World Bank Statement on Request to the Inspection Panel Regarding the Vishnugad Pipalkoti Hydro Electric Project

January 10, 2013

Updated Jan. 25, 2013

The Inspection Panel is the World Bank’s independent accountability mechanism. Individuals or communities may bring complaints to the Inspection Panel if they believe that they have been, or are likely to be, adversely affected by a World Bank-financed project as a result of the Bank’s non-compliance with its internal policies and procedures.

Several individuals living in the vicinity of the Bank-financed Vishnugad Pipalkoti Hydro Electric Project (VPHEP) contacted the World Bank’s Inspection Panel, alleging that the Bank’s operational policies and procedures were not followed in its assessment of the possible impacts of the project and that they believe they could be adversely affected as a result of this. They filed a Request for Inspection of the VPHEP (“Request”).

The World Bank believes the VPHEP is a sustainable hydropower project with manageable impacts that have been thoroughly assessed and for which appropriate mitigation measures are prepared. The project has been prepared in accordance with Indian statutory requirements and has demonstrated several good practices that have been recognized by the National Green Tribunal and can be incorporated into similar hydropower projects. However, there are individuals who believe they have suffered or are likely to suffer harm from VPHEP due to the Bank’s alleged non-compliance with its policies. They are entitled to request a review of their allegations through the Inspection Panel, the World Bank’s independent accountability mechanism.  

The Inspection Panel considered the formal eligibility of the Request and submitted its recommendation (the “Eligibility Report”) to the World Bank’s Board of Executive Directors. The Eligibility Report details the Panel’s assessment of the formal eligibility of the Request, based on a set of criteria as established by the Bank’s Board. It is important to note that in its Eligibility Report the Inspection Panel cannot cast any judgment on the merits of the Request or any of its specific claims and that it is merely a finding by the Inspection Panel to the Board regarding the Request’s formal eligibility and a recommendation regarding whether the Request is sufficient to warrant an investigation.

The World Bank’s Board of Executive Directors considered the Eligibility Report and approved an investigation to be conducted after March 15, 2013. The Inspection Panel will review the Requesters’ claims to the extent to which they concern potential or actual adverse impacts stemming from the Bank’s non-compliance with its operational policies. The Panel will then submit an Investigation Report, which the Bank’s Board will consider jointly with a detailed Bank Management Response to the Panel’s findings, including possible remedial efforts, if warranted. This process is not time-bound and has taken between 6 and 12 months in past cases.

A Request for Inspection does not necessarily indicate a failure or grave problem in the project preparation and/or implementation. Many projects that have been subject to a Panel investigation have been successfully implemented. It is important to note that any two individuals who believe they are or may be adversely impacted by a World Bank-financed project can access the Inspection Panel and request an Inspection of the Bank’s compliance with its policies. At this stage, the Panel’s acceptance of such a Request for inspection is based on formal eligibility criteria and does not imply any judgment on the merits of the request.

The Vishnugad Pipalkoti Hydro Electric Project

VPHEP is being financed by a $648 million loan from the World Bank. The Bank’s Board of Executive Directors approved the Project for financing in June 2011 and the loan became effective in November 2011. 

VPHEP is a run-of-river hydropower generation plan on the Alaknanda River in Uttarakhand that will on completion generate an estimated 1,665 million kilowatt-hours of electricity each year to help relieve India’s chronic power shortage. The 444-megawatt project will also help reduce India’s greenhouse gas emissions by 1.6 million tons each year, compared to a thermal plant of the same capacity. 

The major construction work for the project has not begun. The Second Stage Forest Clearance by the government of India needs to be obtained before the construction works can begin. The Inspection Panel’s investigation process will not affect the construction schedule of the project or other implementation activities, such as those relating to the Environment Management Plan and the Resettlement Action Plan.

The project will build a 65-meter diversion dam near Helang village in Chamoli district to create a small daily pondage in the Alaknanda River. No village, house or field will be submerged by this reservoir, as the Alkananda flows through a deep, uninhabited gorge at this point.  A 13.4-kilometer headrace tunnel will carry the water to an underground powerhouse near Haat village to generate the power. A 3-km tail race tunnel will return all the diverted water back to the Alaknanda, approximately 18 km downstream from where the water was diverted. A minimum flow of 15.65 cumecs of water will be left in the project stretch of the river at all times to sustain the aquatic health of the river. This is equivalent to approximately 45 percent of the average lean-season flow of the river.

Given the topography of the project area -- the Alaknanda flows through a deep gorge and villages are located much higher than the waterline -- VPHEP has limited land-acquisition impacts on local communities. Less than one-fifth of the 141.5 hectares required for the project is being acquired from private landowners; most of the land to be acquired for the project is government or forest land. Some 265 families will be relocated as a consequence of land acquisition, but 242 (or 92% ) of these are families from Haat village who voluntarily chose to move. 


Media Contacts
In New Delhi
Sona Thakur
Tel : +91-11-2461-7241
or +91-98-1804-0410