When powerful storm surges hit this low lying country, the world’s largest mangrove forest, the Sundarbans, provides a natural barrier which protects hundreds of thousands of lives. But this could change if the joint venture company, Bangladesh-India Friendship Power Company Ltd (BIFPCL), composed of India’s National Thermal Power Company (NTPC) and state-owned Bangladesh Power Development Board (BPDB), moves forward with Rampal, a proposed 1,320 megawatt coal power plant. The Export-Import Bank of India plans to loan USD 1.6 billion to BIFPCL, in essence financing the entire project debt. The bank is aiming to reach financial closure by July 2016.
We are calling on Exim Bank India to pull out of financing for the Rampal coal plan.
The Rampal coal power plant is a no-go deal
If Exim Bank India were to drop its financing plans for the construction of the Rampal plan, it would not be the first financial entity to do so. The serious destructive impacts this project will have on the Sundarbans has already pushed major institutions to drop the project. The Norwegian Government Pension Fund Global (GPFG) excluded NTPC from their investment portfolio on recommendation of its Council of Ethics: “There is an unacceptable risk that NTPC will contribute to severe environmental damage through the building and operation of the power plant at Rampal, including related transportation services”, the report said. Additionally three large French banks made it public as well, “Credit Agricole SA Group has no plans to finance the Rampal coal power plant, in Bangladesh, given our intervention rules and the risks associated with this project”, Stanislas Pottier, global head of sustainable development, said in an emailed statement.
Another incentive to stay away from the Rampal coal plant is that the very nature of the project would be illegal on Indian soil. The Ministry of Environment and Forests of India outlines the guidelines for site selection of coal power stations: “Locations of thermal power stations are avoided within 25 km of the outer periphery of the following: […] Ecologically sensitive areas like tropical forest”. Yet, the proposed Rampal plant site is 14 kilometers away from the Sundarbans forest. No company would be allowed to implement this project in India, much less finance it.
The project threatens the livelihoods of over two million of our fellow world citizens
The proposed 1320 MW power plant project (made of two generating units of 660MW) will cause irreparable damage to the livelihoods of over two million dependent on the Sundarbans; most rely on agriculture and shrimp cultivation, and fishing but also wood, and palm collecting. All these livelihoods come under threat as the support infrastructure of the Rampal power plant has already been built. The most deadly impact will be on fisheries. The plant will discharge toxic water in the Passur River, oil and chemical wastes from coal-carrying vessels will also contaminate the water. The mangrove-supported habitat will suffer, and shrimp farms and homestead fishponds will be no exception.
In total 95 percent of the land acquired is agricultural land. The production of crops will be decreased since fertility will reduce drastically as a result of coal related pollution from the very beginning of the plant operation. The wastes from coal such as fly ashes and bottom ashes will contaminate air and water. The air, odour and sound pollution will affect local inhabitants and cattle; it will be hardly possible for people to live and cultivate. The inhabitants´ health is also likely to deteriorate.
The damage caused by installing and industrial site so close to the Sundarbans will leave the South Western coast of Bangladesh vulnerable to storm, cyclone, and other natural disasters, when Bangladesh is already extremely vulnerable to climate change.
The project violates Human Rights
The Rampal power plant, officially covering 1834 acres of land, has already started building its infrastructure. The authorities in charge acquired the land necessary for the proposed coal plant before doing the Environment Impact Assessment (EIA) and getting the site clearance certificate from the Department of Environment (DoE). Displacement of local residents has taken place in highly irregular circumstances, without prior informed consent, leading to allegations of human rights violations. as reported by South Asians for Human Rights.
In September 2013, Bangladeshis from all walks of life have banded together to oppose the project, culminating in 20,000 joining a five-day, 400 kilometer “Long March” from the capital city Dhaka to Rampal to protest the plant. The documentary, Long Live Sundarban, covers the long march and depicts human rights violations that took place. A second long March took place this year, once again gathering hundreds to Save the Sundarbans, and this time including a solidarity group from India.
The project threatens to destroy the unique, extraordinary rich Sundarbans forest, a recognised UNESCO World Heritage site
The Sundarbans are a UNESCO World Heritage site and a recognized Ramsar wetland. The project would have a range of disastrous and irreversible impacts on the richly biodiverse forest. The importance and vulnerability of the Sundarbans is often contrasted with the mass destruction and the process of deception the Rampal power plant will continue to bring if built. Once the plant is in operation, it will burn 4.7 million tons of coal, emitting 7.9 million tons of carbon dioxide as well as 220 tons of different toxic gases daily. These gases will be spread out by wind and affect the people, trees, animals, soil and livestock.
Heavy metals resulting from coal burning will be kept in a coal ash pond, containing toxic sludge located close to the Passur river, a cyclone and flood prone area. Additionally the plant will discharge toxic water into the river for the next 25 years; navigational vessels traveling up and down the Passur river for coal transportation will also alter the ecosystem. Given the history of oil, fertilizer, and coal vessels sinking in the rivers of Sundarbans, there is room for concern. These will most certainly harm the fragile ecosystem of the Sundarbans. And thus the people, the tigers, the dolphins, the turtles, the fish, the mangrove and the innumerable crucial organisms that keep the Sundarbans alive.
The project threatens to wipe out the Bengal tiger and other iconic species
Sundarbans is home to the iconic Bengal tiger, the threatened estuarine crocodile, endangered Irrawaddy and Ganges dolphins, the Indian python, some 260 bird species and around 120 aquatic species. If the coal power plant is installed, the toxic discharged water and contaminated air will have a destructive effect on all life in the forest. It is not possible to protect high profile animals in Sundarbans without a true balance between various ecosystems. Tigers will not be there without the deer, and deer will not be there without keora trees.
The project is over-subsided and poses major financial risks to its backers
As well as being an environmental and social disaster in the making, the Rampal project is beset by financial risks for the companies backing it. The Institute for Energy Economics and Financial Analysis (IEEFA) describes many of these risks in their report “Risky and Over-Subsidised: A Financial Analysis of the Rampal Power Plant.” For example, the project is in the “Wind Risk Zone” and therefore vulnerable to storm surges; there is no clear management plan in case of accidents and emergencies; the plant faces major community opposition and increasing international pressure; and it is based on overly optimistic estimates of the Plant Load Factor, a measure of its efficiency, which are unlikely ever to be realized. These and other factors are likely to further delay construction and put the project's social license at risk. The planned project completion date has already shifted back from 2016 to 2017, 2018, and most recently 2019. All these financial risks bear particularly heavily on Exim Bank of India due to the size of the bank’s exposure to this project.Thus, as part of the growing movement to Save the Sundarbans, we urge Exim Bank India not to finance the Rampal Power Plant.
In addition, the true cost of the plant is hidden by subsidies worth well over US$3 billion from both Bangladeshi and Indian tax payers, including a 15-year income tax exemption for the plant, a tax exemption for transport of machinery and equipment for BHEL, maintenance dredging to be paid for by the Bangladeshi government, inadequate compensation to landowners, and subsidies through Exim Bank of India’s heavily discounted loan . The plant is also expected to increase electricity rates in Bangladesh, providing an additional hit to the population’s finances.