For immediate release. 15 December 2025, Kathmandu, Nepal. 

The role of the International Financial Corporation (IFC) in supporting an environmentally destructive cable car project in Nepal is under investigation by its internal watchdog, the Compliance Advisor Ombudsman (CAO), following a complaint raised by Indigenous leaders.

The controversial $22m Pathivara cable car is being built by one of the country’s biggest conglomerates, IME Group, on the sacred Mukkumlung mountain in the Himalayas. The project has already felled over 10,000 trees in habitats of endangered snow leopards, red pandas and Himalayan musk deer, and Indigenous protestors have faced violent repression by armed police.

From August 2022 to July 2024, the World Bank Group’s private sector lending arm – the IF – gave advisory support to IME Group to build this cable car and three others.

“The cable car project is tantamount to cultural genocide of the Limbu nation in violation of our rights guaranteed in Nepal’s constitution, Treaty of 1774 with the Gorkha kingdom, and the UN Declaration on the rights of Indigenous Peoples,” said Advocate Shankar Limbu, Vice-Chair of LAHURNIP.

The mountain, its forests, and its biodiversity, are of paramount importance to the Limbu nation. In August 2025, Indigenous leaders – supported by lawyers and NGOs – filed a complaint against the IFC for breaching its own safeguarding standards, resulting in human rights abuses and the destruction of cultural heritage. The complaint alleges that the IFC did not ensure that the IME Group applied IFC’s safeguards to the project, which are meant to provide Indigenous peoples with protections against environmental and human rights abuses.

“The IFC’s own Performance Standards say that Indigenous Peoples have the right to give their Free Prior and Informed Consent to projects on their lands. But no one ever asked us whether we want this cable car project,” explained complainant Saru Singak of Mukkumlung Conservation Joint Struggle Committee. “The project is destroying our forests, mountain and nature sacred to us. It disrespects our cultural heritage and our religion.”

The project encroaches on Kanchanjunga Conservation Area. Despite the high risks of social and environmental impacts, no formal Environmental Impact Assessment was carried out by IME Group. Instead, a much more limited Initial Environmental Examination was completed and only done after project approval – in breach of national laws. Section 6 of Nepal’s Environment Protection Act 1997 requires an EIA for any project that has a significant environmental impact.

Although the IFC exited the Pathivara project in 2024, it continues to invest in Global IME Bank, providing ongoing leverage and influence. This largest commercial bank in Nepal is part of the IME Group which is involved in energy, manufacturing, infrastructure and trading. IME Group’s powerful owner is also the President of Nepal’s Federation of Nepalese Chambers of Commerce and Industry. The IFC has provided over $50 million to IME Group over the past decade, plus a $500 million trade finance guarantee.

“IFC’s support to the IME group with strong influence in Nepal has contributed to the injustices against the Limbu people, whereby security forces have caused unprecedented reprisals against community leaders and activists,” says Prabindra Shakya, Convenor of AIPNEE. “The complaint also shows IFC’s own critical flaws in its project disclosures and application of its Performance Standards, including for Indigenous Peoples and particularly for its advisory projects.”

On 12 December 2025, the CAO accepted the case as eligible for investigation. The IFC only disclosed the advisory project publicly in July 2024 – nearly two years after investing – and only confirmed its involvement in the Pathivara cable car in writing to affected communities on 19 May 2025, nine months after it had exited the investment.

In the complaint, Indigenous leaders and supporting organisations call on the IFC to release all project documents, and urge that: all encroachment on sacred sites ceases; security forces are withdrawn and the violence ends; an independent investigation into human rights abuses is commissioned; and construction is stopped until the project is brought into compliance and grievances are resolved, including through peacebuilding and reconciliation.

The case will now proceed to assessment for 90 days, before parties will decide whether to engage in mediation or to advance to a full compliance investigation.

“We welcome the fact that the CAO has found this complaint eligible, and look forward to working with investigators to uncover how things went so badly wrong. The IFC is currently reviewing its Performance Standards and must learn lessons on consultation, safeguarding cultural heritage and biodiversity, respecting Indigenous Peoples’ rights, and protecting them against retaliation,” says Kate Geary, Programme Director at Recourse.

“While our case against the project is sub-judice in the Supreme Court and has faced delays, the CAO investigation into the complaint against the cable car project should move swiftly to remedy ongoing impacts of the project, including retaliations against the local communities,” added Advocate Shankar Limbu.

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NOTES TO EDITORS

Complainants to the case are leaders from the Indigenous Peoples Organisation of Limbu (Yakthung) nation, Kirat religious organisation and the Mukkumlung Conservation Joint Struggle Committee, supported by their legal counsel, Lawyers’ Association for Human Rights of Nepalese Indigenous Peoples (LAHURNIP), and advised by Asia Indigenous Peoples Network on Extractive Industries and Energy (AIPNEE) and Recourse.

The formal complaint was filed to the accountability mechanism of the International Finance Corporation, the Compliance Advisor Ombudsman (CAO) on 26 August 2025.

For further information and updates, please contact:

• Shankar Limbu, LAHURNIP: shankar1database[at]gmail.com, +977 9851 007932
• Prabindra Shakya, AIPNEE: prabin[at]aipnee.org, +977 9860 980745
• Kate Geary, Recourse: kate[at]re-course.org, +44 7393 189175

Image: Protest against the cable in March 2025. Source: Nabin Babu Gurung/Setopati