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Home › Dodgy Deals ›
Dodgy Deal
Payra Port Coal TerminalBangladesh

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

climate@banktrack.org

Last update: 2023-02-01 00:00:00
Location of the Payra Port, in Bangladesh. Photo: Google Earth

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Profile by:
BankTrack
Contact:

climate@banktrack.org

Last update: 2023-02-01 00:00:00
Why this profile?

Why this profile?

The Payra Port coal terminal will allow Bangladesh to import an additional 20 million metric tons of coal per year, and will play a pivotal role in Bangladesh's plans for a massive expansion of coal power plant construction in the coming two decades.

What must happen

HSBC must withdraw from its plans to arrange finance for the dredging of Payra Port, and other banks should shun involvement in the lending consortium.  

Banks need to prohibit all financing for all projects in coal mining or coal power, and all companies with operations or expansion plans in these sectors.

About
Sectors Coal Electric Power Generation , Construction
Location
Status
Planning
Design
Agreement
Cancelled
Operation
Closure
Decommission
Website http://www.pppo.gov.bd/projects-3rd-sea-port_payra-port-coal-terminal.php

Payra Port is located in the Patuakhali district in South-central Bangladesh in the Barisal Division. The port is partially constructed, and began limited operations in 2016. It was opened to help loading and unloading of goods more quickly than Chittagong port, the largest port in Bangladesh.

The Payra Port Authority plans to expand the port with the construction of a deep-sea coal and bulk goods terminal, which would make Payra the country's first deep-sea port.

Currently Bangladesh imports about 1.5 million metric tons of coal per year. Once all the associated coal plants are commissioned, the Payra Port will allow an additional 20 million metric tons of coal to be imported from countries including Australia, Indonesia, India and South Africa. The year by which this will occur is unspecified. Five coal-fired power plants and an LNG terminal are already under construction in adjacent areas of Payra Port.

The Payra Port is expected to require a USD 16 billion investment in total. This project is part of the Bangladesh-China-India-Myanmar Economic Corridor, which was initially put forth under China's Belt and Road Initiative. 

As of 10 March 2022, however, the government of Bangladesh cancelled the construction of the coal terminal as the project lacks economic viability.

Impacts

Impact on human rights and communities

Land acquisitions The Dhaka Tribune reported in 2019 that 1,743 families have already been displaced for the construction of the Payra Port. As of February 2019, only part of the compensation sum that they were promised has been paid to the displaced families. Farmlands are also being acquired for the construction of the coal power plants, threathening the livelihoods of local people who cannot continue their crop production.

Fishing livelihoods The Payra Port Coal Terminal under construction is located near the cross section of the Andharmanik River and Golachipa River. The first river is one of the river spots declared as an Ilish sanctuary, and the Golachipa river is the migration route for these fish. Only 10 kilometers upstream from the power plant side another Ilish sanctuary is located, the Tentulia River. The location of the coal power plant is therefore detrimental to the life of the Ilish, one of the most sensitive aquatic species in the world. Around half a million fishermen are dependent upon Ilish production for their livelihoods.

Health impact Once completed, the power plants will emit 600-800 kg of mercury per year into the surrounding area. It is estimated that one third of this will be deposited onto the land and fresh water systems in Bangladesh, which will ultimately increase the mercury concentration in the food. The mercury pollution alone will reach an area with 500,000-1,500,000 inhabitants.

The cumulative health impacts over 30 years of operation will lead to 35,000 deaths, 60,000 asthma emergency room visits (of which 25,000 children), 26 million sick leave days, 39,000 preterm births, and 17,000 strokes.


Impact on climate

Climate change The government of Bangladesh has set the goal to become a developed country by 2041. Part of that goal includes almost quadrupling the country's net electricity generation capacity by that time. Under these plans, the share of installed power capacity from coal, currently about 3 percent, will expand to 32 percent by 2041. Since Bangladesh has limited coal supplies of its own, most of the coal needs to be imported from other countries, including Australia, India, Indonesia and South Africa.

The coal terminal at Payra Port will open the floodgates for coal pollution the likes of which Bangladesh has never seen before. Currently Bangladesh imports about 1.5 million metric tons of coal per year. At peak operation, Payra Port would import 20 million metric tons of coal each year, to feed eight proposed and under-construction coal power stations with a total capacity of 10 gigawatts, making it the largest coal power cluster in South Asia and the second largest in the world. Over their lifetimes, these plants would collectively emit more than three times as much carbon dioxide as the whole of the UK did in 2018.

Financiers

HSBC is reported to be acting as lead arranger for a EUR 865 million loan to finance dredging works for the Payra Port, according to The Asia Times. The financial times of Bangladesh reported in July 2020 that dredging of Payra Port was delayed due to the COVID-19 pandemic.

As of 14 December 2021, HSB said to commit to phase out thermal coal financing, in a net zero aligned timeline. This new policy was approved by shareholders at the 2021 Annual General Meeting (AGM), to phase-out thermal coal financing in the EU and OECD by 2030, and to global phase-out by 2040.

Institution type
Finance type
Year
Companies

China State Shipbuilding Corporation (CSSC) is responsible for the construction of ancillary facilities and utility services at Payra Port. The total value of the contract is USD 120 million.

Jan de Nul

Belgium
Website
In January 2019, Payra Port authority contracted company Jan De Nul for dredging of a 75 kilometers long and 100–125 meters wide main channel. In December 2020 Jan de Nul signed a contract with the Payra Port Authorities in order to maintain the depths of the exisitng port access channel. As of February 2021, the government scrapped the public-private-partnership (PPP) deal with the Belgian company Jan de Nul on dredging works along the Rabnabad channel of the Payra Port after finding that the estimated cost of Tk 8,643 crore for the works was too high.

North-West Power Generation Company

Bangladesh
Website
No companies
Governance
Norms & standards

Applicable norms and standards

1992 United Nations Framework Convention on Climate Change
OECD Guidelines for Multinational Enterprises
The Paris Agreement
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

China Exim Bank exits Payra Coal Power Plant (Phase-II)

2022-06-05 | Bangladesh Working Group on IFIs
BankTrack news BankTrack blog Partner news Partner blog

Govt steps back from coal handling terminal at Payra Port

2022-03-14 | Business Insider Bangladesh
BankTrack news BankTrack blog Partner news Partner blog

Govt scraps coal terminal project

The government has scrapped the coal terminal construction project under the public-private-partnership (PPP) modality at the Patuakhali Payra port considering adverse effects that may stem from the terminal on the environment and climate
2022-03-10 | The Business Standard
BankTrack news BankTrack blog Partner news Partner blog

Payra downgraded to seaport from deep seaport

2021-04-19 | The Business Standard
BankTrack news BankTrack blog Partner news Partner blog

Maintenance dredging work underway at Payra port

2021-01-16 | unb.com
BankTrack news BankTrack blog Partner news Partner blog

Jan De Nul signs Payra Port contract

2020-12-17 | DredgingToday.com
Blog
BankTrack news BankTrack blog Partner news Partner blog

Five years lost - How the finance industry is blowing the Paris carbon budget

2020-12-10 | Paris | urgewald, Center for Energy, Ecology, and Development (CEED), Friends of the Earth US, Rainforest Action Network, Reclaim Finance, ReCommon
BankTrack news BankTrack blog Partner news Partner blog

Payra deep seaport to see more delays as infrastructure development takes time

2020-11-24 | The Daily Star
BankTrack news BankTrack blog Partner news Partner blog

Air quality, health and toxics impacts of the proposed coal power cluster in Payra, Bangladesh

2020-11-23
Blog
BankTrack news BankTrack blog Partner news Partner blog

Campaigners reject HSBC's Net-zero ambition, targeting billboards over 'climate colonialism'

2020-11-02 | Brandalism
BankTrack news BankTrack blog Partner news Partner blog

Govt to dredge Payra Port channel on emergency basis

2020-10-28
BankTrack news BankTrack blog Partner news Partner blog

CSSC secures $120m Payra Port contract

2020-07-07 | Splash247.com
Blog
BankTrack news BankTrack blog Partner news Partner blog

New research: HSBCs coal stake equivalent to nearly 40 years of UK emissions

2020-04-22 | Market Forces
Blog
BankTrack news BankTrack blog Partner news Partner blog

Banking on Climate Change – Fossil Fuel Finance Report Card 2020

New report reveals global banks funneled USD 2.7 trillion into fossil fuels Since Paris Climate Agreement, with financing on the rise each year 
2020-03-18 | Nijmegen | BankTrack, Indigenous Environmental Network, Oil Change International, Rainforest Action Network, Reclaim Finance, Sierra Club
BankTrack news BankTrack blog Partner news Partner blog

Japanese firms to invest $6.4b

2020-02-25 | The Daily Star
BankTrack news BankTrack blog Partner news Partner blog

Payra port re-tenders terminal dredging

2020-01-16 | Dredgingandports.com
BankTrack news BankTrack blog Partner news Partner blog

Costs, time to complete Payra Sea Port Project increase

2020-01-14 | Tbsnews.net
BankTrack news BankTrack blog Partner news Partner blog

HSBC bosses spin yet more climate rhetoric on coal finance for developing countries

2019-04-15 | Market Forces
BankTrack news BankTrack blog Partner news Partner blog

'Coal power plants in coastal areas will worsen climate risk'

2019-03-31 | The Daily Star
BankTrack news BankTrack blog Partner news Partner blog

Frustration mounts over irregularities in Payra port compensation process

2019-02-17 | Dhaka Tribune
BankTrack news BankTrack blog Partner news Partner blog

Deal inked to prepare Payra Port master plan

2019-02-14 | The Independent Bangladesh
BankTrack news BankTrack blog Partner news Partner blog

HSBC’s cynical coal policy leaves Bangladesh, Vietnam and Indonesia open for business

2019-01-23 | Market Forces
BankTrack news BankTrack blog Partner news Partner blog

Payra coal-fired power plant a threat to Ilish sanctuaries

2017-06-12 | Dhaka Tribune
BankTrack news BankTrack blog Partner news Partner blog

Farmlands near Payra in peril

2016-10-03 | The Daily Star
Resources
Documents
Links
2020-03-13 00:00:00

Payra coal-fired power plant

Finance info
Other document
2020-03-13 00:00:00 | IJGlobal - © Copyright 2020 IJGlobal, all rights reserved
2020-03-13 00:00:00

Payra gas-fired power plant

Finance info
Other document
2020-03-13 00:00:00 | IJGlobal - © Copyright 2020 IJGlobal, all rights reserved
2019-11-30 00:00:00

Choked by Coal

The Carbon Catastrophe in Bangladesh
NGO document
2019-11-30 00:00:00 | Transparancy International Bangladesh, Waterkeepers Bangladesh, Bangladesh Poribesh Andolon, 350.org, Market Forces

Tell HSBC to withdraw from Payra coal port

Market Forces campaign webpage

Updates

2022

2022-03-10 00:00:00 | Government cancels construction coal terminal

The government of Bangladesh announced to cancel the construction of the coal terminal at Payra Port due to a lack of response from private investors in the past eight years.

Finance Minister AHM Mustafa Kamal approved the cancellation at a virtual meeting of the Cabinet Committee on Economic Affairs on Thursday March 10. Construction of such coal-based projects are now being discouraged in the country, as the government dropped 10 coal-fired power plant projects last year which included Patuakhai (660X2) 1320 MW, Uttarbanga 1200 MW thermal plant, Khulna 565 MW, and Maheshkhali 1320 MW.

The Prime Minister said the project was not economically viable. “That’s why I moved away from the project. We can benefit more from other projects.”

The project director of Developing Infrastructures and Support Facilities for the operation of Payra Deep Sea Port stated that two jetties instead of a terminal could serve the purpose of coal unloading. The state-owned Power Grid Company of Bangladesh (PGCB) will also build another jetty.

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