Bangladesh to Build Another Coal-Fired Power Plant With Chinese Funding

Kamran Reza Chowdhury
200916-BD-coal-plant-protest620 Protestors hold placards against the proposed coal-fired Rampal power plant in Dhaka, Bangladesh, Aug. 20, 2016

Bangladesh is set to construct a $2.06 billion coal-fired power plant with majority Chinese funding, despite a previous commitment by the government to reduce reliance on the energy source because of environmental concerns, BenarNews has learned.

The new 1,320-megawatt-capacity power plant was approved by Prime Minister Sheikh Hasina in March and will be built by joint venture Bangladesh-China Power Co. Limited, according to a Bangladesh power ministry brief from August obtained by BenarNews.

China will bear 75 percent of the cost, it said.

The new plant will be the twin of another coal-fired power plant at the same location, funded by the same joint venture, Nasrul Hamid, Bangladesh’s State Minister for Power, told BenarNews on Tuesday.

“We will construct another 1,320 MW, coal-fired power plant, Payra second phase, near the [existing] Payra power plant,” Hamid said.

Payra is located in the coastal Patuakhali district, about 334 kilometers south of the capital, Dhaka, where the Bangladesh government and Chinese investors are also constructing homes, roads and a deep sea port.

The new energy hub is near the Sundarbans, one of the largest mangrove forests in the world, named a UNESCO heritage site for its unique ecology.

The minister added that in the future, Bangladesh would not construct any more coal-fired plants because of environmental and cost reasons, but Payra’s second phase and four other existing coal power plants would continue operations as planned.

“The second phase [Payra] power plant will not be cancelled,” he said.

The Bangladesh government has sent a proposal to the Export-Import Bank of China for funding the new coal-fired plant, according to the Aug. 24 brief from the power ministry.

Nirod Chandra Mondal, a deputy secretary at the power ministry, confirmed to BenarNews that he prepared the brief for top government officials.

BenarNews contacted the Chinese embassy in Dhaka to get details on the funding for the new coal-fired plant, but they didn’t respond.

Worker tensions

Construction on the first phase of the Payra plant, which also cost $2 billion, began in 2016. One of its two 660 MW units started electricity production in May this year, later than the planned date of December 2019, because of tensions between Bangladeshi and Chinese workers at the plant.

In June 2019, a Chinese worker was killed in a brawl, after a Bangladeshi worker fell to his death from a terrace. It was the first time a foreign worker had been killed in a clash at a work place in Bangladesh, a labor leader said. The incident exposed apparent tensions among 7,000 Bangladeshi workers and 2,700 Chinese workers at the power plant.

In November, a second deadly incident occurred at the facility, this time a fight between two Chinese workers. One died and the other was sent back to China to face trial.

The second unit of the Payra phase I plant is expected to start commercial production from Oct. 4.

In addition to the partially operational Payra phase I plant, Bangladesh has only one other operational coal-fired project –- a 250MW capacity plant in Barapukuria, in northwestern Bangladesh.

Two other coal-fired projects, the 1,320MW Rampal plant and the 200 MW Matarbari plant, are under construction.

Critical voices

In August, Hamid reportedly told a forum at the Centre for Policy Dialogue, a Dhaka-based think tank, that the country planned to move away from coal as a source of energy and would review plans for 26 out of 29 coal-fired power plants.

“We are reviewing how we can move from coal-based power plants,” the minister said, according to the Dhaka Tribune.

Dr. M. Tamim, a former energy adviser to a previous government, told BenarNews there was no need for a coal-fired power plant because the country’s electricity generation capacity is currently 20,000MW, which is more than the demand of 11,000MW.

“Coal is the dirtiest source of power. We should not promote coal-fired power plants,” said Tamim, who is also a professor at the prestigious Bangladesh University of Engineering and Technology (BUET) in Dhaka.

“Currently, our domestic demand of electricity is much lower than the production capacity. Why should we opt for another project like Payra second phase?”

Anu Muhammad, a professor at Jahangirnagar University in Dhaka who leads a civil society movement against coal-based power plants, accused the government of hypocrisy.

“The government says it will not implement coal-fired plants. At the same time, it is seeking funds from China to build a massive coal-fired plant. This is a double standard,” said Muhammad.

“The government can explore and exploit our own gas resources in the Bay of Bengal, but instead it is inviting coal-fired plants to secure the interests of foreign companies and their local agents.”

Muhammad noted that Bangladesh is one of the countries worst affected by climate change and said that building a coal plant on one of its coastal regions would destroy biodiversity.

Coal-powered electricity is also more expensive because Bangladesh has to import coal, according to Arun Karmaker, editor of a magazine on energy and power.

“The price of one unit of electricity produced from imported coal would be 8 taka (U.S. $0.094). On the other hand, one unit price of electricity from liquefied natural gas and renewable sources would be less than 8 taka,” Karmaker told BenarNews.

“Besides, LNG and the renewable sources are comparatively cleaner than coal.”


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