Environmentalists urge cancellation of Matarbari coal power plant project

Environmental organizations have demanded the cancellation of the 635-megawatt coal power plant project in Cox’s Bazar's Matarbari, during a press conference held on Tuesday (May 6) at the Dhaka Reporters’ Unity (DRU).

The press conference was organized by the Bangladesh Working Group on Environment and Development (BWGED) and the Coastal Livelihood and Environmental Action Network (CLEAN). Co-organizers included the Bangladesh Law Association (BELA), the Environment and Development Forum (FED), the Maheshkhali Public Safety Forum, and Songshoptaque.

During the conference, BWGED Member Secretary Hasan Mehedi said, "The agreement to build the coal-based power plant using the controversial technology, which was canceled under a contentious law, is entirely unethical and illegal. This agreement intends to impose an additional 3,059 crore Taka capacity charge burden on the public."

He explained, "Under the Electricity and Energy Supply (Special Provisions) Act, the previous government granted Orion Group permission on September 29, 2013, to build a 635-megawatt coal-based power plant in Gazaria, Munshiganj. Following this, a power purchase agreement (PPA) was signed between the Power Development Board (PDB) and Orion Power Unit-2 Dhaka Limited on April 21, 2016."

He further said, "According to the agreement, electricity production was expected to begin within 45 months or by January 2020. However, Orion Group failed to start production within the set timeframe, and construction work has not yet started. As a result, in February 2022, PDB recommended relocating the project to Matarbari and extended the contract until December 2026."

He stated, "After several extensions, the project's deadline was most recently extended until December 2030 in July 2024. Without this extension, the agreement would have been automatically canceled. On September 12, 2024, BWGED, under its sponsorship, organized a press conference where civil society raised concerns about the issue and appealed to the Chief Advisor, Energy Advisor, and Environment Advisor to not approve any further extensions."

The government’s three state-owned banks have jointly approved a loan of 10,579 crore Taka for the Orion coal power plant project. Ahsan H. Mansur from the Policy Research Institute has opposed this loan and advocated for financing renewable energy projects instead. While a loan for a solar power project was canceled in 2024, the coal project loan remains unaffected.

Hasan Mehedi said, "This power plant will not be completed by 2026. If construction proceeds later, the goal of achieving 100% renewable energy by 2050 will become unattainable. Moreover, the change in location will increase land leasing and fuel transportation costs, which should be lower than the amounts outlined in the 2016 agreement. These two reasons alone make it essential to cancel the power purchase agreement (PPA)."

"On May 4, 2024, a public petition, with signatures demanding the cancellation of the proposed Orion 635-megawatt coal-based power plant, was submitted to Dr. Muhammad Yunus, the Chief Advisor of the interim government," he added.

In light of the environmental, climate, public health, and economic risks, BWGED has made a strong call for the cancellation of Orion's coal-based power project. In this regard, 144 civil society organizations across the country have submitted four separate petitions to the relevant authorities at the Ministry of Finance, Ministry of Environment, Forest and Climate Change, and the Ministry of Energy and Mineral Resources.