IFC withdraws funding for waste-to-energy incinerators in Gujarat: A win for civil society

By Jag Jivan   

In a significant victory for environmental activists and local communities, the International Finance Corporation (IFC), the private lending arm of the World Bank, has decided not to invest in the proposed $40 million funding for waste-to-energy (WTE) incineration plants in Gujarat, India. The decision comes after strong opposition from civil society organizations, which highlighted concerns over pollution, health risks, and violations of sustainable waste management practices.

The funding was intended to support Abellon Clean Energy Limited (ACEL) in building four WTE incinerators in Rajkot, Vadodara, Ahmedabad, and Jamnagar, processing 3,750 tons of unsegregated municipal solid waste daily. However, opposition groups, including 174 networks of activists worldwide, raised concerns that the project would worsen air and water pollution, endanger public health, and undermine India’s environmental regulations.

"We were initially told that these plants would convert waste into power, but instead, they have increased pollution and health issues in our communities," said Ker Jayendrasinh, an activist in Jamnagar. Another activist, Asmita Chavda from Ahmedabad, expressed relief at IFC’s decision but called for broader action: “This is a major victory, but other financial institutions must follow IFC’s lead and stop funding harmful WTE projects.”

Financial concerns also played a role in the IFC’s withdrawal. ACEL has been struggling with mounting losses, with its net profit falling from ₹11.1 crore in 2021 to a ₹19 crore loss in 2023. The company’s inability to cover its loan interest payments further raised doubts about its economic viability.

Environmental advocates now urge India’s Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (IREDA) to reconsider their loans to ACEL. "This is an opportunity to shift towards more effective and sustainable waste management strategies," said Jay Vyas, an activist from Vadodara.

While the IFC’s decision marks a victory for environmental justice, campaigners emphasize that the fight is not over. They are calling for a complete shutdown of polluting WTE plants and a transition to decentralized, eco-friendly waste management solutions.