World Bank won't fund Luhri hydropower project in Himachal

Move to withdraw US $ 650 million follows inspection and review by USAID of environmental and social impacts of the project

 
By Ankur Paliwal
Last Updated: Monday 17 August 2015

The World Bank has decided to not fund the 612 MW Luhri Hydropower project on Sutlej River in Himachal Pradesh. The World Bank, which was to provide US $650 million of the total project cost of $1,150 million, has given the status of the project as “dropped” on its website. Environmental groups and local people under the banner of Sutlej Bachao Jan Sangharsh Samiti have hailed the decision. 

Though World Bank has not specified any reason for the move, its decision follows an inspection carried out by the United States Agency for International Development (USAID) team which visited India in November last year and reviewed the environmental and social impacts of the project to be developed by Satluj Jal Vidyut Nigam. USAID’s report is still under review.

Nek Ram Sharma of the Satluj Bachao Jan Sangharsh Samiti, which challenged the environment clearance granted to the project last year before the National Green Tribunal, said that World Bank’s decision has given a major boost to the local people’s belief that their voice matters in deciding their own future. The forum has been opposing the hydro-electric project because of the impacts of the proposed 38 km-long tunnel to be constructed as part of the project. The people's front kept protesting against the project even after the Union Ministry of Environment and Forests reduced the capacity of the project from 775 MW to 612 MW. “Reduction in capacity is not a solution. The project must be scrapped,” said the representatives of the front. 

Residents of at least 78 villages of Kullu, Mandi and Shimla district would be affected by the Luhri project and its 38 km-long tunnel that would divert water from the river and leave at least 50 km stretch of the river dry. They have been agitating against the project from the beginning. Local NGOs allege that the environmental impact assessment (EIA) of the project, carried out by The Centre for Inter-disciplinary Studies of Mountain & Hill Environment, was flawed and the public hearing was more of a charade.

While the project’s environmental clearance has been challenged in NGT, local non-profits have appealed to the government to scrap the project.


Report: Environmental Impact Assessment of Luhri H.E Project, Himachal Pradesh

Project Report: Luhri hydro electric project

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