IFC and MIGA Boards Approve Management Action Plan in Response to CAO Investigation Related to the Adjaristsqali Hydropower Cascade Project in Georgia

Washington, D.C., September 8, 2025 - The IFC Board of Executive Directors and the MIGA Board of Directors approved an IFC and MIGA Management Action Plan (MAP) in response to a compliance investigation related to the Adjaristsqali Hydropower Cascade Project in Georgia conducted by the Office of the Compliance Advisor Ombudsman (CAO), IFC's and MIGA's Independent Accountability Mechanism. The IFC and MIGA MAP addresses areas for improvement in relation to community water supply and biodiversity impact mitigation.

IFC invested in Adjaristsqali Georgia LLC (AGL) to develop a Shuakhevi hydropower scheme to provide renewable power for both Georgian and Turkish markets. The project was designed to support an increase in renewable energy output, reduction in greenhouse gas emissions, attraction of investment, facilitation of cross-border energy trade, and job creation. In 2014, IFC provided an equity investment of US$30.8 million and a loan of US$70 million. In 2015, MIGA provided a $63 million guarantee to Tata Power International Pte. Limited to cover IFC's equity investment in AGL. Per MIGA's Policy on Environmental and Social Sustainability, MIGA relied on IFC's E&S due diligence and monitoring of this joint project. The Shuakhevi hydropower plant, a 185-megawatt facility, began operations in March 2020. All debt has been fully disbursed, and in 2020, IFC sold its equity stake.

CAO initiated a compliance investigation following a 2018 complaint from a local community citing concerns about the impacts of the project on groundwater, including the loss of local springs used for drinking water, household use, and irrigation, and biodiversity impacts on the Adjaristsqali River and its tributaries resulting in the disappearance of several local fish species, including vulnerable species.

CAO's compliance investigation found non-compliance related to IFC's assessment and monitoring of environmental and social risks and impacts of AGL's operations. CAO also found IFC's noncompliance to its sustainability policy commitments as they relate to groundwater management. Further, CAO found that IFC's due diligence did not ensure proper mitigation of biodiversity impacts to achieve no net loss (NNL) for endangered and vulnerable fish species. Despite mitigation measures-such as fish monitoring and restocking-data available to CAO showed a decline in fish diversity during project construction.

In response to the CAO findings, IFC held that there were no adverse material environmental and social impacts on people or the environment which directly or indirectly resulted from the Project citing lack of evidence linking the Project to adverse impacts on community water supply. IFC however acknowledged supervision shortcomings, while noting that AGL implemented corrective measures, including tunnel grouting, lining, and integrity monitoring. AGL has not received any recent water-related grievances. Various biodiversity mitigation measures have also been implemented and there is notable progress toward NNL and sufficient e-flow levels for connectivity.

IFC has engaged with AGL on these topics, and AGL has agreed to actions in line with the spirit of CAO's recommendations, with a shared focus on outcomes of water provision and NNL of biodiversity.

The Board-approved Management Action Plan (MAP), developed by IFC and MIGA after consultation with the company, includes the following actions:

• As a voluntary action, AGL will continue to promote a long-term water supply solution by the Shuakhevi Municipality by consulting with the Municipality to understand if support is needed from AGL to implement the municipal water supply project in Rabati, and by requesting the Municipality to do maintenance on the current water supply system as a short-term improvement action.
• AGL will develop a statistical trend analysis and e-flow suitability analysis with the intention of achieving NNL of biodiversity where feasible, and if needed, will update the Operational Biodiversity Action Plan (OBAP).

CAO will monitor effective implementation of the actions set out in the MAP and will publish IFC's progress reports on its website. More information about this case, including the CAO Investigation Report, the Management Report, and the Management Action Plan are available here:

Case Webpage
Compliance Investigation Report: English, Georgian
Management Response and Management Action Plan: English, Georgian