Orion Matarbari 635 MW Coal Power Plant (Bangla)

Under the controversial Bangladesh's Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010, the former government approved Orion Group’s 635 MW coal-fired power plant project in Gazaria, Munshiganj, on 29 September 2013. Subsequently, on 21 April 2016, a Power Purchase Agreement (PPA) was signed between the Bangladesh Power Development Board (BPDB) and Orion Power Unit-2 Dhaka Limited. According to the agreement, commercial power generation was scheduled to commence within 45 months of the contract date by January 2020.

However, Orion not only failed to begin power generation within the stipulated time but also failed to initiate construction. As a result, in February 2022, BPDB advised relocating the project to Matarbari or Maheshkhali and extended the deadline to December 2026.

To meet the new deadline, construction should have started by March 2022, yet Orion failed to commence work again. Although this warranted the cancellation of the PPA, BPDB instead extended the project timeline to December 2027 in October 2023. Further signs of failure prompted yet another extension in July 2024, until December 2030. Without this extension, the PPA would have automatically expired.

On 12 September 2024, civil society organizations held a press conference urging the Honorable Chief Advisor and Energy and Power Advisor and Environment (MoEFCC) Advisor to cancel the agreement immediately.

It is now evident that the plant cannot be constructed by 2026. Any construction beyond that would severely jeopardize Bangladesh’s commitment to achieving 100% renewable energy by 2050. Moreover, the relocation of the plant has altered both land lease and fuel transportation costs, which should now be significantly lower than the original estimates in the 2016 agreement. These two facts alone warrant immediate cancellation of the power purchase agreement (PPA).