Pre-construction and site clearing activities begin for the Java 9 & 10 coal plants.
Communities demand remedy for IFC coal financing in Indonesia
Communities harmed by IFC coal financing in Indonesia have lodged a complaint against the institution for damages.
On this webpage, you can find all the details about the case including the history, timeline, key documents, related press releases and articles, profiles of the organisations involved, and latest news.
IFC coal financing in Indonesia: History and harms
Between 2007 and 2019, the World Bank’s private sector arm, the International Finance Corporation (IFC), made several investments in Hana Bank Indonesia, including two equity investments. This prominent commercial bank went on to provide project finance to the developer of two massive new coal-fired power plants, Java 9 & 10.
Located 120 km northwest of Jakarta, these new projects expand an existing complex of eight coal power plants in the Banten Province. In addition to exacerbating the global climate crisis, this coal complex has caused serious, immediate harm to local communities. Livelihoods based on farming, fishing and tourism have become unviable, while air pollution from coal dust and toxic waste has left children and families struggling to breathe.
Many families were forcibly evicted without adequate warning or compensation to make way for the new plants, which are expected to cause thousands of premature deaths and release an estimated 250 million metric tons of carbon dioxide into the atmosphere over their 30-year lifespan.
Local communities and organisations have been protesting against the Java 9 & 10 coal projects for years. In this photo, a youth raises a sign suggesting investments are driven by “greed” rather than “green” intentions, at a protest held in July 2020 with activists from Trend Asia, Pena Masyarakat, Greenpeace Indonesia and Walhi Jakarta.
Photo by Dhemas Reviyanto Atmodjo.
In 2023, affected people lodged a complaint to the IFC’s Ombudsman with the support of local and international organisations PENA Masyarakat, Trend Asia, Inclusive Development International and Recourse.
The complaint outlines how the IFC failed to identify its client’s role in this new coal development in Indonesia, which undermined the institution’s coal phase-out attempts, and violated important social and environmental standards. It also argues that construction of new coal plants is unnecessary in the region, where electricity supply already exceeds demand.
Communities are calling for Java 9 & 10 to be decommissioned, and for the bank to provide fair and full redress for the harms caused by its investment.
Read this report for an overview of the social and environmental impacts of Java 9 & 10, alongside details of IFC coal financing in Indonesia.
Partners
Trend Asia
Trend Asia is an Indonesian civil society organisation that acts as an accelerator of energy transformation and sustainable development in Asia. Through research, advocacy, legal action and grassroots campaigning, it works to expose the role of public financiers in damaging energy projects, and calls for investment in clean, renewable alternatives. It Asia has been working with communities in Banten Province since 2019.
PENA Masyarakat
PENA Masyarakat is an independent organisation focused on socio-ecological justice in Banten Province, Indonesia, since 2020. It stands with communities to combat environmental destruction, inequities in natural resource management, and policies that disregard ecological safety.
Inclusive Development International
Inclusive Development International is a US-based human rights advocacy organisation that works to advance social, economic, and environmental justice. It supports communities around the world to defend their rights and resources in the face of harmful corporate activities and internationally financed development projects.
ADB coal financing in Indonesia
The World Bank Group is not the only multilateral lender involved in the expansion of the Banten coal complex.
The Asian Development Bank (ADB) has also been indirectly involved, via a $600 million loan to Indonesia’s state-run electricity utility, Perusahaan Listrik Negara (PLN). This 2021 loan is contributing to PLN’s ten-year business plan, which includes the construction of Java 9 & 10, and more than a dozen other coal projects.
Read this report for an overview of the ADB’s role in coal financing in Indonesia.
This intermediary finance puts both the World Bank Group and the ADB at odds with their commitments to align with the Paris Agreement, and with Indonesia’s Just Energy Transition Partnership, a $20 billion multilateral initiative aimed at helping the country transition away from coal, toward cleaner energy sources.
While the consequences of these investments will be global, they are already being felt most acutely by the people of Banten who live in the shadow of coal power plants.
Recourse supports cases like these to secure justice for communities and achieve wider policy shifts in international financial institutions, to prevent future harms.
Browse below for documentation related to the case and the IFC’s coal policies.
Case documentation
Research and policy documentation
