Shocking Reasons Why ADB Withdrew $434 Million Loan from Assam Solar Project
A Victory for the People — The Cancellation of ADB’s $434 Million Solar Project in Assam
Introduction: A Rare Halt to Development in the Name of People and Environment
In a surprising yet momentous development, the Union Government of India has formally withdrawn its commitment to a proposed 1,000-megawatt solar photovoltaic park in the Karbi Anglong district of Assam, following sustained resistance from indigenous communities and civil society organisations. This move prompted the Asian Development Bank (ADB) to cancel its previously approved $434.25 million loan and accompanying technical assistance package on May 23, 2025 — a rare instance where grassroots protest forced an international financial institution and multiple levels of Indian governance to retreat from a large-scale development project.
The decision represents a major victory for the Karbi Anglong Solar Power Project Affected People’s Rights Committee (KASPPAPRC), a coalition representing over 20,000 tribal and rural families in 24 villages, who maintained their opposition to the project from its inception. Their steadfast resistance was rooted in demands for the protection of customary land rights, environmental conservation, and adherence to constitutional safeguards, particularly those enshrined in the Sixth Schedule of the Indian Constitution.
ADB’s Investment and Its Abrupt Withdrawal
The ADB had approved its substantial financial commitment to the Assam Solar Project on October 24, 2024, including a $434.25 million loan and $1 million in technical assistance from the Clean Energy Fund. The project, under the Assam government’s ‘Mukhya Mantri Soura Shakti Prokolpo’ scheme, was intended to catalyse public-private partnerships in renewable energy, supported by a pilot battery energy storage system and institutional capacity building for the Assam Power Distribution Company Limited (APDCL).
However, within seven months of the approval—and before the loan and technical assistance agreements had been formally signed—the project collapsed. The Union Finance Ministry, responding to political pressure from the Assam state government, formally requested the ADB to terminate the funding. The bank complied on the very same day, issuing a cancellation notice and removing the project from its active portfolio.
A Project Doomed by Its Social and Environmental Footprint
The core of the resistance to the project lies in the 2,396.5 hectares (approximately 18,000 bighas) of land it required in the Karbi Anglong district, bordering Nagaland. Much of this land was identified as either customary tribal territory or ecologically sensitive, including bamboo forests, wildlife corridors, and regions adjoining protected areas such as Deopani and Nambor wildlife sanctuaries.
The proposed project site was home to indigenous Karbi, Naga, Kachari, and Adivasi communities, many of whom have inhabited the area for generations under traditional governance systems and land tenure arrangements. The state’s push for acquisition triggered fears of mass displacement, loss of livelihood, environmental degradation, and the erosion of constitutional rights guaranteed under the Sixth Schedule.
Community members rallied under KASPPAPRC and brought these concerns to the fore through formal petitions, public demonstrations, and legal memoranda. The committee labelled the project as one of the “largest land grabs in Assam’s history” and accused both the state government and the ADB of failing to uphold basic standards of consultation and transparency.
Allegations Against ADB: Safeguard Failures and Consultation Gaps
According to activists and legal experts, ADB’s approach to this high-risk project was fraught with irregularities from the start. Community representatives assert that the bank:
- Approved the loan despite clear opposition from affected populations.
- Violated its own safeguard policies, which require Free, Prior, and Informed Consent (FPIC) for indigenous populations.
- Held consultations in only 9 of the 23 affected villages, excluding thousands of directly impacted individuals.
- Did not translate key documents such as the Initial Environmental Examination (IEE) and Resettlement of Indigenous Peoples Plan (RIPP) into local languages.
- Failed to disclose both the IEE and RIPP publicly and on time.
Environmental campaigners and watchdog groups such as Forum on ADB and Growthwatch further accused the bank of downgrading the project’s risk profile, even though it qualified as Category A — a designation reserved for projects with significant, irreversible environmental and social impacts.
“What’s deeply alarming is that ADB also diluted its own safeguard policies by approving a high-risk project based on incomplete documentation,” said Vaishnavi Varadarajan, a noted environment and human rights activist.
Voices from the Ground — Indigenous Resistance and Constitutional Betrayal
Karbi, Naga, Kachari, and Adivasi Voices Rise in Unison
At the heart of the movement against the Karbi Anglong solar project were the indigenous communities themselves — Karbi, Naga, Kachari, and Adivasi — who declared that the government’s vision for clean energy came at the unacceptable cost of displacement, cultural erasure, and environmental destruction. These communities stood united through the Karbi Anglong Solar Power Project Affected People’s Rights Committee (KASPPAPRC), a grassroots organisation that emerged as the principal vehicle of resistance.
Through rallies, written objections, village-level awareness meetings, and coalition-building with human rights and environmental advocacy networks, KASPPAPRC helped amplify the voices of over 20,000 residents spread across 24 villages.
“We are not against solar energy. We are against the destruction of our homeland without our consent,” said Bikram Hanse, a Karbi youth leader and general secretary of the All-Party Hills’ Leaders Conference (ALPC). “This project violated the very essence of the Sixth Schedule, and our struggle is for both climate justice and tribal sovereignty.”
The Sixth Schedule: A Constitutional Shield Breached
The Sixth Schedule of the Indian Constitution was designed to protect the autonomy of tribal populations in the Northeast through decentralised governance and protection of land rights. In Karbi Anglong, the Karbi Anglong Autonomous Council (KAAC) operates under these provisions.
However, community members argued that the KAAC’s approval of the solar project — allegedly without proper consultation or consent — was unconstitutional. “The Sixth Schedule is a constitution within the constitution,” said Hanse. “Yet we saw how state authorities used political power to override tribal institutions and laws. That is not just illegal — it is colonial in spirit.”
KASPPAPRC highlighted that the project’s Initial Environmental Examination (IEE) stated that only 8.2% of the proposed land was under customary tribal ownership — a claim the communities strongly refuted. “This was a deliberate misrepresentation,” said Pranab Doley, KASPPAPRC spokesperson. “We have documents proving inter-generational possession. The state tried to erase our rights through paperwork.”
Consultation Gaps and Safeguard Failures
ADB policy mandates Free, Prior and Informed Consent (FPIC) for projects that affect indigenous peoples. Yet, KASPPAPRC alleges that:
- Out of 24 directly impacted villages, consultations were held in only 9, many of which were incomplete or tokenistic.
- Key documents such as the IEE and RIPP were not translated into local languages, making them inaccessible to most residents.
- Public disclosure of project risks was inadequate, and the timeline for community response was unrealistically short.
These procedural failures, activists argue, rendered the ADB’s safeguards meaningless. “The project was steamrolling forward even before affected people knew what was happening,” said Vaishnavi Varadarajan, who has been documenting solar expansion in India. “ADB’s actions here raise serious doubts about the integrity of its approval mechanisms.”
Climate Justice vs Green Colonialism
While the Indian government continues to position itself as a global leader in clean energy transitions, the Karbi Anglong case has prompted serious questions about the ethics of renewable energy development. Environmental justice advocates argue that green projects are increasingly being deployed in marginalised areas where consent is difficult to enforce, and displacement is treated as an acceptable cost of progress.
“The idea that climate goals justify trampling human rights is dangerous,” said Rayyan Hassan, Executive Director of Forum on ADB. “The Karbi Anglong resistance is not anti-development — it is a call for just, inclusive, and community-led development.”
Allegations of Intimidation and Land Fraud
Adding to community anger were allegations of threats and intimidation. Multiple villagers claimed they were visited by officials who warned them against protesting. Others said outsiders had begun to falsely claim ownership of tribal lands in anticipation of lucrative compensation packages.
KASPPAPRC has demanded a full investigation into:
- Alleged coercion of village leaders to sign consent forms.
- Fraudulent land documents submitted by non-indigenous parties.
- Lack of legal assistance for affected villagers to defend their land rights.
“The threat wasn’t just legal — it was physical,” said Doley. “There were reports of plainclothes men visiting homes, discouraging women from attending protests, and offering bribes in exchange for silence.”
State Opposition and Public Pressure
As protests grew louder and gained national media attention, opposition parties in Assam seized the issue as a symbol of the ruling government’s disregard for indigenous rights. Political leaders criticised the project for being rushed, opaque, and anti-people.
This pressure culminated in the state government requesting the Union Finance Ministry to formally withdraw the project proposal, leading to ADB’s cancellation of both the loan and technical assistance.
The news of the withdrawal was met with jubilation in affected villages, with community elders holding prayer ceremonies to commemorate what they described as a historic people’s victory.
Ecological Devastation Averted — Wildlife, Forests, and the Battle for Sustainability
A Solar Park in an Elephant Corridor
Among the most urgent concerns raised by local communities, environmentalists, and wildlife experts regarding the now-aborted Karbi Anglong solar park project was the fact that the proposed 2,396.5-hectare site lies directly along an elephant migration corridor.
Elephants, which are Schedule I protected species under the Indian Wildlife Protection Act, use these corridors to move between habitats in Nagaland, Karbi Anglong, and the Deopani and Nambor Wildlife Sanctuaries. “The corridor is crucial for their survival,” said Pranab Doley, spokesperson of KASPPAPRC. “Solar panels and human development would have blocked the path, leading to tragic consequences for both elephants and people.”
Local observations noted seasonal elephant crossings through the designated land, often in herds of 12 to 25 individuals, especially between the months of April and October. With the land being earmarked for industrial solar infrastructure, villagers feared increased human-animal conflict, habitat fragmentation, and loss of biodiversity.
Environmental NGOs flagged that the Initial Environmental Examination (IEE) failed to mention this wildlife corridor. “This is not just a procedural lapse; it is an environmental scandal,” said Vaishnavi Varadarajan, environmental and human rights advocate. “You cannot greenlight a Category A project without taking into account the lives it will disrupt — both human and animal.”
Threats to Bamboo Forests and River Ecosystems
The proposed solar park was to be located on land rich in bamboo forests, which are not only ecologically significant but also serve as a primary source of livelihood for tribal communities. Bamboo is used in housing, fencing, artisanal products, and cultural events.
Cutting through this terrain to install solar panels, substations, roads, and battery storage units would have meant the destruction of over 60% of local bamboo cover, leading to:
- Loss of income for traditional bamboo weavers.
- Disruption in traditional ecological knowledge systems.
- Increased soil erosion during the monsoon season.
In addition, nearby rivers and water bodies, including tributaries flowing into the Deopani and Nambor Sanctuaries, faced the risk of sedimentation and contamination. “Construction and deforestation would have changed the entire hydrology of the area,” said Dr. Abhinav Goswami, an ecologist and visiting fellow at the Indian Institute of Ecology. “Wetland degradation is often an invisible cost of infrastructure projects — until it’s too late.”
Silent Victims: Insects, Birds, and Microfauna
While much attention was given to the macro-level ecological impact, entomologists and local researchers also raised alarms about the decline of insect diversity and bird populations.
Solar panels are known to reflect polarised light, which can confuse flying insects and disrupt pollination cycles. “Massive solar installations without a buffer zone can lead to significant changes in light pollution and microclimate,” noted Dr. Ruchi Barman, a conservation biologist. “Bird species like the Indian Pitta and Oriental Pied Hornbill have specific nesting areas in these forests. That entire habitat could have been erased.”
Such changes in insect life and avian patterns would ripple through the food chain, affecting larger species such as civets, snakes, and even leopards occasionally seen near the forests.
Environmental Clearance Bypassed? A Pattern Emerges
One of the most damning revelations in the Karbi Anglong case was the apparent attempt to bypass standard environmental clearance (EC) procedures. Since 2017, the Ministry of Environment, Forest and Climate Change (MoEFCC) has issued notifications exempting certain renewable energy projects, especially solar parks, from requiring detailed Environmental Impact Assessments (EIAs).
While this is meant to fast-track clean energy goals under India’s Paris Agreement commitments, it has increasingly led to “green colonialism” — a term activists use to describe environmentally destructive projects disguised as climate action.
“Solar parks are being bulldozed through tribal lands, forests, and wetlands — all in the name of sustainable development,” said Vidya Dinker, Executive Director of Growthwatch. “What’s worse is that agencies like the ADB, which claim to uphold international environmental and human rights norms, are complicit.”
In the Karbi Anglong case:
- No public hearing was conducted with all impacted villages.
- No proper biodiversity survey was released to the public.
- No third-party audit was mandated by the ADB before approval.
“Even in high-risk projects, procedural compliance has become optional,” said Dr. Goswami. “This sets a dangerous precedent not just for Assam, but for all ecologically sensitive areas across India.”
Solar Energy with Accountability — A Missed Opportunity?
Experts point out that the solar park could have followed low-impact models that integrate energy infrastructure with biodiversity conservation. Techniques such as:
- Agro-photovoltaics (co-using land for farming and solar).
- Floating solar farms on non-ecologically sensitive water bodies.
- Distributed rooftop solar installations.
…could have significantly reduced the footprint while still meeting clean energy goals.
“Assam has one of the lowest urban solar rooftop penetration rates,” said energy analyst Ritwik Sarma. “Had even a third of the proposed megawatt target been met through rooftop solar, it would’ve reduced transmission loss, boosted local employment, and protected the forests.”
Unfortunately, such approaches were never seriously explored in Karbi Anglong, revealing a centralised, top-down vision that ignored regional socio-ecological contexts.
Legal Fallout, Policy Scrutiny, and A Precedent for Indigenous Resistance
ADB’s Accountability Crisis — Violations of Safeguard Policies
One of the most alarming outcomes of the Karbi Anglong solar project saga has been the serious questions raised over the Asian Development Bank’s own compliance with its environmental and social safeguard policies. While the ADB is often seen as a multilateral agency that funds sustainable and socially responsible development, its actions in Assam have prompted a wave of criticism from global environmental and human rights watchdogs.
According to ADB’s Safeguard Policy Statement (SPS) of 2009, any Category A project—defined as one with “potential for significant adverse environmental or social impacts”—requires comprehensive assessments, including:
- A full Environmental Impact Assessment (EIA),
- A Resettlement Plan,
- An Indigenous Peoples Plan (IPP), and
- Free, Prior and Informed Consent (FPIC) of affected tribal populations.
However, in Karbi Anglong, the ADB greenlit the project with only an Initial Environmental Examination (IEE) and a resettlement plan (RIPP) that was never disclosed publicly or translated into local tribal languages.
According to a detailed analysis by Forum on ADB, a coalition of NGOs tracking ADB compliance across Asia, the bank violated multiple key requirements:
- Only 9 of 23 villages were ever consulted during project preparation.
- FPIC was not obtained, making the project non-compliant with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).
- Safeguard documents were never made publicly available, depriving communities of the chance to contest or even understand the project fully.
“The ADB acted in haste and in arrogance,” said Rayyan Hassan, Executive Director of Forum on ADB. “It knowingly ignored red flags and pushed a high-risk project in an ecologically and socially fragile area. The withdrawal of the loan is not enough — we demand a formal audit, community reparations, and an overhaul of ADB’s consultation mechanisms.”
Union Government and State Backpedal Under Pressure
Legally, the Union government’s request to ADB for cancellation of the loan on May 23, 2025, following the Assam government’s appeal, is a rare instance where sustained grassroots resistance directly influenced top-tier financial diplomacy.
Legal experts believe that while the loan and technical assistance agreements were never signed, the government remains accountable under domestic constitutional obligations, especially:
- The Sixth Schedule, which safeguards tribal land rights and autonomy in areas like Karbi Anglong.
- Article 21, which ensures the right to life, including a clean environment and protection from displacement.
- PESA (Panchayats Extension to Scheduled Areas) Act, under which no land acquisition or development project can proceed without the consent of Gram Sabhas.
“The cancellation reflects a legal acknowledgment that this project had no constitutional or ethical legs to stand on,” said Advocate Lina Narang, a Supreme Court environmental lawyer. “However, mere withdrawal doesn’t erase the intimidation, land claims fraud, and policy malpractice that preceded it. These must be investigated.”
Retaliation Risks and State Responsibility
While the victory was lauded by civil society and tribal rights organisations, activists warn that those who led the resistance now face threats of retaliation, land seizures under alternate guises, or legal harassment.
“In similar past struggles — from Vedanta in Niyamgiri to POSCO in Odisha — state actors have often targeted protest leaders after international attention dies down,” said Vidya Dinker of Growthwatch. “We are already hearing reports of surveillance, harassment, and coercion in some Karbi villages.”
KASPPAPRC and Forum on ADB have jointly called for:
- Protective measures for community leaders under whistleblower protection and rights defender laws.
- A moratorium on all large-scale land acquisitions in Karbi Anglong for five years.
- A parliamentary committee investigation into how a high-risk Category A project was approved in violation of multiple safeguards.
Solar Colonialism or Clean Energy? Redefining the Debate
The Karbi Anglong case has reignited a larger debate: Can solar energy — a clean energy source — still be used as a tool for land colonisation and dispossession?
Environmental journalist Aruna Dev, who has written extensively on the issue, puts it succinctly: “India’s renewable energy mission is now entering the same unethical terrain as fossil fuel extraction. If it involves land grabs, no FPIC, and ecosystem destruction — then it’s not clean.”
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