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India coal plant gets $450 million loan

India's largest private-sector power firm will receive a US$450 million loan from the World Bank's private investment arm to build a coal-fired power plant in the western state of Gujarat, but environmental groups criticised the decision, arguing that the bank could not effectively fight climate change while also funding high carbon-emitting projects.
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The World Bank’s president, Robert Zoellick, defended the International Finance Corp’s funding for the project, saying if developing nations are deprived of energy it will be counter-productive and a setback for the larger issues of climate change. The plant, built by Mumbai-based Tata Power, will generate 4,000 megawatts of electricity.

Green groups say the Mundra region, where the plant will be located, has huge solar potential. Coal for the project would need to be imported at rapidly rising costs. The company has said it may import 12 million tonnes of coal from countries including Indonesia for the plant.

The project is likely to provide electricity to 16 million users in five states in western and northern India.

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