Bangladesh scraps nine coal power plants as overseas finance dries up

• 3 years ago (2021-03-10)
• David Flin

Asia 892 Coal 296

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Bangladesh has announced that it plans to scrap nine new coal projects as the cost of imported coal rises and overseas investors cut financing for such projects. Habibur Rahma, Power Secretary of Bangladesh, decided to drop the planned coal-fired power plants with a combined capacity of 7461 MW.

More details of Bangladesh’s transition away from coal are expected in summer 2021, when the Government outlines its power sector master plan.

Nasrul Hamid, Energy Minister for Bangladesh, said that procuring coal had become a major problem after China struck a three-year supply deal in November 2021 to buy $1.5 billion of thermal coal from Indonesia, Bangladesh’s main supplier of coal.

Although the Bangladesh Government has not yet disclosed the list of projects to be axed, it is believed that one of them will the proposed 1200 MW plant being developed by Japanese energy company Sumitomo in Matarbari, south-eastern Bangladesh.

Import of coal has also been damaged by major financiers distancing themselves from fossil fuel projects. The Asian Development Bank and Asian Infrastructure Investment Bank have both said they will stop financing coal projects. In addition, the region’s biggest financiers of coal projects, Japan and South Korea, are cutting back on their support for such projects as a result of mounting international pressure.