IFC Board Approves Action Plan for CAO Investigation Related to IFC’s Investment in Baynouna Solar Energy in Jordan

Washington, D.C., April 8, 2025—The IFC Board of Directors has approved IFC’s Management Action Plan in response to an investigation of IFC’s investment in Baynouna Solar Energy Company in Jordan conducted by the Compliance Advisor Ombudsman (CAO), IFC’s independent accountability mechanism.

For over a decade, IFC has supported the Government of Jordan’s efforts to develop its renewable energy sector, investing and mobilizing more than $900 million in the sector and paving the way for $4 billion in investments in renewable energy projects. In 2018, IFC provided financing for the development, construction, operation and maintenance of a 200-megawatt greenfield solar photovoltaic plant by the Masdar Baynouna Solar Energy Company. The $260 million project is the largest solar energy project in the country, supplying the annual power needs of approximately 160,000 homes, and displaces the carbon dioxide equivalent to 4 percent of the annual energy consumption of Jordan.

CAO’s investigation responds to a 2020 complaint from members of the Al Balqa tribes, stating that they were not properly consulted about the use of land for the solar plant despite their historical use of the land for cultivation of fodder and grazing of livestock. The complaint was submitted to CAO nine months before the plant became operational and first went through a dispute resolution process that was unsuccessful. The complainants allege their rights were violated, resulting in loss of livelihoods, assets, and access to land and natural resources. They also alleged that IFC and its client failed to set up an effective project-level grievance mechanism and improperly excluded them from project-related stakeholder engagement.

CAO’s investigation, which concluded in October 2024, found a series of non-compliances with IFC’s environmental and social (E&S) policy requirements during both pre-investment due diligence and project supervision. CAO found that IFC’s pre-investment due diligence was not commensurate with the scale of the project and its potential impacts. Specifically, CAO found that  IFC did not require its client to collect the necessary social baseline data, assess land use and traditional usage, or consult with a wide enough range of affected communities, including herders and tribal groups. CAO also identified non-compliances during IFC’s supervision related to stakeholder engagement and the documentation and disclosure of the project-level grievance mechanism. CAO found that herders faced economic displacement without proper compensation or livelihood restoration, and Al Balqa tribes lost access to traditionally used land.

"IFC acknowledges that this project may have benefited from more systematic socio-economic baseline data collection and impact assessment that could have identified additional stakeholders for consultations during project appraisal," said Khawaja Aftab Ahmed, IFC’s Director for Middle East, Pakistan and Afghanistan. “We appreciate the willingness of both the complainants and the client to engage with IFC in this process and look forward to future cooperation in implementing the forthcoming social impact assessment as part of the agreed Management Action Plan.”

The Board-approved Management Action Plan (MAP) was developed in consultation with complainants and the client in response to CAO’s investigation and its recommendations. The MAP calls for:

• The development of a social impact assessment by IFC’s client to provide conclusive information on project-affected people and, as needed, identify adequate and feasible mitigation measures aligned with applicable Performance Standard requirements.
• If the social impact assessment finds economic displacement resulting from the project, the development and implementation by IFC’s client of a livelihood restoration plan.

Prior to the approval of this Management Action Plan, IFC also updated its Environmental and Social Review Procedure to strengthen internal guidance and controls to clarify pre-Board requirements to identify and analyze the feasibility of addressing and mitigating E&S risks and impacts of an investment to meet policy requirements in a reasonable time.  

“The concerns raised in this case underscore the importance of incorporating robust social impact assessments within IFC’s due diligence process,” said Janine Ferretti, CAO's Director General. “We welcome IFC’s commitment to work with its client to complete this assessment and ensure project-level action to identify a pathway for remedy for the Al Balqa tribes and herding communities.”

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 and IFC Management Action Plan, are available here: 

• Case Webpage.
• CAO Investigation Report in English and Arabic.
• IFC Management Report and Management Action Plan.

About CAO

The Compliance Advisor Ombudsman (CAO) is the independent accountability mechanism of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group. CAO's mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective, and constructive, improve environmental and social outcomes, and foster accountability and learning to reduce the risk of harm to people and the environment. For more information, visit www.cao-ombudsman.org.