The Musi River has a story worth telling—and worth saving. Once a lifeline for Hyderabad, it is today a degraded, polluted waterway, shaped by decades of unplanned growth and weak wastewater governance. The Telangana government’s ambition to rejuvenate it is, in principle, the right move. But if the state is counting on international financing for a project of this scale, it must also follow the process and requirements that such financing entails.

International financing institutions (IFIs) operate under environmental and social (E&S) policy frameworks that set binding requirements for borrowers. These frameworks — whether of ADB, the World Bank, or others — are not an afterthought to engineering. They influence core choices on siting and design, and they shape the sequence of actions from planning to implementation. In practical terms, they require governments to show, with evidence, that project benefits can be achieved while avoiding or minimising harm to people and the environment.

The scale of what is proposed on the Musi is now a matter of public record. A Telangana government gazette notification dated December 16, 2025, indicates an acquisition extent of 3,279 acres and 10,017 properties across a 55-km stretch through the city. Public reports also indicate that notifications have been issued inviting landowners in certain reaches to consider Transferable Development Rights as part of compensation arrangements. Given its scale and resettlement implications, the Musi programme would likely be classified as high risk by IFIs, triggering heightened scrutiny and robust due diligence.

So, where should the government begin if it wants the confidence of IFIs? With the mitigation hierarchy — the organising principle of E&S risk management. First, avoid adverse impacts. If avoidance is not possible, minimise. Then mitigate. Where impacts remain, they must be remedied — including compensation at full replacement cost and support to restore livelihoods.

Avoidance begins with a documented alternatives analysis. IFI standards require the borrower to test feasible options — different alignments, footprints, design solutions, construction methods, and sequencing — and show that the chosen approach achieves objectives while causing the least harm. Could the footprint be reduced in dense stretches? Could critical infrastructure be redesigned to spare established settlements? Could phased implementation reduce a single, city-wide shock to housing and livelihoods? These questions must be answered on paper, with evidence, in time to shape design—not after acquisition decisions harden into inevitability.

A high-risk classification also triggers heightened requirements: a robust E&S impact assessment covering direct, indirect, and cumulative impacts; a credible baseline on households, livelihoods, and vulnerability; and clear arrangements for managing risks during implementation. This must be matched by a practical management plan, a time-bound implementation roadmap, and clear institutional accountability. Where land acquisition is involved, it also means a resettlement instrument that identifies affected persons and assets, and assesses impacts related to both physical relocation and economic displacement, and sets out eligibility, entitlements, budgets, and implementation responsibilities.

On compensation and resettlement, IFI standards emphasise three principles. First, compensation is generally required at full replacement cost — meaning the cost of replacing what is lost, including transaction costs, without depreciation — alongside assistance to enable affected people to restore, and preferably improve, living standards and livelihoods. Second, protections extend beyond formal titleholders; informal occupiers and vulnerable groups cannot be excluded from entitlement frameworks simply because they lack land deeds. Third, sequencing matters: people should not be displaced until compensation is paid and resettlement and livelihood measures are in place, with transitional support funded and ready.

Transparency is another non-negotiable. IFIs require early disclosure of draft E&S documents in accessible languages and formats, and they place a premium on meaningful consultation — not a one-way presentation after key decisions are made, but a structured process that informs design choices, risk trade-offs, and mitigation commitments. A project-level grievance mechanism must operate from the outset, be free of charge to complainants, and be trusted enough that affected communities use it rather than resorting to confrontation or litigation.

None of this argues against rejuvenation. On the contrary, urban river restoration can deliver public health, climate resilience, and liveability gains — if safeguards are built into design and sequencing. The issue is that IFIs will look for a defensible chain of evidence: alternatives were tested; impacts were avoided where feasible; residual impacts were minimised and mitigated; those who bear the burdens are protected; and the public can see, question, and influence decisions before they become irreversible.

If the state proceeds without meeting these requirements, international financing will be far harder to secure — and delays, disputes, and reputational costs become more likely.