What Was Inspected
The U.S. International Development Finance Corporation (DFC), Office of Inspector General (OIG) conducted an inspection of two DFC loan finance agreements. The agreements reviewed involved the FS India Solar Ventures Pvt. Ltd. (First Solar) and Biological E Limited (Bio E) projects, which are both based in India. DFC’s loan agreements with First Solar and Bio E totaled $500 million and $50 million, respectively. The OIG’s inspection objective was to evaluate each project’s compliance with agreement terms and progress with established impact metrics.
What Was Found
The OIG found that DFC officials did not receive the annual environmental and social (E&S) reports for Bio E required under the finance agreement. Additionally, DFC’s oversight of the First Solar project could be strengthened to monitor ongoing E&S compliance with deliverable requirements under the finance agreement. The OIG found mixed progress on the impact outcomes for both projects. Both the Bio E and First Solar agreements required the submission of specific document deliverables
throughout each project’s lifecycle and annual reporting on established impact outcomes.
The OIG inspection determined that:
• DFC did not adhere to established internal policies and procedures, resulting in insufficient E&S monitoring of the $50 million Bio E investment.
• DFC officials did not receive the annual E&S reports for Bio E required under the finance agreement, and one deliverable was received three months after the deadline specified in the finance agreement.
• DFC officials did not follow policies and procedures for maintaining the required project deliverables within Insight.
• DFC did not obtain required annual audits from several of First Solar’s supply chain material and component supplier vendors, nor did it verify that identified monitoring procedures for the construction of the First Solar facility were followed with respect to labor and working condition standards.
• The Bio E project made progress meeting two core impact projections, while the First Solar project is still in the process of achieving its impact projections.
