In a major setback to investments in Himachal Pradesh, the World Bank has decided not to lend financial assistance to the massive luhri Hydro Power project on Sutlej River in Himachal Pradesh.
The World Bank, which was to provide a huge US$ 650 million to the US$ 1150 million project, on its website now indicates the status of the project as ‘DROPPED’. Environmental groups and local affected people under the banner of ‘Sutlej Bachao Jan Sangharsh Samiti’ consider this as a major victory for the campaign to save the last remaining stretch of “free” flowing river Sutlej.
The decision of the World Bank comes subsequent to an appraisal by the USAID team, which had been commissioned to review the environmental and social impacts of the project. The team visited India in November-December 2013 and interacted with all stake holders including the project developer SJVN ltd, World Bank, affected people from the affected villages and concerned non government organisations like Himdhara Collective in Himachal Pradesh and SANDRP in Delhi.
Even at this stage, in a meeting in December 2013, the World Bank reportedly defended their decision to support the project. The USAID trip report is still under internal review, likely to be finalised in a couple of months. However, from sources in Washington it is apparent that the World Bank had dropped the project due to the local community opposition.
The bank had apparently done an intensive review of the project (which must have included USAID trip), and when USAID wanted to discuss the project with the bank in Washington, the Bank told them that they had dropped it.
However, to avoid the embarrassment of the World Bank withdrawal, Union Government decided to withdraw the application, similar to in 1993, when the World Bank decided to pull out of Sardar Sarovar Project.
On April 10, 2014, SANDRP received an email from the World Bank official concerned with this project, Kwawu Mensan Gaba confirming, “I would like to confirm that the project was dropped in January 2014 at the request of GoI.”