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Green groups oppose World Bank funding for Tata’s Mundra plant

Green groups oppose World Bank funding for Tata’s Mundra plant
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First Published: Tue, Apr 08 2008. 10 54 PM IST
Updated: Tue, Apr 08 2008. 10 54 PM IST
Washington: Environmental groups called on the World Bank to delay a decision on Tuesday on funding for a $4.2 billion (Rs16,800 crore) coal-fired power plant in India until more analyses of costs and environmental impact are done.
In a letter to the US representative at the World Bank, Whitney Debevoise, six environmental groups said the bank could not effectively fight climate change while also funding high carbon-emitting projects, such as the 4,000MW one in Mundra in Gujarat.
The International Finance Corp. or IFC, the bank’s private-sector lender, said its $450 million proposed funding for the project was in response to India’s enormous need for more and affordable electricity. It also said the coal plant, being developed by Tata Power Co. Ltd, India’s largest private-sector power firm, would use new “super-critical” technology, which cut carbon emissions by 40% compared with other plants in the country.
The project is likely to provide electricity to 16 million users in five states in western and northern India.
“The key is access to power and there are many poor people who still don’t have access to power in India and it is getting them power as inexpensively as possible by using responsible technology,” Rashad Kaldany, IFC head for global infrastructure, said. A Tata Power spokesperson declined to comment on the matter.
The environmental groups argue that the Mundra region has huge solar potential, while coal for the project would need to be imported from Indonesia and other countries at rapidly rising costs.
They added that coal’s previous cost advantages have largely vanished with rising prices, while fuel and construction costs for “super-critical” coal-fired power plants have escalated.
Kaldany said IFC had thoroughly evaluated the project and concluded that a coal plant was by far the least expensive option at this stage to meet India’s 160,000MW power needs over the next decade.
He said IFC analysis also looked at alternatives including wind technology, which would have meant an investment of about $24 billion.
Kaldany said carbon emissions from the Mundra plant would be large at 23 million tonnes (mt) per year of carbon dioxide, but less than 27mt emitted by current plants.
Carbon capture and storage technology, which absorbs planet heating carbon dioxide and stores it safely underground, is not yet available for power plants, he said.
“Emerging markets and developed markets are facing this conundrum—the technology is not ready or is hugely expensive, which begs the question: Who is going to pay? It is fine for developed country to impose additional costs on itself but for the poor country it is not obvious to impose that additional cost on them,” Kaldany added.
A staff writer also contributed to this story.
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First Published: Tue, Apr 08 2008. 10 54 PM IST