Abellon’s bankruptcy exposes the failures of India’s waste-to-energy push

Once touted as a promising player in India’s waste management sector, with multiple waste-to-energy (WTE) incineration plants, Abellon Clean Energy Ltd is now battling an insolvency case filed by Rural Electrification Corporation (REC) Ltd, a key public sector lender.

Abellon has four ongoing projects in Ahmedabad, Vadodara, Rajkot and Jamnagar, which cumulatively burn about 3,750 tonnes of mixed municipal solid waste (MSW) every day. The company also had plans to build 11 WTE plants across various districts in Gujarat.

Recently, it was booked under Section 7 of the Insolvency and Bankruptcy Code for a loan default of over Rs 15 crore. Abellon has offered a Rs 14 crore one-time settlement through a group affiliate. REC initially rejected the offer, but a revised proposal was later submitted and is reportedly under consideration.

On July 23, 2025, the National Company Law Tribunal (NCLT) dismissed the case, noting that REC did not wish to pursue the matter further at this stage, but granted it the liberty to revive or refile the petition if no settlement is reached.

Similarly, the International Finance Corporation (IFC) had proposed a $40 million investment in Abellon, only to withdraw after public protests and environmental and social concerns.

Not long ago, in 2019, Essel Infra, which operated about 15 WTE plants valued at Rs 2,500-3,000 crore, also faced insolvency proceedings, with public lenders such as J&K Bank and State Bank of India (SBI) initiating action over defaults. Abellon’s case may well be a warning — and a reminder — for both national and international financial institutions that lending to the waste-to-energy incineration sector is a waste of public money.

Tracking Abellon’s financial downfall

The company’s financials tell a cautionary tale, moving from optimism and asset expansion to deep operational stress, repeated losses and eventual insolvency. NCLT records from 2021 show that Abellon was already undergoing a Corporate Insolvency Resolution Process, indicating deeper, long-standing financial distress. While Abellon’s financials appeared steady before 2018, they declined sharply in subsequent years, coinciding with rapid expansion in Gujarat’s WTE projects.

A closer look at the company’s books from 2019 to 2023 reveals that while asset growth and borrowing surged, profitability collapsed, raising critical questions about both the company’s internal health and the diligence of its funders.

Its net worth grew steadily, jumping from Rs 132 crore in 2019 to Rs 465 crore in 2023. But beneath this growth, the company’s financial health was quietly deteriorating. Since 2021, Abellon’s profits have taken a sharp hit. That year, the company posted a net profit of Rs 11.1 crore; just two years later, it reported a loss of Rs 19 crore. Its total income also dropped drastically, from a high of Rs 154 crore in 2020 to just Rs 13 crore in 2023. In other words, while the company was expanding its footprint, its revenues and profits were shrinking.

The debt numbers raise even more concern. Between 2021 and 2023, Abellon’s debt-to-equity ratio jumped from 0.68 to 1.64, showing a growing dependence on borrowed money. In 2022, the company did not earn enough to cover its interest payments, falling short by 1.5 times.

A year later, this shortfall widened dramatically, with profits falling short by over 14 times the interest due. Its quick ratio remained near 0.05, meaning it had only Rs 5 in liquid assets for every Rs 100 owed — a clear sign of severe cash flow stress.

At the same time, lenders continued to back the company. By 2023, Abellon had charged assets worth over Rs 930 crore to raise debt. Despite Abellon’s deteriorating financials and prolonged losses, major public sector lenders continued to support the company with large loans and guarantees. Institutions such as Indian public sector company REC Ltd, Power Finance Corporation (PFC), Indian Renewable Energy Dev Agency Ltd, SBI Cap and IDBI Trusteeship collectively account for hundreds of crores in exposure.

Shailendrasinh R Jadeja, an advocate from Rajkot, Gujarat, who has been tracking Abellon’s waste management projects, said: “PFC, which lent Rs 195 crore to Abellon, has stated that the loan is under default and categorised as Stage-III in its books and that as of now no additional funding to these projects is envisaged. This raises a critical question about what due diligence is being done before public money is committed to such technologies with huge financial losses and who needs to be held accountable for it?”

Abellon’s decline appears to have coincided with its expansion into multiple WTE projects across Gujarat. These included proposed plants in Jamnagar, Rajkot, Ahmedabad and Vadodara, which required heavy investment but failed to generate equivalent returns. This raises a fundamental question: Is waste-to-energy really a suitable technology for the waste generated in India — and how long will public money continue to be burned in the name of “green energy”?

Local pushback and World Bank’s withdrawal from Abellon’s WTE projects

Even the trial operations of Abellon’s WTE plant in Jamnagar caused such severe pollution and community impact that the Gujarat Pollution Control Board (GPCB) issued a show-cause notice to the company for non-compliance with environmental regulations. The health impacts on nearby communities include eye irritation, headaches and respiratory illnesses caused by severe air pollution.

Locals alleged that no proper consultations were held, as Abellon deliberately kept the WTE project size at 14.9 MW instead of 15 MW to evade the Environmental Clearance (EC) mandated under the Environmental Impact Assessment Notification of 2006. 

A recent status report submitted by the Central Pollution Control Board (CPCB) to the National Green Tribunal (NGT) reveals that the WTE plant operated by Abellon in Jamnagar does not monitor mandatory stack emissions such as dioxins and furans—the most toxic carcinogens. Moreover, the toxicity of the bottom ash and fly ash generated is not tested and information on their disposal was not provided.

Impacted communities, concerned citizens and civil society organisations also wrote to the executive directors of the World Bank about the environmental, public health and climate harms of investing in the WTE projects. The letter highlighted violations of IFC’s Performance Standards, including:

• Flawed Environmental and Social Risk and Impact Assessments (ESIA)

• Poor resource efficiency and worsening pollution

• Health, safety and security risks to local communities

Finally, after global outrage and pressure from local communities, activists and international networks, the IFC confirmed in February 2025 that it had withdrawn from the harmful WTE project in Gujarat.

Where there is waste, there is money

While countries in Europe and the United States are dismantling polluting WTE plants, India continues to build more. The US is on a WTE demolition spree and has shut down 53 WTE incinerators since 2000. The shutdown of California’s last WTE incinerator was celebrated by communities across the state and marked the beginning of a zero-waste future and more equitable solutions.

The EU’s first step in dismantling toxic WTE facilities was to halt funding and subsidies. WTEs were excluded from the Just Transition Fund, the EU Green Deal, the Renewable Energy Directive and the Circular Economy Action Plan. Furthermore, the European Investment Bank also excluded WTEs from its financial support. Once a leader in the WTE sector, the EU is now rapidly phasing out incineration and moving towards “zero waste” models of waste management.

In contrast, WTEs in India receive Viability Gap Funding of up to 50 per cent of the capital investment under the Swachh Bharat Mission and the Smart Cities programme. Financial institutions also offer generous loans at low interest rates. PFC, for example, is the largest lender for WTEs in India despite the fact that all PFC-funded WTE projects have either failed or are non-compliant with CPCB emission regulations.

The science is clear: WTE incineration has no place in India’s sustainability agenda. Mounting evidence highlights the environmental, social, health and climate harms of WTEs.

Taking a cue from Abellon’s bankruptcy and IFC’s withdrawal from funding WTEs in India, Indian banks must stop investing in WTEs and redirect funds towards sustainable waste management alternatives, such as decentralised “zero waste” systems rooted in environmental and social justice.

Pranay Raj works as a data analyst at the Centre for Financial Accountability, New Delhi and Chythenyen Devika Kulasekaran is a senior research associate with the Centre for Financial Accountability.

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth