October 7, 2019
Factsheet
AIIB Funded Power System Upgrade and Expansion Project Promotes Coal & Other Fossil Fuels
Bangladesh is one of the highly populated lower middle-income country which is rapidly trying to be graduated as a middle income country instead of high climate vulnerability and disparity of income distributions. 82.2% richest quintiles in rural Bangladesh has access to the electricity while the percentage of electricity connection is as low as 37.1% among the poorest quintiles. After winning the general election in December 2008, the Grand Alliance government (led by the Bangladesh Awami League) planned to boost electricity generation to promote rapid economic development. The GOB has deregulated administrative control to attract private investment in the energy sector.
After policy reformation on the energy sector, a number of new bilateral investors started implementing a number of energy projects besides the traditional and new multilateral financial institutes including World Bank, Islamic Development Bank (IsDB), Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB). Till November 2019, AIIB has invested USD 405.00 million in four energy-related projects in Bangladesh. Power System Upgrade and Expansion Project (PSUEP) in Chattogram zone is one of the stand-alone projects to be implemented by Power Grid Company of Bangladesh (PGCB), a state-owned enterprise under Bangladesh Power Development Board (BPDB).
The project has five components: (i) Anowara to Anandabazar 400 kV double-circuit transmission line: 20 km long overhead transmission line and 7 km long underground cable; (ii) Hathazari to Rampur 230 kV double circuit underground cable at Anandabazar (iii) Madunaghat to Khulshi 230 kV double-circuit underground cable: 16 km long; (iv) 230/132 kV GIS substation at Anandabazar with two 350/450 MVA transformers; (v) 230/132/33 kV GIS substation at Khulshi with two 350/450 MVA (230/132kV) and three 80/120 MVA (132/33kV) transformers and (vi) two bay extensions at 230 kV GIS substation at Madunaghat. Chattogram (formerly Chittagong) on the southeastern coast is Bangladesh’s second largest city. The Chattogram zone is an industrial and commercial hub, contributing around 40% of the country’s industrial output and 80% of its international trade. It forms part of a coastal stretch with numerous power plants, including 13 new coal power plants either proposed or under construction. The AIIB says the project will promote Bangladesh’s goal to provide electricity for all by 2021. However, available documentation does not clarify if and how poor communities will benefit (BIC, 2019).