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Protests Force Withdrawal of $434 Million ADB Loan for 1 GW Solar Project in Assam

The Asian Development Bank (ADB) has officially withdrawn its $434.25 million loan approval for a 1 GW solar power project in Assam, following a formal request from India’s Ministry of Finance. The decision comes in the wake of local resistance to land acquisition, primarily from tribal communities in the Karbi Anglong district.

The solar initiative, which was to be executed under the ‘Mukhya Mantri Sauro Shakti Prokolpo’ program, included plans for a 500 MW solar project, a battery energy storage system, and an additional 250 MW solar unit — all within Karbi Anglong. However, the Assam government sought to cancel the ADB funding after widespread protests over potential displacement and land diversion affecting 24 villages.

The ADB loan, initially approved in October last year, also included a $1 million technical assistance grant from the Clean Energy Fund, intended to build institutional capacity for public-private partnerships in the renewable energy sector. The technical assistance aimed to strengthen Assam Power Distribution Company’s (APDCL) expertise in clean energy, develop a pipeline of solar projects for private investment, and support skill development and livelihoods linked to the green energy transition.

According to the Resettlement and Indigenous Peoples Plan prepared by ADB, the total land requirement for the project was approximately 18,000 bighas (2,400 hectares), out of which 16,511 bighas (2,201.5 hectares) were under the jurisdiction of the Karbi Anglong Autonomous Council (KAAC). The remaining 1,489 bighas (198.5 hectares) comprised customarily owned land used by indigenous and tribal communities. The plan noted that while some households would lose portions of their land, none would be rendered landless, with over half losing less than 10% of their total land.

Despite these assurances, the project encountered stiff opposition from tribal residents and civil society groups, raising concerns about displacement, ecological impact, and violation of customary land rights.

This development highlights the growing challenges associated with land acquisition for renewable energy infrastructure in India. Similar resistance has surfaced in other states. In Rajasthan and Gujarat, renewable energy projects were halted following a Supreme Court directive in 2021 requiring underground transmission lines to protect the endangered Great Indian Bustard. More recently, a Rs8,000 crore pumped storage project in Karnataka has come under fire due to its location in an ecologically sensitive area inhabited by the critically endangered lion-tailed macaque.

While India continues to push for ambitious renewable energy goals, this case underscores the importance of community engagement, environmental safeguards, and inclusive planning to ensure smooth execution of large-scale green energy projects.