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Hasan Mehedi
Bangladesh Working Group on
External Debt (BWGED)
Viewpoints from the Grassroots
In 2005, the Asian Development Bank (ADB) provided USD 230.00 million
for Gas Transmission and Development Project to build 165 km Bheramara-
Khulna Gas Transmission Pipeline for supplying Domestic Fossil Gas (DFG)
to Khulna city (ADB 2017). Before starting the project, ADB conducted a fact-
finding Mission and a feasibility study under 0.48 million Technical
Assistance (TA) Project (ADB 2006).
Total 946.31 acres of land was taken for the project for which 317 families
and shops were displaced (ADB 2005). Expecting adequate gas supply, ADB
provided another commercial loan of USD 84.12 million for constructing a
225 MW Dual Fuel Combined Cycle Power Plant in Khulna city (ADB 2019).
In 2015, the technical committee formed by the Government of Bangladesh
found there is no sufficient gas at source. So, the Government had to scrap
the project in 2016 and formed a probing committee to identify responsible
persons/agencies for the damage of resources (Arifuzzaman 2019).
A Short Story
Bangladesh is supposed to repay the first loan (Gas transmission)
within 20 years at an interest rate of LIBOR + 0.60% which means the
country pays more than USD 4 million every year and 80.5 million in
the loan period without any economic output from the project. Clearly
aBad Debt.
As there is no gas, the Khulna 225 MW Power Plant has been running
on highly expensive High Speed Diesel (HSD). It generates electricity
at a rate of BDT 27.60 which is 400% more than the average price.
The power plant is running on only 20% PLF and the government has
to pay around USD 38 million annually and USD 836 million in lifetime
as capacity charge (BPDB 2021).
The country has to pay back this loan (power plant) within 25 years at
an interest rate of 1.5% which means USD 47.11 million in the loan
period.
Consequences
Who is responsible for the
economic loss?
Be sure that ADB will say
WE KNOW NOTHING!
But ADB didn’t stop there. Under the Power System Expansion and Efficiency
Improvement Investment Program, ADB financed for Sylhet 150 MW Power Plant,
Baghabari 100 MW Power Plant and Shahjibazar 70 MW Power Plant too.
On the course of journey, ADB financed USD 500 million in 2018 to construct Rupsha
800 MW LNG based power plant in the premises of Khulna Newsprint Mills (ADB
2022). ADB relies on the LNG supply from India while India itself is struggleing to
collect sufficient LNG from the International market.
The project situated in a city of 1.5 million and on the River of Bhairab which is one of
the few habitats for seriously endangered Ganges Dolphin and Irrawaddy Dolphins
(ADB 2018a).
The project displaced 152 families, 33 shopkeepers, one school, one mosque and one
graveyard of the freedom fighters. Nine employees of former factory lost their jobs
(ADB 2018b).
Several clashes happened due to over-exploiting the labours, absence of health and
financial supports during the pandemic and mismanagement of the developers. The
labourers were takn to the jail ignoring their legal demands.
Rupsha 800 MW LNG Power Plant
1. The project was approved on 26 June 2018. It was clear at that
time that no gas is coming to Khulna through the pipeline ADB built.
Besides, there were not a single LNG Terminal or LNG importing
infrastructures in Bangladesh. On which basis the ADB approved
the project? To make money only or increase the stranded
assets?
2. On the day of approval, the installed capacity in the power sector of
Bangladesh was 15,953 MW while maximum demand was 10,958
MW. Overcapacity was 31.3%. After 4 years, installed capacity of
this year is 22,512 MW while maximum demand is 14,782 MW.
Thus, the overcapacity reaches at 34.3%%.
3. To compensate the stranded assets, the Government paid USD
1,541 million to the private power companies in FY 2022. This
power plant will take additional 126 million dollar per year. Why
does ADB took the duty to diminish the economy of
Bangladesh?
Consequences
Bangladesh currently has 2 LNG terminals which can
supply around 850 MMCFD imported LNG to the
national grid, while the domestic gas fields can supply
maximum 1,925 MMCFD. The gas fields are drying
and LNG price is skyrocketing everyday.
Knowing the shortage of fossil gas, ADB further
approved a project named Reliance Meghnaghat 718
MW LNG Power Plant and provided USD 200 million
for the project.
There are 5 power plants, with a capacity of 1093
MW, in operation on the Meghnaghat Island and
other 4 power plants, with a capacity of 2485 MW,
are under construction.
How come ADB approved such a project without
any Strategic Environmental Assessment?
Meghnaghat 718 MW Power Plant
1. Reliance was a convicted bank defaulter when ADB financed for the project. Reliance Power
took the money and repaid INR 1540 crore (USD 208.11 million) loan to US Exim Bank. In
this case, ADB gives life to a dirty company which was in the ICU of financial market.
2. Dhaka is one of the highest polluted and unlivable cities in the world. This power plant will
further pollute the city with 70 tonnes of hazardous air polluting particles. From this aspect,
ADB is contributing Dhaka to be totally unlivable and its citizens to suffer with
different health hazards.
3. ADB knew that Reliance would transfer its old machineries from Samalkot (Andhra Pradesh,
India) in the name of greenfield power project. Even then, ADB allowed Reliance to pollute
Bangladesh instead of discouraging to do that.
4. The power plant will take USD 103.5 million as capacity charge annually and USD 2.28 billion
in the period of 22 years which will put additional burden on the fragile economy and poor
citizens of Bangladesh. As a result, ADB is not supporting the country for economic
development rather helping to go it down.
Consequences
These two projects shows that the Asian Development Bank (ADB)
and its consultants recommended for financing the projects:
●Without assessing the negative impacts on the environment
and economy;
●Without any understanding on future fuel supply, market
volatility and national energy security;
●Without taking stocks of the country’s current energy mix
and pipeline of the projects.
●Without any idea about reducing carbon emission in
Bangladesh, let alone the zero emission target by 2050.
Which made us concerned and raised questions on ADB and it’s
consultants’ whether they have capacity to assess energy sector
and have any inner intention to make the earth livable by the end of
this century.
Do you have the capacity, really!
1. ADB has invested USD 126.72 billion in Bangladesh since
2016 after the Paris Agreement. Energy is the second largest
sector of Investments (16.1%) after Transport (19.5%) and
before the Finance Sector (15.2%). Out of USD 20.34 billion
invested in the Energy Sector of Bangladesh, only 2.87%
came to promote Renewable Energy in the country.
2. The last three projects are: (a) Power System Enhancement
and Efficiency Improvement Project (USD 200 million) (b)
Sustainable and Resilient Energy Sector Facility (USD 2
million) and (c) Dhaka and Western Zone Transmission Grid
Expansion Project (USD 300.75 million)
The basic trend is to expand Fossil fuel supporting
Transmission and Distribution Lines, not the renewables.
How come ADB demands itself as a Climate Resilient Bank
aligned with the Paris Agreement?
Investment Trend
Historical Liabilities
Power Plant Fuel Capacity
(MW)
Ashuganj 150 MW (APSCL) Power Plant (Unit 3)
DFG 129
Ashuganj 150 MW (APSCL) Power Plant (Unit 5)
DFG 129
Ashuganj 420 MW (APSCL) Power Plant (East)
DFG 400
Baghabari 171 MW (BPDB) Power Plant (Unit 1
-2) DFG 171
Bibiyana 341 MW (Summit) Power Plant (Unit 2)
DFG 341
Khulna 225 MW (NWPGCL) Dual Fuel Power Plant
DFG/HSD 225
Meghnaghat 335 MW (Summit) Power Plant (Unit 1)
DFG/HSD 337
Meghnaghat 718 MW (Reliance) LNG Power Plant
LNG 718
Rupsha 800 MW (NWPGCL) LNG Power Plant
LNG 800
Shahjibazar 100 MW (BPDB) Power Plant
DFG 100
Sirajganj 225 MW (NWPGCL) Dual Fuel Power Plant
DFG/HSD 225
Sylhet 225 MW (BPDB) Power Plant
DFG 225
Total
3,800
ADB invested for at least 12 fossil gas and diesel
based power plants in Bangladesh with a
capacity of 3,800 MW.
These power plant emits at least 21.63 million
tonnes of carbon to the atmosphere every year.
That means, those could emit 540.8 million
tonnes of carbon in their lifetime.
It is the historical liability or ecological debt ADB
owes to Bangladesh. Similarly, it has similar
ecological debt to the other developing countries
too.
1. Build own capacity through appointing appropriate resource persons
for conducting feasibility study for assessing Renewable Energy
Projects, economic viability and sustainability;
2. Must take its historical liabilities and reperate it through financing for
achieving 100% renewables in Bangladesh through utility scale and
community based distributed RE projects;
3. Must help the developing countries to formulate equitable and just
long term Renewable Energy Policies to achieve Zero Emission by
2050;
4. Stop financing Gas infrastructures and false solutions like Large
Hydro, Ammonia, Waste-to-Energy, Blue Hydrogen and Carbon
Capture, Utilization and Storage (CCUS).
5. Ensure proper monitoring and evaluation of the existing projects to
protect the labourers, local communities and environment from
destruction.
Demands
ADB 2005. Report and Recommendation of the President to the Board
of Directors on the Proposed Loans for the Gas Transmission and
Development Project. Asian Development Bank (ADB): October
2005
ADB 2006. Gas Sector Development Project. Asian Development
Bank (ADB): 15 December 2006
ADB 2019. Power System Expansion and Efficiency Improvement
Investment Program (Tranche 1). Asian Development Bank
(ADB): 27 March 2019
ADB 2017. Gas Transmission and Development Project. Asian
Development Bank (ADB): 27 Sep 2017
ADB 2018a. Environmental Impact Assessment: Rupsha 800 MW
Combined Cycle Power Plant Project. Asian Development Bank
(ADB): February 2018
ADB 2018b. Proposed Loan and Administration of Grant: Rupsha 800
MW Combined Cycle Power Plant Project. Asian Development
Bank (ADB): May 2018
References
ADB 2020. Project Completion Report: Power System Expansion and
Efficiency Improvement Investment Program (Tranche 1). Asian
Development Bank (ADB): August 2020
ADB 2022. Rupsha 800-Megawatt Combined Cycle Power Plant
Project. Asian Development Bank (ADB): September 2022
Arifuzzaman, Mohammad 2019. "১২০০ ক োটি িো ো গো". The
Prothom Alo: 17 April 2019
BPDB 2021. Annual Report 2020-2021. Bangladesh Power
Development Board (BPDB): 14 October 2021
ET 2021. "Reliance Power begins equipment exports from its
Samalkot project to Bangladesh project to cut debt". The
Economic Times (ET): 29 June 2021