The International Finance Corporation (IFC), the private, for-profit lending arm of the World Bank, has withdrawn from a proposed investment of $40 million (~₹346.45 crore) for four waste-to-energy (WTE) plants in Ahmedabad, Rajkot, Vadodara, and Jamnagar, as per CFA — Centre for Financial Accountability.

In a statement released on Friday, CFA stated, “IFC proposed a loan of $40 million on May 13, 2024, to support Abellon Clean Energy Limited (ACEL) to build four WTEs in Rajkot, Vadodara, Ahmedabad, and Jamnagar which would cumulatively burn 3,750 tonnes of unsegregated municipal solid waste every day”. 

However, the communities affected by the project, local activists, the International Accountability Project (IAP), and CFA wrote to the World Bank’s Executive Directors on June 26, 2024, about the negative effects of these WTEs such as air and water pollution, health problems, climate impacts, undermining sustainable waste management practices, and how it violated Indian laws and IFC’s Performance Standards, as per CFA.

The issue was again raised with IFC’s Stakeholder Grievance Response Team in an online meeting in July 2024. Later in August 2024, another letter was written by communities, activists, IAP, CFA Global Alliance for Incinerator Alternatives (GAIA), and Break Free From Plastics (BFFP), signed by 174 firms and activists across the country and globally, as per CFA.

The statement noted that after multiple meetings and follow-up letters, the IFC, on February 17, 2025, confirmed in response to an access to information request that it had withdrawn from the project.

“Abellon’s operational WTE incinerator plant in Jamnagar had already led to significant negative impacts on the 25,000 people living in its vicinity by causing air pollution, noise pollution, and health problems such as skin ailments, asthma, eye irritation, etc since it began its operations in November 2021,” noted CFA. 

According to the statement, the Gujarat Pollution Control Board(GPCB) issued a “show cause notice” on December 15, 2021, to the company based on an inspection of the factory premises.

“We were initially informed that all garbage would be transformed into power, but after operations began, we observed that the plant emitted many pollutants. We filed complaints with the Gujarat Pollution Control Board, the Municipal Commissioner, and the District Collector, yet the communities continue to suffer” shared Ker Jayendrasinh with CFA, who has been supporting the local communities in Jamnagar.

The CFA also went on to question the financial feasibility of AECL, stating that the firm has been facing losses and allegedly heading towards bankruptcy. 

“ACEL is struggling financially, with rising losses and debts,” stated the CFA release.

Vaishnavi Varadarajan from IAP shared with CFA, “IFC and other development finance institutions continue to display environmental racism by proposing to fund toxic WTE incinerators in India and other countries in Asia. While we welcome this move by IFC to not proceed with this investment for Abellon Clean Energy Limited to construct four WTE incinerators in Gujarat, India, we also hope they take these learnings ahead from this case in their ongoing review of the IFC Environmental and Social Performance Standards by including WTE incineration projects in their exclusion list and halt all funding to it globally.”

“The alternative to debt-inducing and harmful techno-fixes to waste such as WTE incinerators already exists. IFCs withdrawal only shows the innate risks from WTE projects. Public finance should best support Zero Waste solutions such as waste avoidance,  segregation, collection, reuse, and safe and inclusive recycling systems. Communities all over the world have already demonstrated the successes of ZW solutions.” Mayang Azurin, GAIA Asia Pacific Deputy Director for Campaigns said, according to the CFA release.