Shimla, April 11 (IANS): The World Bank has turned down a request by public sector hydropower undertaking Satluj Jal Vidyut Nigam Ltd (SJVNL) for a $650 million loan for its project in Himachal Pradesh, the lender said Friday.

The bank's official website indicated the status of $1,150 million Luhri hydropower project, on the Sutlej river in upper Shimla, as dropped.

The environmental groups and affected people, under the banner of the Sutlej Bachao Jan Sangharsh Samiti, considered this as a major victory of the campaign to save the last remaining stretch of the Sutlej.

The decision of the World Bank came subsequent to an appraisal by the USAID team, which has been commissioned to review the environmental and social impacts of the project, said the activists opposing the project.

The activists said the team visited India in November-December 2013 and interacted with stakeholders, including the project developer SJVNL, the affected people and NGOs like Himdhara Collective in Himachal Pradesh and SANDRP in New Delhi.

"This will give a major boost to the people's belief that our voice matters in deciding our own future," said Nek Ram Sharma, of the Satluj Bachao Jan Sangharsh Samiti, in a statement.

The samiti, which has challenged the environment clearance granted to the project last year at the National Green Tribunal, has been opposing the project because of the impact of the proposed 38-km-long tunnel to be constructed as part of the project.

Fifty national groups and green activists have questioned the ministry of environment and forests about the clearance given to the project.

In a missive to former environment minister Jayanthi Natarajan in January 2013, the activists demanded cancellation of the clearance granted by the ministry's panel.

An expert appraisal committee of the ministry has recommended clearance to the project in November 2012, the letter said.

"Recommending environment clearance without first undertaking carrying capacity and cumulative impact assessment, is in violation of the Supreme Court order of May 2006," it said.

The SJVNL is a joint venture between the central and the Himachal Pradesh governments. The former holds 74.5 percent stake, while the remaining 25.5 percent is held by the state government.

However, the central government sold 10 percent equity in May 2010.

The SJVNL's maiden project is located in Kinnaur district that started its work in 2004-05.