Why the ADB Withdrew its $434.25-Million Loan to a Solar Project in Assam

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Why the ADB Withdrew its $434.25-Million Loan to a Solar Project in Assam
Seema Sharma
43 minutes ago
Very rarely has one seen the government buckling under the pressure mounted by citizens in its unabashed pursuit of growth in the energy sector.
A protest against the solar project in Assam Photo: By arrangement.
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The Union government recently withdrew a proposed solar park in Karbi Anglong, Assam in the face of stiff and sustained resistance from local communities who could have been displaced as a result of the project.
Very rarely has one seen the government buckling under the pressure mounted by citizens in its unabashed pursuit of growth in the energy sector.
Which is why it is remarkable that the Asian Development Bank recently withdrew a $434 million loan and promise of technical assistance from the 1000-megawatt solar photovoltaic facility and solar park planned in the state's Karbi Anglong district.
The ADB cancelled the deal following a request from the Union finance ministry to this effect on May 23 this year. The ministry made this move after it was requested to by the state government, which faced stiff opposition from people who would be affected by the state and the disapproval of opposition parties. The local communities – Karbi, Naga, Kachari and Adivasis – said they would be displaced from 24 villages within the project area.
According to the ADB's website, on October 24, 2024, ADB approved a loan of $434.25 million for the Assam Solar Project and technical assistance of $1.0 million from the Clean Energy Fund under the Clean Energy Financing Partnership Facility.
The project was intended to support the construction of a large-scale solar photovoltaic facility integrated with a battery energy storage system pilot project in Assam, and to develop and enhance the state's institutional capacity to promote and implement public-private renewable energy transactions. The technical assistance was designed to build the Assam Power Distribution Company Limited's capacity in renewable energy, develop a solar project pipeline for private investment, and promote renewable energy skills and livelihoods.
Karbi Anglong locals at a protest against the solar project in Assam Photo: By arrangement.
The loan and project agreements were not yet signed when on May 23, 2025, ADB received a letter from the Union finance ministry, requesting the withdrawal of the loan and technical assistance. They were cancelled on the same day.
The solar power project was to be developed under the Assam government's flagship 'Mukhya Mantri Soura Shakti Prokolpo' scheme. For this, the government required 2,396.5 hectares or 18,000 bigha land near Khatkhati in Karbi Anglong, shares its border with Nagaland.
In addition to the ADB's loan, the government of Assam was going to contribute 19.29% of the amount necessary, while the Union government's share was 16.15%.
The Karbi Anglong Solar Power Project Affected People's Rights Committee (KASPPAPRC), representing over 20,000 Karbi, Naga, and Adivasi families, had voiced fears of displacement from their ancestral lands over this project and maintained their stiff opposition to it from the very beginning. The committee has hailed ADB's withdrawal as the victory of their sustained protests for land rights and one that would have significant environmental impact.
KASPPAPRC had said that the project was poised to become one of the largest land grabs in Assam's history.
'The Sixth Schedule is a constitution within the constitution, giving rights to us indigenous people, but here we saw how the authorities violated the basics of the Sixth Schedule. The ruling government has used political clout to repress and illegally change laws and rights, but we will keep fighting back and exposing them. Our people have shown them our strength, and this united struggle will continue,' said Bikram Hanse, a resident of Karbi Anglong and general secretary of the All-Party Hills' Leader Conference (ALPC).
He said the initial environmental examination or IEE for this project had denied the indigenous communities their land rights by stating that out of the nearly 2,400 hectares of land which needed to be acquired, only 8.2% (195 hectares) is customarily owned by them.
A protest against the solar project in Assam. Children's faces have been blurred in accordance with Indian laws to protect minors. Photo: By arrangement.
The committee leaders asserted that ADB approved the investment in October 2024 despite opposition from affected indigenous communities and in violation of its safeguards and Sixth Schedule protections of the Indian Constitution. ADB failed to obtain Free, Prior, and Informed Consent and held consultations in only nine of 23 impacted villages, excluding thousands from the process, they said. Key documents like the IEE and the plan for the resettlement of indigenous people (RIPP) were not publicly disclosed or translated into local languages, denying locals access to critical information. Community members also reported intimidation and threats, along with fraudulent land claims by outsiders seeking compensation.
Pranab Doley, spokesperson of the KASPPAPRC, said there was significant concern over wildlife. 'The proposed project area is an elephant corridor used for their migration. This fact was flagged to ADB as a significant ecological concern,' Doley said.
Environmentalists also expressed the same worry, along with the concern that the solar park would risk the future of bamboo forests, pollute water bodies, and affect biodiversity near the Deopani and Nambor wildlife sanctuaries.
Vaishnavi Varadarajan, an environment and human rights activist said, 'There has already been a weakening of environmental and social safeguards for large solar projects in India. Many are being pushed through without environmental clearances or public consultations.'
Varadarajan emphasised that the ADB's role in this case was especially troubling. 'What's deeply alarming is that ADB also diluted its own safeguard policies by approving a high-risk or Category A project [characterised by its potential for significant and irreversible adverse environmental impacts] based on incomplete documentation…The IEE and RIPP failed to capture the project's serious impacts — largely because affected communities were never meaningfully consulted,' she said.
KASPPAPRC's Doley said that the committee now calls upon the government of Assam and APDCL to permanently halt all attempts to acquire the 2,400 hectares of land and instead recognise and formalise the traditional land rights of the Karbi, Naga, and Adivasi people.
A protest against the solar project in Assam Photo: By arrangement.
'The cancellation of the Assam Solar loan and technical assistance by the ADB is a testament to the strength of the community voice in the face of top-down development. No form of energy project is above environmental and social responsibility. True sustainable development in the future of renewable energy must uphold community and environmental rights,' said Rayyan Hassan, executive director of the NGO, Forum on ADB.
Vidya Dinker, executive director of Growthwatch, which describes itself as a voluntary research and advocacy institution intending to protect natural resources from being grabbed by powerful groups, criticised the bank's inaction in the face of ongoing threats. 'Even now, as the communities face a heightened risk of retaliation for successfully challenging the project, the ADB has shown no effort to safeguard those who bravely exposed its flaws,' she said.
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