Private Sector


New CAO Kamalanga report: five years of IFC non-compliance

10 February 2016

In January, the Compliance Advisor Ombudsman (CAO), the accountability mechanism for the International Finance Corporation (IFC, the World Bank’s private sector arm) released the findings of its investigation of the IFC’s investment in the Kamalanga power plant in the Indian state of Odisha (see Update 76­). The investment was made through a financial intermediary (FI), India Infrastructure Fund. CAO’s damning finding is the latest step in a process that began in 2011 when Indian NGO Delhi Forum and grassroots organisations Odisha Agriculture and Environment Protection Council (OAEPC) submitted a letter to the CAO outlining a series of serious complaints about the project.

CAO’s investigation found “shortcomings in the IFC’s environmental and social due diligence prior to investing” and that the “IFC lacked a basis to conclude that its investments … could meet the requirements of the IFC performance standards”. CAO added that the “key concerns regarding the impacts of the power plant, as raised by the complainants, had not been addressed” and observed “that the power plant had transitioned from construction to operation, increasing the risk of irreversible, adverse impacts on the complainants.” Reacting to the CAO’s report in Indian newspaper Business Standard, Amulya Nayak from OAEPC, said: “The CAO report has reaffirmed our fear that the IFC has almost no ability or will to ensure client’s compliance with its E&S [environmental and social] requirements in the case of FI lending.”