China is moving aggressively into renewable energy partnerships in Bangladesh, where it already is a major investor in the coal-based power sector.
State-owned entities North-West Power Generation Co. Ltd. (NWPGCL) of Bangladesh and China National Machinery Import & Export Corporation (CMC) signed a memorandum of understanding in Dhaka on Tuesday to develop solar and wind power generated plants, officials said.
“The Chinese have huge investments in Bangladesh’s power sector but this is the first time [they] have signed an MoU for implementing renewable power projects,” Saiful Hasan Chowdhury, spokesman for Bangladesh’s Power Development Board, told BenarNews.
NWPGCL, which comes under the board, and CMC will form a 50:50 joint venture company to implement the projects totaling 500 megawatts of renewable energy generation capacity, he said.
Chowdhury said the total cost of the projects would be determined when they are finalized but a report by PV Magazine, a trade-related publication, said “China will supply an estimated U.S. $500 million with the host nation freeing up land for the projects.”
The new Chinese investment in Bangladesh comes under Beijing’s One Belt One Road initiative that stretches to 70 countries. The initiative aims to build a 21st-century Silk Road by connecting the countries through networks of railways, bridges and ports, linking China with Africa, Europe and Southeast Asia.
Some view the initiative as a vehicle to spread Chinese influence abroad through non-transparent projects, which could saddle economies with unsustainable debt.
CMC and NWPGCL have partnered since 2014 to implement coal-powered power plants, one of which was at the center of controversy after a fight between Chinese and Bangladeshi workers at the project site some 329 km (206 miles) south of Dhaka.
The violence at the construction site of the partly-built, Chinese funded Payra plant, which employs about 7,000 Bangladeshis and 2,700 Chinese, broke out after a Bangladeshi worker fell to his death from a terrace. Rumors spread that he was pushed by a Chinese national.
One of the renewable energy projects – a wind powered plant – will be sited near the coal-powered Payra plant.
“According to our renewable energy policy, we will produce 10 percent of our total power demand from renewable sources. So, we need to enhance production of renewable energy sources,” Chowdhury said.
Less than one percent of electricity in Bangladesh comes from renewable energy sources,
Professor M. Tamim, an energy specialist and former government adviser, told BenarNews.
“One of the problems of renewable energy is that we are a land hungry country. Renewable energy needs huge space,” he said.
Since 2016, China has massively expanded its investment in Bangladesh – from U.S. $61 million in 2016 to U.S. $1.03 billion in 2018, according to official government figures.
During a visit by Prime Minister Sheikh Hasina to Beijing in July, Bangladesh and China inked several agreements including one that relates to China’s extension of loans worth U.S. $1.7 billion for Bangladesh’s power sector, reports had said.