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Home › Dodgy Deals ›
Dodgy Deal
Tata Mundra Ultra Mega Power Plant (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This profile is no longer actively maintained, with the information now possibly out of date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: 2020-07-01 17:12:24
Tata Ultra Mega Power Project. Photo: Sami Siva / ICIJ via Flickr (CC BY SA 2.0)

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This profile is no longer actively maintained, with the information now possibly out of date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: 2020-07-01 17:12:24
Why this profile?

What must happen

Financiers of the Tata Mundra project should:

1. Recognize the serious impacts of their financing after World Bank CAO audit reconfirmed community's complaint;

2. Develop a remedial action plan that has a clear timeline, specific targets and monitorable indicators that address restoration and reparation needs; and

3. Withdraw their funding immediately from the Tata coal plant and not consider funding any project expansion.

About
Sectors Coal Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website http://www.tatapower.com/cgpl-mundra/home.aspx
This project has been identified as an Equator Project

The first of 16 Ultra Mega Power Projects (UMPPs) to be commissioned in India, the Tata Mundra UMPP is located in Tunda village at Mundra, in the Kutch district in Gujarat. The power plant is fuelled by sub-bituminous coal, imported primarily from Indonesia. The power plant is owned by Tata Power. It has a total installed capacity of 4,000 megawatt. It consists of five units generating 800 megawatt of electricity each. Given that the average coal plant produces around 500 megawatt, this plant represents a huge source of greenhouse gas emissions. The project has also been marred with serious social as well as environmental impacts.

Impacts

Social and human rights impacts

A number of social impacts have been outlined by the eminent fact-finding mission which visited Mundra in April and May 2012, reported in the Real Cost of Power.

  • Adequate, meaningful, and informed consultations with the affected communities were not conducted. The communities repeatedly complained about the lack of consultation before the project started and failure to share key information about the impacts and mitigation plans.
  • The project has caused drastic reduction in fish catches, destroying the livelihoods of local fisher-folk. Available fish-catch data indicate considerable reduction in fish catch in the past three years since the adjacent Adani plant was commissioned, which has been exacerbated by the partial commissioning of Tata Mundra. Communities fear total loss of aquatic wealth when the project is fully operational, along with their livelihoods as fisher-folk.
  • The project blocked access to fishing and grazing grounds. Access roads for local fisher-folk and pastoralists to fishing and grazing grounds have either been blocked or diverted, forcing villagers to take an unusually long route and pay more for their transport, and resulting in considerable delay for women returning from the markets after selling fish.
  • The project failed to thoroughly examine or adequately address the health and environmental impacts of ash contamination. The partially-operational plant is already contaminating drying fish, salt, and animal fodder in the area, causing significant health concerns. Salt contamination has been demonstrated to cause an increase of diseases and abnormal abortions in cattle. Further, heavy metals contained in toxic coal ash such as cadmium, lead, selenium, and mercury are known to bio-accumulate in animal and human bodies.
  • CGPL forced a massive financial burden on its consumers. In 2014 CGPL petitioned the CERC, the government regulator, to be compensated for the increase in imported fuel price, allowing them to increase their tariffs by 27%. This has the potential to have a cascading effect on consumers in India if other power plants follow suit.
  • Insufficient social baseline data for E&S assessments according to IFC policies.Therefore the risk and impact of the project on the local fisher people could not be determined correctly. People have been displaced both in physical terms and in economic terms due to improper application of land acquisition policies.
  • Insufficient attention was given to local fishworkers. The local fishworkers are from a religious minority and occupy a marginal position in society given their migrant traditions. The impact of the project was not adequately considered during the E&S assessments of this project.

Women's safety, security and free access to their livelihood sources have been obstructed. Communities constantly complain about the presence of a large migrant labour force being a cause of women's safety concerns.

In fishing families, women work alongside men, in sorting, drying, and often taking the products to the market. Thus, free and safe access for women to all these areas is a precondition to their daily life and enterprise. In several fishing settlements around the Tata Mundra plant, the issue of local women not being allowed to enter some areas was reported to the fact-finding team by these women themselves.

The name of Tata's/CGPL's Korean Colony came up on a number of occasions, as a place unsafe for women and where incidents might have happened. Since the Tata Mundra UMPP is using many Korean-supplied machinery, there is a settlement of Korean workers. Some men also raised the issue of the presence of a large migrant labour force being a cause of concern for these women's safety. Instead of taking corrective measure in this regard, the company has decided to ban local women from entering some areas.


Environmental and climate impacts

Environmental impacts were also outlined by the fact-finding mission and reported in 2012 by BIC in the Real Cost of Power.

  • Massive contribution to global warming: The total greenhouse gases emission from the Tata Mundra plant, based on Ernst and Young's estimated baseline CO emissions for the project, would be 30.796 million tonnes per year (baseline value), which would make it India's third largest emitter of greenhouse gases. This would significantly increase the atmospheric carbon load, and put further pressure on already vulnerable communities.
  • The project violated its environmental clearance by destroying inland ecosystems. Large stretches of mangroves, dry-land forests, and biodiversity-rich creeks were destroyed for the construction of the inlet and outfall channels and other associated activities of the project. The team could not find the required forest clearance for this destruction, which the company refuses to own up to.
  • The company was not required to conduct and/or disclose chemical pollution studies. The IFC and ADB failed to require the company to conduct and/or disclose chemical pollution studies. This harm warrants further, in-depth investigation.
  • The project violated its environmental clearance by adopting a one-through cooling system. The project was permitted for a closed-cycle cooling system, but installed a cheaper, more environmentally-destructive one-through cooling system.
  • The project ignored the potential impacts of radioactivity from the coal ash pond. Independent readings taken as far as 400 meters away from the ash pond recorded radiation levels that were double those found in the villages. While this reading is about half the permissible limit, the project is only one-fifth operational, with four more units planned. None of the impact assessments have addressed this.

Other impacts

  • The Environmental and Social Impact Assessments filed by the company were deficient. The company failed to account for significant social, economic, and environmental damages caused by the project in its EIA and SIA. It even neglected to identify certain communities as project affected. For example, the EIA states that the project covers 1,254 hectares of "vacant land", whereas in fact the area has a high rural population density, and the land has supported multiple rural economic activities, fishing, fish-drying, animal-grazing being the main ones, for many decades. It is highly ecologically sensitive. The impact assessments were not carried out independently, but by a Tata-owned venture, TCE Consulting Engineers, impacting their credibility substantially.
  • The IFC and ADB failed to require the company to conduct a cumulative impact study. The project, sited in the vicinity of several other large-scale polluting industries, will have significant cumulative impacts on the local population and environment, yet no cumulative impact assessment has been performed.
  • The IFC has failed to respond to CAO findings. In response to the weak IFC response to the CAO findings, human rights and environmental activists from over 28 countries have come together to sent an open letter to President Kim, urging him to immediately withdraw from the project. In April 2014 MASS has handed over an additional 24,000 signatures to the executive directors of the World Bank.  

The impacts noted above by the fact-finding team were found at a time when only one unit of the 4,000 megawatts plant was operational. Now that all units of the project are on stream, the impacts are manifold, and according to a follow-up report by a member of the fact-finding team, are not being monitored by either the Tata or the Government. For example, an increase of 20% of severe respiratory diseases among children in the villages near to the Mundra plant has been reported by a local doctor. Coal dust and fly ash is putting the lives of people and that of animals and horticulture at risk.

Financiers

The debt portion of the project, originally planned at USD 3 billion, was secured by Coastal Gujarat Power in April 2008 through a five-tranche amortizing loan for a total of INR143.8 billion (USD2.93 billion). All tranches have maturity terms of up to 20 years. SBI Capital Markets, a subsidiary of the State Bank of India, acted as lead arranger of four of the tranches, BNP Paribas acted as lead arranger for one tranche. It was one of the largest deals in the Asia-Pacific regions for which BNP Paribas acted as lead arranger in 2008.

Commitments of the following banks; State Bank of Bikaner & Jaipur, State Bank of Hyderabad and State Bank of Travancore. State Bank of Indore could not be identified but took part in the first tranche of the loan. According to the Thomson financial database BNP Paribas and the Export-Import Bank of Korea were also lenders for this tranche.

Institution type
Finance type
Year
Companies

Tata Power

India
Website
Sole owner of the power plant, through its subsidiary Coastal Gujarat Power Ltd (CGPL).
No companies
Governance
Norms & standards

Applicable norms and standards

International Finance Corporation Performance Standards - 2012 Edition
OECD Guidelines for Multinational Enterprises
News
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External
BankTrack news BankTrack blog Partner news Partner blog

Tata Mundra: NGOs worry as US court rules World Bank can't be sued for 'damages'

2020-08-31 | Counterview
BankTrack news BankTrack blog Partner news Partner blog

Farmers and Fishermen to Challenge World Bank Group Immunity Ruling

Damages sought for funding Tata Mundra power plant
2020-02-18 | EarthRights International
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Banks under pressure to stop financing coal as climate alarm grows

2019-10-07 | The Telegraph
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Adani losses prompt mining company to shift away from imported coal

2018-05-07 | The Guardian
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Adani Loses Nearly All Its Investment On Mundra Power Plant

2017-09-04 | Bloomberg
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Indian Communities ask U.S. Court of Appeals to hold World Bank Group Accountable

2016-08-11 | Masskutch.blogspot
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The Tata Mundra coal plant – seven controversial years and one Pinocchio award for BNP Paribas

2015-12-08 | BankTrack Blog
Blog
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BNP Paribas coal finance impacts earn Pinocchio Climate Award from the public

2015-12-04 | Paris, France | BankTrack and Les Amis de la Terre
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COP21 : en Inde, vivre au milieu des centrales à charbon

2015-11-13 | France Info
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Lawsuit accuses World Bank arm of "mission failure"

2015-04-23 | ICIJ
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CAO to continue monitoring Tata Power's Mundra project

2015-02-22 | The Economic Times
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The IFC Reveals Its True Colors: No Accountability For Project Violations

2015-01-30 | Sierra Club
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Tata Mundra: World Bank Group's Guide to Breaking Your Own Rules

2015-01-26 | Huffington Post
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Tata Power may not source coal from Indonesia for Mundra

2014-11-30 | Business Standard
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Delhi Metro, Mundra UMPP among 6 Indian projects in KPMG markets report

2014-11-13 | The Hindu Business Line
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Tata Power may soon divest over $1 bn stake in Indonesian mines

2014-09-09 | Business Standard
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Tata Mundra power project denied expansion clearance

2014-09-03 | The Hindu
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Power producers seek talks on compensatory tariff issue

2014-09-02 | Business Standard
Blog
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BNP Paribas results disastrous for climate and taxation, say campaigners at today’s AGM

2014-05-15 | Paris | Les Amis de la Terre
BankTrack news BankTrack blog Partner news Partner blog

Tata Mundra Surveys global opportunities

2014-05-09 | The Economic Times
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Doubts raised over financial viability of Galilee Basin coal mine proposal

2014-05-06 | The Sydney Morning Herald
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Australian coalmining is entering ‘structural decline’, reports says

2014-05-05 | The Guardian
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India unlikely to be able to afford Australian coal

2014-05-05 | ABC
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Press release – The beginning of the end of imported coal in India: report exposes economic flaws

2014-05-05
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IFC Won't Support Expansion of Disastrous Tata Mundra Project

2014-05-01 | The Huffington Post Blog
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BNP Paribas: the bank for a changing climate

2014-04-14 | Banktrack Blog
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Compensatory tariff issue: PSPC approaches APTEL

2014-04-12 | Hindustan Times
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States to go to tribunal on compensation to Adani, Tata

2014-03-20 | Business Standard
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States to go to tribunal on compensation to Adani, Tata

2014-03-20 | Business Standard
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Tata Mundra: IFC’s Action Plan on CAO report is empty, is a non-starter

2014-03-04
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Statement of Machimar Adhikar Sangarsh Sangathan on the CERC order on tariff revision of Tata Mundra project

2014-02-25
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States may challenge CERC’s bailout package

2014-02-23 | Livemint
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Adani, Tata Power get tariff relief

2014-02-23 | Sify
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States may challenge CERC’s bailout package

2014-02-23 | Live Mint
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After World Bank, Asian Development Bank to Investigate Tata Mundra

2014-01-23
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After World Bank, Asian Development Bank to Investigate Tata Mundra

2014-01-23 | Masskutch Blog
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Civil Society Calls the Bluff of World Bank Accountability

2013-12-17
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President Kim Responds to Civil Society’s Concerns on Private Sector Investments

2013-12-09 | The World Bank
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World Bank courts controversial coal in India and Indonesia

2013-12-03 | Brettonwoods Project
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Local Gujarati group sends letter to Dr. Kim urging withdrawal from Tata Mundra

2013-11-18 | BIC
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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
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Grassroots Activists Across the Globe Condemn World Bank President’s Continued Support of Tata Mundra Coal Plant

2013-11-07 | Sierra Club
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Over 100 Organizations demand World Bank withdrawal from Tata Mundra

2013-11-04 | BIC
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Dr. Kim Sweeps World Bank Policy Violations on Controversial Tata Mundra Coal Plant Under the Rug

2013-10-24 | Huffington Post
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CAO found IFC made serious lapses in funding Tata coal plant; President Kim rejects expert findings, thwarts further action

2013-10-24 | BIC
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Dr. Kim Sweeps World Bank Policy Violations on Controversial Tata Mundra Coal Plant Under the Rug

2013-10-24 | Huffington Post
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Tata Power mulls sale of investments, equity raising to cut debt

2013-10-22 | Reuters
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Tata Power Says Creditors Agree to Extend Waivers on Loan Terms

2013-09-05 | Bloomberg
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Tata Power posts loss in Q1

2013-08-06 | The Hindu
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Severe Impacts Undermined, while Tata Mundra Project seeks expansion

2013-07-18 | Intercultural Resources
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Tata Power seeks to avoid fines on $2.3 billion loans

2013-07-16 | Live Mint & the Wallstreet Journal
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Tata Power to expand Mundra ultra mega project capacity

2013-05-28 | http://www.thehindubusinessline.com/companies/tata-power-to-expand-mundra-ultra-mega-project-capacity/article4759474.ece | The Hindu Business Line
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Tatas allowed to hike tariff for power generated from Mundra plant

2013-04-15 | The Hindu
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Tata Mundra Coal Review Test of Dr. Kim's Commitment to Protecting Health, Environment

2012-11-27 | Sierra Club India
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Tata Mundra Project to undergo a full audit by the CAO

2012-08-06 | BIC
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IFC audit arm to probe Tata’s Mundra project

2012-08-06 | The Indian Express
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Kutch fishermen’s plaints prompt soul-searching in World Bank arm

2012-08-05 | The Indian Express
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Eminent Panel finds serious social and environmental violations in Tata Mundra Project

2012-07-03 | Bank Information Centre
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Mundra project not viable: Tata Power

2011-08-09 | India | DNA India
Resources
Documents
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Links
2017-05-03 00:00:00

Stop coal financing in the Asia Pacific

50 years of the Asian Development Bank
NGO document
2017-05-03 00:00:00 | Friends of the Earth Asia-Pacific
2015-05-13 00:00:00

BNP Paribas Coal Bank Briefing 2015

English version
BankTrack publication
2015-05-13 00:00:00 | BankTrack, Les Amis de la Terre
2015-01-20 00:00:00

IFC response to CGPL Monitoring Report

Other bank document
2015-01-20 00:00:00
2015-01-14 00:00:00

CAO CGPL Monitoring Report

Other bank document
2015-01-14 00:00:00
2014-05-05 00:00:00

Indian Power Prices

Briefing Note
NGO document
2014-05-05 00:00:00 | IEEFA
2013-10-25 00:00:00

IFC Statement and Action Plan

Other bank document
2013-10-25 00:00:00 | IFC
2013-10-24 00:00:00

MASS’ Response

Other bank document
2013-10-24 00:00:00 | MASS
2013-09-12 00:00:00

IFC response to CAO Audit Report

Other bank document
2013-09-12 00:00:00 | IFC
2013-09-12 00:00:00

IFC Response to Compliance Advisor Ombudsman

Other bank document
2013-09-12 00:00:00 | IFC
2013-08-22 00:00:00

CAO Audit of IFC Investment in Coastal Gujarat Power Limited, India

Key observations and findings
Other bank document
2013-08-22 00:00:00 | CAO, IFC
2013-08-22 00:00:00

CAO Audit of IFC Investment in Coastal Gujarat Power Limited, India

Other bank document
2013-08-22 00:00:00 | Compliance Advisor Ombudsman, International Finan ce Corporation
2013-07-01 00:00:00

The Increasing Human Cost of Coal Power

Supplementary Report to the ‘Real Cost of Power’
NGO document
2013-07-01 00:00:00 | Soumya Dutta
2013-04-16 00:00:00

Tata Mundra – Public Bailout for Expensive, Destructive Boondoggle

NGO document
2013-04-16 00:00:00 | Sierra Club
2013-03-12 00:00:00

Coal Kills

An Assessment of Death and Diseasecaused by India’s Dirtiest Energy Source
NGO document
2013-03-12 00:00:00 | Urban Emissions in partnership with the Conservation Action Trust and Greenpeace India
2012-12-10 00:00:00

Letter from MASS to BNP Paribas

Correspondence
2012-12-10 00:00:00 | MASS
2012-10-24 00:00:00

Terms of reference for auditof IFC

Other bank document
2012-10-24 00:00:00 | CAO - Compliance Advisor Ombudsman
2012-08-17 00:00:00

Draft CAG report on Coal Gate

Other document
2012-08-17 00:00:00
2012-06-01 00:00:00

The Real cost of Power

Report of the Independent Fact-Finding Team on the Social, Environmental, and Economic Impacts of Tata Mundra Ultra Mega Power Project, Kutch, Gujarat
NGO document
2012-06-01 00:00:00 | National Fishworkers Forum
2011-06-11 00:00:00

Complaint regarding Tata UMPP

To the Office of the Compliance Advisor/Ombudsman (CAO) of the IFC
NGO document
2011-06-11 00:00:00 | Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers’ Rights)

Area surrounding Tata Mundra power station

2015-03-05

Les Amis de la Terre

2014-04-15

Tata Mundra UMPP

2013-07-31

Dr. Bharat Patel: World Bank Funded Tata Mundra Power Plant, India

General Secretary of Machimar Adhikar Sangharsh Sangathan (MASS) -- or the Association for the Struggle for Fishworkers' Rights - presented his case regarding the Tata Mundra coal-fired power plant funded by the World Bank at a press breakfast held at Hotel Lombardy in Washington, D.C. While the aim of the World Bank is to alleviate poverty, the coal-fired power plant is creating a harmful environment for locals and destroying livelihoods.
2015-03-05 11:55:51

SourceWatch Tata Mundra project webpage

Profile of the Tata Mundra project as part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy.

Wikipedia Mundra UMPP webpage

Wikipedia webpage of the Tata Mundra project.

CAO complaint by Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers’ Rights)

CAO (the IFC's compliance ombudsman) page relating to the complaint made in 2011

BiC Tata Mundra Power Plant webpage

Tata Mundra project webpage of the Bank Information Center.

IFC Tata Ultra Mega webpage

Tata Mundra project webpage in the International Finance Corporation Projects Database.

Petition - Recognise policy violations in the TATA Mundra plant.

Twitter action - Ask Jim Kim

Facebook: Wake up Kim

Call to IFC President to take action on Tata Mundra

Mass Blog

Sierra Club on Tata Mundra

Tata Mundra pictures by Joe Athialty

ADB Compliance Review Panel page on Tata Mundra

IFC additional info pages on Tata Mundra

EarthRights International webpage on Tata Mundra

On the legal compliant from local communities against the IFC.

Pinocchio award for BNP Paribas

Chevron, EDF and BNP-Paribas crowned climate Pinocchios of 2015

BNP Paribas finance la centrale très controversée de Tata à Mundra en Inde

Video, source: www.francetvinfo.fr

BankTrack blog

Updates

2020

2020-06-27 00:00:00 | Tata Power one step closer to tariff revision at Mundra power plant

The Maharashtra State Electricity Distribution Company (MSEDCL) has received the go-ahead from the state government to revise tariffs for Tata Power’s Mundra unit, according to people in the know.

2020-03-19 00:00:00 | Tata Power threatenes to shut its loss-making Mundra coal-fired power plant

Tata's Coastal Gujarat Power (CGPL) subsidiary, which operates the plant, has already served closure notices to five Indian states that buy electricity from the plant, seeking amendments to long-term electricity supply contracts to pave the way for tariff revisions. Of the five states only Gujarat has approved the amendment to its 2007 supply contract. Haryana, Rajasthan, Punjab and Maharashtra states have not made a decision.

The Mundra plant has been running at a loss after a 2012 regulatory change in Indonesia required suppliers to sell coal at a regulated benchmark price, which raised Tata's coal costs. The steep increase in costs prompted Tata to petition India's power ministry, approach the Central Electricity Regulatory Commission (CERC) and take court action to try and resolve the issue while also engaging with the relevant states. 

2015

2015-12-29 00:00:00 | Tata Power refinances loan for Mundra project

Tata Power said it has refinanced INR3,864 crore (USD573 million) loans for its 4,000 megawatt Mundra ultra mega power project (UMPP) in Gujarat which will help the plant save around INR77 crore a year in interest cost [...] Axis Bank has joined as a new lender to the existing rupee lenders consortium, pursuant to the refinancing exercise, in line with the regulations, the filing said.

2015-12-03 00:00:00 | Chevron, EDF and BNP-Paribas have been awarded Pinocchio Climate Awards for their roles in undermining climate action and harming local communities

Climate talk sponsor BNP-Paribas was awarded its prize for financing coal around the world, including huge coal-fired power plants in South Africa and India. EDF received the award for using its controversial sponsorship to brand nuclear power as a "clean" energy source and for its continued investments in fossil fuels, with 16 coal power plants worldwide, including some of the dirtiest in Europe.

2015-09-10 00:00:00 | BNP Paribas finance la centrale très controversée de Tata à Mundra en Inde

Complément d'enquête" du jeudi 10 septembre 2015 s'est penché sur les noirs investissements des entreprises françaises à l'étranger. EDF, Engie, ex-GDF Suez, mais aussi les banques françaises, telle BNP Paribas, font des placements dans le charbon. Leur pays de prédilection : l'Inde

2015-04-23 00:00:00 | Communities Suffering from Destructive Coal Plant Sue the International Finance Corporation in U.S. Federal Court

Fishing communities and farmers from India, represented by Earthrights International filed a suit against the IFC. Earthrights allegations are that the IFC caused the loss of the livelihoods of these communities, destroyed their land and water and created threaths to their health by funding the Tata Mundra coal-fired power plant. The lawsuit is seeking compensation for harm to property and economic livelihoods, and asks the court to order the IFC to enforce the provisions of the loan agreement which were intended to protect local communities and the environment to minimize future harm. This lawsuit marks the first time a community harmed by a World Bank Group project has filed a suit. For more information see Earthrights International.

2015-01-22 00:00:00 | Report by the Compliance Advisor Ombudsman

One year after his audit report which listed a number of serious violations of the IFC's policies while financing the Tata Mundra project, the Compliance Advisor Ombudsman published a monitoring report finding that the actions undertaken by IFC are insufficient. This new report states that IFC has failed to address the key points raised by the CAO report. In response to the monitoring report, MASS, the Association for the Struggle for Fishworkers Rights, demands World Bank President Jim Kim to withdraw IFC financing from the Tata Mundra UMPP project. MASS already rejected the IFC's action plan in 2013 and states that this once more confirms that it was indeed "non-serious and non-committal". Read more.

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