The World Bank drops funding USD 650 m for the LUHRI Hydro project! Victory for the Sutlej Bachao Jan Sangharsh Samiti

The World Bank has decided not to lend financial assistance to the massive Luhri Hydropower project on Sutlej River in Himachal Pradesh. The World Bank, which was to provide a huge USD 650 million to the $ 1150 million project, on its website now indicates[i] the status of the project as DROPPED. Environmental groups and local affected people under the banner of Sutlej Bachao Jan Sangharsh Samiti consider this is a major victory for the campaign to save the last remaining stretch of “free”[ii] flowing Sutlej River.

The decision of the World Bank comes subsequent to an appraisal by the USAID team who 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 Dec 2013, the World Bank reportedly defended their decision to support the project. The USAID trip report is still under internal review, likely to be finalized in a couple of months, we understand. 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, we understand the government of India decided to withdraw the application, the same ploy that was used in 1993 when the World Bank decided to pull out of Sardar Sarovar Project. On April 10, 2014, SANDRP received an email (in response to our query) 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.”

Nek Ram Sharma of the Satluj Bachao Jan Sangharsh Samiti adds, “This will give a major boost to the local people’s belief that our voice matters in deciding for our own future.” The Samiti which has challenged the Environment Clearance granted to the project last year at the National Green Tribunal has been in opposition to the project mainly because of the impacts of the proposed 38 kms long tunnel to be constructed as part of the project.

In response to submissions by the Samiti and groups like SANDRP and Himdhara the project capacity was reduced from 775 MW to 612 MW by the Ministry of Environment.  However, objections were raised with the government in March 2013[iii], saying that reduction in capacity is no solution, the project must be scrapped.

Members of Himdhara, an environment research and action collective supporting the local movement, said, “The withdrawal of the World Bank funding will provide a breather for the local people who have been under constant pressure from the administration to support this ecologically disastrous project. It is time that our governments wake up and realise the magnitude of the crisis that is unfolding as a result of Hydroprojects”.

The earliest documents on World Bank website related to this project are dated Feb 2010[iv]. A June 2011 feature story on the World Bank website said: “The Project is currently under preparation… The Project is also initiating additional studies to meet the Bank’s due diligence requirements.”

Important dates in Luhri HEP decisions

Sr No	Event	Date
1	Date of first documents on WB website on Luhri Project	Feb 2010
2	Feature story on WB website[v] on Luhri Project	June 30 2011
3	Letter from SANDRP to WB, also raising issues related to proposed WB funding for Luhri HEP, among other issues. The letter was in response to the invitation to SANDRP from the World Bank for Consultations meeting for developing the World Bank’s Country Program Strategy 2013-16 held on June 26,  2012	June 26 2012
4	WB response to SANDRP says the due diligence for the Luhri HEP is still ongoing.	Sept 5 2012
5	USAID team visit Luhri project area, meets SJVN, World Bank and communities	Nov Dec 2013

6	World Bank decides to drop funding to the project	Jan 2014
7	News of World Bank Dropping Luhri project seen on WB Website	Apr 4, 2014[vi]

The people of at least 78 villages of Kullu, Mandi and Shimla district to be affected by the Luhri project and its 38 km long tunnel that would bypass at least 50 km of the river have been agitating against the project. The project’s Environmental Impact Assessment done by CISMHE (led by Dr Maharaj Pandit) was flawed, the public hearing was a façade and the appraisal by the Expert Appraisal Committee was also seriously compromised. There is zero distance of the river between Luhri and upstream and downstream projects. The Sutlej basin has seen possibly the highest concentration of bumper to bumper hydropower projects, more than any other basin in India, aided also by the World Bank funding to the 412 MW Rampur Project and the 1500 MW Nathpa Jakhri project, both developed by the same SJVN Limited (earlier known as Sutlej Jal Vidyut Nigam Ltd) that is now planning to develop Luhri Project., SJVN seemed to have become the darling of the World Bank, and the Bank refused to take action even when evidence of violations of laws and rights of the affected were given to the Bank. After the Uttarakhand disaster of June 2013 involving the hydropower projects, there was even greater urgency to stop such disastrous projects taken up without proper environmental impact assessment or cumulative impact assessment.

The affected people and SANDRP had written to the authorities in Government of India and Himachal Pradesh[vii] and also the World Bank a number of times, questioning the justification and viability of the project. The January 2013 letter from SANDRP to EAC and MoEF[viii] was signed by more than 50 organisations and individuals. Even in Sept 2012 letter to SANDRP, the World Bank’s India Country Director Dr Onno Ruhl said that the Luhri project is undergoing due diligence.

We welcome this move by the World Bank to withdraw from the project and appeal to the government of India, Himachal Pradesh Government, Union Ministry of Environment & Forests and SJVN to cancel the project and allow the last stretch of un-dammed river to remain un-dammed. The projects’ environment clearance stands challenged in the National Green Tribunal. The decision of the World Bank will be huge encouragement for the communities to continue to oppose this unjustifiable and unjust project.

For more details contact:

Satluj Bachao Jan Sangharsh Samiti. Himachal Pradesh (Nek Ram Sharma, 09817019281: luhribandhvirodh@gmail.com)

Himdhara Environment Research and Action Collective, HP, (Manshi Asher 09816345198, manshi.asher@gmail.com)

South Asia Network on Dams Rivers and People, New Delhi, (Himanshu Thakkar, 09968242798, ht.sandrp@gmail.com)

END NOTES:

[i] http://www.worldbank.org/projects/P102843/luhri-hydro-electric-project?lang=en&tab=overview, accessed on April 4/9, 2014.

[ii] With such large number of dams built, under construction or planned on the Sutlej river both upstream and downstream of the Luhri project (see:  https://sandrp.in/basin_maps/Hydro_Electric_Projects_on_Sutlej_River_in%20HP.pdf), the river is hardly free flowing, but this word is used in absence of more suitable word.

[iii] http://www.himdhara.org/2013/03/18/activists-write-to-ministry-of-environment-on-luhri-projectchange-in-size-not-the-solution/

[iv] See: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/02/23/000262044_20100223094335/Rendered/PDF/Integrated0Saf10Sheet1Concept0Stage.pdf and                                                                        http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/02/16/000262044_20100216093930/Rendered/PDF/Luhri0PID0100Concept0Stage01Approved1.pdf

[v] http://www.worldbank.org/en/news/feature/2011/06/30/luhri-hydro-electric-project

[vi] This is the date on which we noticed that the World Bank website shows the project status as “Dropped”

[vii]https://sandrp.wordpress.com/2013/02/07/eac-of-moef-damns-the-satluj-himanshu-thakkar/,

http://www.himdhara.org/2012/05/13/eco-group-against-clearance-to-luhri-power-project-the-tribune/,

http://www.himdhara.org/2012/09/06/villagers-oppose-noc-to-luhri-project-petition-prem-kumar-dhumal/,

http://www.himdhara.org/2013/03/29/the-tribune-capacity-cut-not-enough-to-address-environment-concerns-activists/,

http://www.himdhara.org/2013/06/10/himachal-pradesh-government-flunks-forest-rights-subject/

[viii] https://sandrp.in/hydropower/copy_of_hydropower/REJECT_Environment_Clearance_for_Luhri_HEP_Letter_from_56_to_MoEF_and_EAC_January2013.pdf