficient super critical coal technology." This represents a serious misuse of the CDM which is meant to stimulate investments in clean energy for sustainable development. The CDM Executive Board rejected a similar application for the first UMPP, the Tata Mundra in India. Clearly demonstrating that these projects are not the investments in sustainable development that are so desperately needed.

Although this project has been officially registered with UNFCC's Clean Development Mechanism Executive Board, there are many environmental impacts attached to this project. Ex-Im's initial hesitancy was the first sign of the environmental concerns. As stated by one Exim official: "the board felt that the environmental impact of the facility is such that they could not support it." And went on to say, "we were just looking at the size and scale of this particular transaction and the board feels it is not in good faith to proceed, given the projected adverse environmental impact it would have." There are a range of environmental concerns: from its contribution to climate change through the green house gas emitted through its outdated technological, to the local pollution it will cause:

  • Green house gas emissions: As stated before, UMPPs are coal based power plants that produce around 4,000 megawatt, compared to an average coal plant which produces 500 megawatt, making them some of the largest sources of greenhouse gas emissions in the world. Annual emissions are between 26-27 million tonnes of carbon dioxide for both the mine and local refinery. The plant will emit 832 grams carbon dioxide per kilowatt hour.

  • Local environmental impacts: the pollution from production is likely to affect local water supply which will also have severe impacts on local wildlife. A fact finding mission carried out in 2014, found that plants near the coal conveyor belt contained a thick layer of coal dust. Material from the ash pond is seeping into the soil, contaminating the drinking water supply. Residents in the region have also been complaining of coal dust and coal ash being carried by the wind, affecting their health. 

  • Deforestation: over 7,000 acres of forest land have been diverted for the mines.

Financiers
Institution type
Finance type
Year

After a reversal of an earlier decision to follow its low carbon policy US Ex-Im bank gave approval for USD600 million in loan guarantees. The reversal came with a "compromise" between Reliance and Ex-Im to generate 250 megawatt of renewable energy on site to address low carbon policy concerns.

Other lenders include the State Bank of India, Power Finance Corporation, Rural Electrification Corporation, Punjab National Bank, Life Insurance Corporation, Axis Bank, Union Bank, IDBI, India Infrastructure Finance Company-India, Bank of Baroda, Andhra Bank, Corporation Bank, United Bank, India Infrastructure Finance Company-UK.

Companies

Reliance Power

India
Website
In 2006 Sasan Power Limited (SPL) was incorporated as a wholly owned subsidiary of Power Finance Corporation Limited . The intention was to build, own, operate and maintain the Sasan Ultra Megawatt Power Project at Sasan, Madhya Pradesh. It was transferred to Reliance Power under the provisions of a share purchase agreement dated August 7, 2007 and is now a fully owned subsidiary of Reliance Power.
No companies
Governance
Norms & standards

Applicable norms and standards

1972 Convention on the Prevention of Marine Pollution by Dumping Wastes and other Matters
Alliance for responsible mining
Extractive Industries Transparency Initiative
ILO Safety and Health in Coal Mines
ILO Safety and health in opencast mines
International Council on Mining and Minerals (ICMM)- 10 Principles
OECD Guidelines for Multinational Enterprises
Safety and Health in Mines Convention
United Nations Declaration on the Rights of Indigenous Peoples
Universal Declaration of Human Rights
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Sasan plant may shut down in March for lack of coal: Reliance Power to HC

2018-01-24 | Energyworld
Blog
BankTrack news BankTrack blog Partner news Partner blog

Investing in a Green Belt and Road? Assessing the Implementation of China’s Green Credit Guidelines Abroad

The Chinese government has become an unexpected leader in pushing for new green credit policies, but are Chinese banks doing their part to keep the belt and road initiative green?
2017-12-13 | Friends of the Earth US
BankTrack news BankTrack blog Partner news Partner blog

Reliance Power Sasan mine allocation cancelled

2016-03-11 | The Economic Times
BankTrack news BankTrack blog Partner news Partner blog

India's coal-fueled economy taking a toll on environment and rural villagers

2015-10-15 | Los Angeles Times
BankTrack news BankTrack blog Partner news Partner blog

Ex-Im Bank Inspector General investigating financing of 4,000 megawatt coal project in India

2014-10-21 | Bloomberg
BankTrack news BankTrack blog Partner news Partner blog

Compensatory tariffs case: Should power producers be compensated for rock-bottom bids made earlier?

2014-10-12 | The Economic Times
BankTrack news BankTrack blog Partner news Partner blog

Supreme Court axes 214 coal block allocations, spares four

2014-09-25 | The Hindustan Times
BankTrack news BankTrack blog Partner news Partner blog

MP wants government to allow Reliance Power to mortgage 2 Sasan Coal mining blocks

2014-05-05 | The Economic Times
BankTrack news BankTrack blog Partner news Partner blog

Reliance ready to commission fourth 660 megawatt unit at Sasan UMPP

2014-04-10 | India | Enerdata
BankTrack news BankTrack blog Partner news Partner blog

Niira Radia tapes: CBI lens on Sasan coal block

2013-11-16 | India | Times of India
BankTrack news BankTrack blog Partner news Partner blog

Don’t give into this power game - Ultra mega power projects are not justified in asking for higher tariff.

2013-11-13 | India | Business Line
BankTrack news BankTrack blog Partner news Partner blog

Violence and Intimidation Continue to Plague Opponents of U.S. Supported Indian Coal Plant

2013-09-20 | India | Sierra Club
BankTrack news BankTrack blog Partner news Partner blog

RPower receives Rs 2,550 cr loan tranche from US Exim Bank

2013-04-03 | India Times
BankTrack news BankTrack blog Partner news Partner blog

First unit of 3960 MW project completed in India

2013-04-03 | Power Engineering Int
BankTrack news BankTrack blog Partner news Partner blog

First unit of 3960 MW project completed in India

2013-03-13 | Madhya Pradesh, India. | PEI
BankTrack news BankTrack blog Partner news Partner blog

R-Power’s Sasan project under Exim Bank lens

2012-10-15 | Live Mint
BankTrack news BankTrack blog Partner news Partner blog

Coalgate: CAG reports slam UPA government, BJP demands PM's resignation

2012-08-17 | Times of India
BankTrack news BankTrack blog Partner news Partner blog

UN-backed coal power station linked to deforestation and land grabbing

2011-11-29 | The Ecologist
BankTrack news BankTrack blog Partner news Partner blog

Mundra project not viable: Tata Power

2011-08-09 | India | DNA India
BankTrack news BankTrack blog Partner news Partner blog

Andhra Pradesh at the forefront of Indian 'coal rush'

2011-07-14 | India | Guardian.co.uk
Blog
BankTrack news BankTrack blog Partner news Partner blog

CDM Executive Board dismisses advice to suspend carbon offsetting coal projects

2011-07-14 | Kuala Lumpur | www.stopwarming.eu
Blog
BankTrack news BankTrack blog Partner news Partner blog

Controversial coal projects continue to be registered despite serious concerns over the methodology to be reviewed by CDM Executive Board

2011-07-12 | Washington D.C.
BankTrack news BankTrack blog Partner news Partner blog

Carbon credits for India coal power plant stoke criticism

2011-07-12 | Singapore | Reuters
BankTrack news BankTrack blog Partner news Partner blog

Globalizing the Grassroots Movement Against Coal

2011-05-29 | Countercurrents.org
BankTrack news BankTrack blog Partner news Partner blog

Sasan project to be commissioned four months ahead of schedule

2011-05-23 | India | Projectsinfo.in
BankTrack news BankTrack blog Partner news Partner blog

Reliance Power to commission Sasan Ultra Mega power project's first unit in Jan 2013

2011-04-20 | The Economic Times
BankTrack news BankTrack blog Partner news Partner blog

RPower gets nod for carbon credits

2011-02-04 | India | The Hindu
BankTrack news BankTrack blog Partner news Partner blog

Three banks to support R-Power's Sasan project

2010-12-15 | Mumbai | Business Standard
BankTrack news BankTrack blog Partner news Partner blog

Chinese banks to support Sasan

2010-12-14 | Constructionupdate.com
Blog
BankTrack news BankTrack blog Partner news Partner blog

U.S. Agency votes to finance giant coal plant in India

2010-08-25 | Michelle Chan (Friends of the Earth), Justin Guay (Sierra Club India Program), and Doug Norlen (Pacific Environment Policy Director)
BankTrack news BankTrack blog Partner news Partner blog

U.S. Agency Votes to Finance Giant Coal Plant in India

2010-08-25 | Friends of the Earth
BankTrack news BankTrack blog Partner news Partner blog

It’s not easy being green

2010-07-16 | News week
BankTrack news BankTrack blog Partner news Partner blog

Ex-Im Bank Approves Preliminary Review of Export Financing Application for India''s Sasan Power Plant

2010-07-15 | PTI
BankTrack news BankTrack blog Partner news Partner blog

U.S. Taxpayer-Funded Bank, Under Pressure From Obama Administration, Gives Green Light to Giant Dirty Coal Plant in India

2010-07-15 | Huffington Post
BankTrack news BankTrack blog Partner news Partner blog

US Exim Bank succumbed to Rel Power

2010-07-14 | Financial Express
BankTrack news BankTrack blog Partner news Partner blog

US Exim Bank criticized for providing credit finance to Mega Coal Power Plants in India and Africa

2010-07-14 | Green World Investor
BankTrack news BankTrack blog Partner news Partner blog

It's Tata vs Ambani over Sasan power project

2009-01-05 | India | Rediff India Abroad
BankTrack news BankTrack blog Partner news Partner blog

The World's Billionaires #6 Anil Ambani

2008-05-03 | Forbes
Resources
Documents
Links
2015-09-28 00:00:00

Report on the Project Financing of Sasan Power Limited

Company document
2015-09-28 00:00:00 | Office of inspector general Ex-Im Bank
2014-10-01 00:00:00

The U.S. Export-Import Bank’s Dirty Dollars

NGO document
2014-10-01 00:00:00 | Sierra Club et al.
2014-04-16 00:00:00

Indian Sasan Coal Fired Power Project Factsheet

NGO document
2014-04-16 00:00:00 | Pacific Environment
2014-02-01 00:00:00

Down the Rabbit Hole - What the bankers aren’t telling you!

An Analysis of Lending Practices Adopted by Banks to Finance ‘Developmental’ Projects in India
NGO document
2014-02-01 00:00:00 | The Research Collective - PSA
2013-09-01 00:00:00

Sasan UMPP, Singrauli, Madhya Pradesh

NGO document
2013-09-01 00:00:00 | Anuradha Munshi, Bank Information Centre Trust
2012-08-17 00:00:00

Draft CAG report on Coal Gate

Other document
2012-08-17 00:00:00
2011-06-28 00:00:00

Press release: Reliance power gets approval for carbon credits

Company document
2011-06-28 00:00:00 | Reliance Power
2011-06-27 00:00:00

Environment and Social Impact Assessment

Company document
2011-06-27 00:00:00 | GIS Enabled Environment and Neo-graphic Centre (GreenC)
2011-05-27 00:00:00

Indian Sasan Coal Fired Power Project Factsheet

NGO document
2011-05-27 00:00:00 | Sierra Club
2011-04-27 00:00:00

The Sasan Power Project in MP (Reliance ADAG Group)

NGO document
2011-04-27 00:00:00 | Sierra Club
2011-04-23 00:00:00

United States Export-Import Bank Votes for final commitment on Sasan coal fired power project

NGO document
2011-04-23 00:00:00 | Sierra Club and Pacific Environment
2010-11-29 00:00:00

Green House Gas Emissions - Study report

Company document
2010-11-29 00:00:00 | Sesan Power Limited
2010-11-27 00:00:00

Green House Gas Emissions for Coal Mine

Company document
2010-11-27 00:00:00 | Sesan Power Limited
2010-07-27 00:00:00

Environment and Social Impact Assessment - Part 1

Company document
2010-07-27 00:00:00 | GIS Enabled Environment and Neo-graphic Centre (GreenC)
2010-07-27 00:00:00

Environment and Social Impact Assessment - Part 2

Company document
2010-07-27 00:00:00 | GIS Enabled Environment and Neo-graphic Centre (GreenC)
2010-07-27 00:00:00

Environment and Social Impact Assessment - Part 3

Company document
2010-07-27 00:00:00 | GIS Enabled Environment and Neo-graphic Centre (GreenC)
2010-06-27 00:00:00

Sasan Power Limited transferred to Reliance Power Limited

Company document
2010-06-27 00:00:00 | Reliance Energy Centre
2010-06-27 00:00:00

Environment and Social Impact Assessment Part 4

Company document
2010-06-27 00:00:00 | GIS Enabled Environment and Neo-graphic Centre (GreenC)

Source Watch: Sasan Ultra Mega Power Project

Carbon Market Watch on Sasan

Earth Justice Map of Ecological Conflicts

Sasan pictures by Joe Athialty

Sierra Club website

An Indian Coal Plant's Human Rights Crisis

Sierra Club

How not to conduct an inspection: US Ex-Im visit to the Sasan coal power project

CarbonMarketWatch

Carbon Offsetting Benefit Tracker launched to showcase local reality of CDM projects

CarbonMarketWatch
Updates

2018

2018-01-24 00:00:00 | Sasan plant may shut down in March for lack of coal

The shutdown of the Sasan plant may be imminent. The operation of Reliance Power's 3,960 megawatt power project in Madhya Pradesh may need to shut down if it is not allowed to mine coal in excess of the cap set by the Centre, the company told Delhi High Court today.

2015

2015-05-12 00:00:00 | Reliance Power Sasan mine allocation cancelled

NEW DELHI: The government has issued a gazette notification to cancel allocation of one of the coal mines attached to Reliance Power's Sasan ultra mega power project (UMPP) and withdrawn the permission to use excess coal in two other mines to fire another power plant of the company.

2015-03-30 00:00:00 | Last 660 megawatt unit of Sasan now operational

The Sasan UMPP is now the world's largest integrated coal power plant and coal mining project in a single location in the world. Its sixth and last unit went operational at the end of March, adding another 660 megawatt to bring the total capacity of the power plant to 3,960 megawatt. 

2014

2014-10-21 00:00:00 | Ex-Im Bank investigation financing of Sasan UMPP

The Inspector General of the U.S. Ex-Im Bank has announced that the bank is investigating its financing of the Sasan UMPP. The project has received USD650 million in 2010 from the Ex-Im bank. The announcement comes after the release of a report titled "The U.S. Export-Import Bank's Dirty Dollars" on October 20 by the Sierra Club and 350.org amongst other groups.

2013

2013-09-20 00:00:00 | Violence and Intimidation Continue to Plague Opponents of U.S. Supported Indian Coal Plant

According to Sierra Club: the toll coal makes on communities across India is staggering: 100,000 premature deaths annually, a USD33 billion "coal-gate" scandal, and financial collapse that is pushing plants to the brink of bankruptcy, but only after families have been forcibly evicted to make way for deadly projects. From the outside, Reliance Energy's 4,000 megawatt coal-fired power plant, under construction in Singrauli, appears no different than any other risky coal project in the country. But Sasan received over USD900 million in financing from the U.S. government through the U.S. Export-Import Bank, despite opposition from grassroots groups in India and the U.S.

2013-03-13 00:00:00 | First unit of 3,960 megawatt project completed in India

The Sasan Ultra Mega Power Project has had its first unit commissioned at Madhya Pradesh in India. Reliance Power commissioned the unit as part of the 3,960 megawatt Sasan Ultra Mega Power Project (UMPP).

2012

2012-01-31 00:00:00 | The Chhatrasal mine denied permission for mining

The Chhatrasal mine was denied permission for mining in January 2012 by a committee of the MoEF as over 965 hectare of land of the proposed mine were "good quality forests" and the mine fell within MoEF's No - Go""  30 or inviolate list.

2011

2011-07-12 00:00:00 | Sasan UMPP eligible for carbon credits

The United Nations has ruled that the Sasan UMPP project is eligible for carbon credits (worth at around USD165) under the UN's Clean Development Mechanism.

2011-02-03 00:00:00 | Sasan UMPP registered with CDM-EB

Reliance Power announced that its Sasan Ultra Mega Power Project has been registered with the Clean Development Mechanism Executive Board (CDM-EB) of United Nations Framework Convention on Climate Change (UNFCCC).    

2009

2009-05-28 00:00:00 | Tata Power challenges use of surplus coal Sasan mines for other projects

Early 2009, the Tata Power Company challenged the use of surplus coal from the captive coal mines for other projects of Reliance Power which would allow Reliance to save INR960 crore (USD208 Million) each year due to the INR240 crore (USD52 million) saved for every 1,000 megawatt capacity. Ex-Im financing for this project is therefore subsidizing this illegal use of coal. The Delhi High Court dismissed a petition on April 14 2009. However Tata Power has said the company will appeal the decision in the Supreme Court.

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