The World Bank has decided not to invest in four waste-to-energy plants in Gujarat after opposition from local communities and environmental groups, civil society group Alliance for Incinerator Free Gujarat said on Thursday.

In a press release, the group said that the International Finance Corporation, which is the private lending arm of the World Bank, had been considering granting a $40 million loan to help Abellon Clean Energy Limited build four such plants in Rajkot, Vadodara, Ahmedabad and Jamnagar.

Abellon Clean Energy Limited, an Indian company, specialises in waste-to-energy technology, which involves incinerating urban and agricultural waste to generate electricity. At the moment, only the waste-to-energy incineration plant in Jamnagar is operational.

All four plants are proposed to cumulatively burn 3,750 tons of unsegregated municipal solid waste daily, the press release said.

However, the disclosure on the proposed investment in Abellon Clean Energy Limited released by the International Finance Corporation alarmed communities living near the project in the four districts and environmental groups, the release added.

On June 26, 2024, the communities affected by the project wrote a letter to the executive directors of the World Bank challenging the proposed funding.

They also raised complaints with the Stakeholder Grievance Response Team of the International Finance Corporation and presented the impact of the plants to the United States Treasury in July 2024, according to the release.

“Furthermore, the community spearheaded an international campaign in which 174 networks, civil society organisations, activists, and communities from across the globe strongly urged the World Bank’s Board of Directors to reject the loan for Abellon because of the project’s negative effects on communities, such as air and water pollution, health problems, climate impacts, and undermining sustainable waste management practices,” it added.

The communities also demanded the scrapping of the project because it violated the performance standards of the International Finance Corporation and several legislations in India, the release said.

The International Finance Corporation’s decision on the project was delayed twice, first in July 2024 and again in September 2024, due to opposition to the plants.

“On inquiring with the IFC [International Finance Corporation] the status of the project, through an access to information request, we received a confirmation from IFC that it is not investing in the project,” the Alliance for Incinerator Free Gujarat clarified.

“The IFC’s withdrawal from the project is an important victory for the locals harmed by the plant,” alliance member Ker Jayendrasinh said. “Still, nothing short of a complete shutdown of the plant will bring relief to the affected communities.”

Asmita Chavda, another member, said that she was “extremely delighted” by the announcement from the International Finance Corporation. “It is the first success we have seen in the last 10-12 years,” she said.

“However, Abellon is still doing some construction work,” she said. “We want other financial institutions to take a cue from the IFC and stop the funding of all the WTEs [waste-to-energy plants] in the country as they are highly polluting and a danger to public health.”

The release also claimed that a financial analysis of Abellon Clean Energy Limited “revealed piled up losses and debts with just one operational WTE incineration plant in Jamnagar, Gujarat”.

It added: “The company’s net profit plummeted from approximately Rs 11.1 crore in 2021, to a loss of Rs 19 crore in 2023…The company is also unable to repay its loan interest payments.”

The release requested that no public funds be spent on a company whose financials were floundering and which risked becoming a stranded asset.

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