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Created before Nov 2016
Last update: 2017-11-22 15:57:00 BankTrack
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The Sundarbans, the largest mangrove forest in the world, is a living and effective natural fence protecting the coastal belt areas of Bangladesh, and a UNESCO World Heritage Site. It has saved the people of Bangladesh from the devastation of cyclones, and also offers various sources of livelihood to more than five hundred thousand local inhabitants.
But the Sundarbans is now at the risk of destruction because the Bangladeshi government is moving ahead with the development of a coal-based thermal power plant at Rampal with a capacity of 1,320 MW of electricity. The plant will be located only 14 km away from the Sundarbans Reserve Forest, and will cover 1,834 acres of land. The government has judged the project location as a ‘safe' distance from the mangrove forest.
This large thermal power plant will be installed by a joint venture comprising National Thermal Power Company (NTPC) of India and the Bangladesh Power Development Board (BPDB). The joint venture company, Bangladesh-India Friendship Power Company Ltd (BIFPCL), has appointed the Indian construction company Bharat Heavy Electricals Ltd (BHEL) and aims to reach financial closure by October 2016. NTPC will also operate and set up the plant while debt financing will come from Indian Export-Import Bank.
The joint venture agreement between NTPC and BPDB was signed on January 29, 2012.
The Indian company BHEL has been selected as the construction company and signed the 'Main Plant EPC' contract for the construction work in July 2016.
Indian Export-Import Bank is in the process of extending a Buyer's Credit of USD 1.6 billion to BIFCPL.
What must happen
Financiers should refuse to fund this development and rule out involvement in financing or support of any kind for the Rampal coal plant.
The proposed 1320 MW power plant project (consisting of two generating units of 660MW) will cause irreparable damage to the livelihoods of two million inhabitants dependent on the Sundarbans; most rely on agriculture, shrimp cultivation, and fishing but also wood, and palm collecting. All these livelihoods are at at risk 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, and oil and chemical wastes from coal-carrying vessels will also contaminate the water. The mangrove-supported habitat will also 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 decrease since fertility will reduce drastically as a result of coal related pollution from the very beginning of the plant's operation.The air, odour and sound pollution will affect local inhabitants and cattle so badly that it will be barely possible for people to live and cultivate. Inhabitants' health is also likely to deteriorate.
The power plant will reduce the livestock grazing area, and waste from coal such as fly ashes and bottom ashes will contaminate air and water. This will make livestock vulnerable to diseases and will also affect the income level of households and farms.
The damage caused by installing an industrial site so close to the Sundarbans will leave the south-western coast of Bangladesh vulnerable to storms, cyclones, and other natural disasters.
The importance and vulnerability of the Sundarbans is often contrasted with the extensive destruction which the Rampal power plant would bring about. According to Dr. Abdullah Harun Chowdhury and his team, the impacts of the Rampal 2x660 MW coal fired power plant are mostly negative and irreversible.
The research shows that climate, topography, land use pattern, air and water (both surface and ground) quality, wetlands, floral and faunal diversity, capture fisheries and tourism will be affected permanently due to the proposed coal fired power plant. Increase in water logging conditions, river erosion, noise pollution and health hazards; decrease of ground water table; loss of culture fisheries, social forestry and major destruction of agriculture will be the expected consequences of the Rampal coal-fired power plant.
Once the plant is in operation, it will burn 4.7 million tons of coal, emitting 7.9 million tons of carbon dioxide and other hazardous gases that will dispersed into the air. Reportedly, 220 tons of different toxic gases will be discharged daily from the plant unless they are treated appropriately before emission. These gases will be spread out by wind and affect communities, trees, animals, soil and livestock. Heavy metals resulting from coal burning will be kept in a 100 acre coal ash pond, containing toxic sludge located close to the Passur river, a cyclone and flood prone area.
The plant will require 9,150 cubic metres of water per hour from the Passur River for its operation. According to the official environmental impact assessment (EIA) report, 5,150 cubic metre of hot water will be discharged every hour, daily, for the next 25 years into the Passur river. The toxic discharged water will have a destructive effect on the fisheries, shrimp farms, and mangrove-supported habitat.
This project would require 13,000 tonnes of coal on a daily basis, navigational vessels will travel up and down the Passur river daily to deliver the required coal volumes. In December 2014, an oil tanker sank spiling over 350 tonnes of furnace oil into the Shela river: locals were compelled to clean up given the lack of capacity to tackle oil spills. Less than six months later, in May 2015 a vessel sank in the Bhola river spreading 500 tonnes of toxic fertilizer. Less than half a year later, in October 2015, another vessel carrying 510 tonnes of coal capsized in the Passur rivers. The latest incident took place on March 19 2016, when a cargo vessel carrying 1,235 tonnes of coal capsized in the Shela river at the Chandpai Range.
These most recent cases are a strong reminder of the accidents that could occur once coal is transported daily to reach the Rampal site. Equally, extensive dredging needs to take place along the Passur river to allow vessels to navigate. 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 coal plant would have consequences on its surroundings but also on the global climate. Not only would it burn a large amount of coal, it is likely to reduce the mangrove forest and coastal wetland, both of which may be able to store up to five times more carbon than tropical forests of the same size. Such extensive impacts on the Sundarbans would represent a huge loss for the world.
Rampal Power Plant that officially covers 1834 acres of land has put the livelihood of two million inhabitants under threat as the infrastructure has already been built. These local people were mostly dependent on agriculture and shrimp cultivation. The concerned authorities of the government of Bangladesh also displaced the local inhabitants in an improper and dubious manner. The land necessary for the proposed power plant project was acquired before the Department of Environment (DoE) granted a site clearance previous to an EIA.
The government displaced local people, in many cases, without previous and informed consent from communities. Similarly, it remains unclear how compensation to land owners were handled. The documentary, Long Live the Sundarbans, covers the long march and depicts human rights violations that took place in the Rampal area. South Asians for Human Rights (SAHR) conducted a fact finding mission focusing on the process of land acquisition while Transparency International Bangladesh reported instances of corruption and human rights violation.
In the rural society of Bangladesh, women are the main agents for ensuring long-term survival and bondage of a family. They are also the major bread earners of many families. As the livelihood or home of a family gets threatened, women become the first victims to suffer and struggle to keep their families go on.
Indian company NTPC's involvement in this power plant project in Bangladesh is more motivated by commercial interest than by the legal and ethical guidelines it is supposed to follow when implementing such projects in India. According to the guidelines of the Indian Environment and Forest Ministry, it is not permitted to set up any such plant within a 25 km vicinity of any protected forest.
In Bangladesh, the government persistently endorses the Rampal power plant as if there was no other option than the Rampal plant just beside the Sundarbans. No alternatives are put forward to mitigate the power crisis.
There is a great imbalance in the gains and losses the Rampal project brings. The Bangladeshi cost of environmental degradation and loss of livelihoods will not necesarily be made even by a country-wide economic gain. Eventually if we want to see who is going to benefit from the economic growth, it is only those who can afford to pay for electricity.
A BankTrack analysis in 2015 concluded that the Rampal coal plant is non-compliant with the Equator Principles.
Applicable norms and standards
EXIM Bank Extends a term loan of USD 1.60 Billion to the Bangladesh India Friendship Power Company Pvt. Ltd.. (BIFPCL)
Export-Import Bank of India [Exim Bank] has extended a term loan of USD 1.60 billion to the Bangladesh India Friendship Power Company Pvt. Ltd. [BIFPCL, a 50:50 joint venture between the Bangladesh Power Development Board, Bangladesh and NTPC Ltd., India] for financing the 1320 MW [2*660 MW] ultra-super-critical Maitree Super Thermal Power Project on Turnkey Basis at Rampal, District-Bagerhat, Bangladesh. The Facility Agreement to this effect was exchanged on April 10, 2017.
Bharat Heavy Electrical Ltd. signed EPC contract
The Indian company won the bid to construct the Rampal power plant back in January 2016, but did not accept the initial contract. BHEL´s demand for a tax exemption contract caused friction among Bangladeshi institutions and lasted close to half a year. On July 13th, BIFCPL and BHEL signed the engirneering, procurement and construction (EPC) contract. Activists in Bangladesh responded questioning who´s interest are really being served, they held mobilisations and called for a referendum on the construction of the plant. The issue was picked up internationally.
Report on financial risks of Rampal project
On the 17 of June, the Institute for Energy Economics and Financial Analysis (IEEFA) launched a report outlining the numerous financial risks the Rampal project will bring to all stakeholders involved, on end consumers, but also placing a burden on both Indian and Bangladeshi taxpayers. The report was widely covered, and raised the numerous thrats the Rampal plant brings. The head of Exim Bank of India admitted that ¨we might take a reputation risk¨.
Global call on Exim Bank of India to stop finance plans for Rampal
A global coalition including BankTrack, Greenpeace International, 350.org, Rainforest Action Network, and Indian and Bangladeshi civil society groups today issued an urgent appeal to the Export-Import Bank of India to abandon its plans to finance the construction of the Rampal coal power plant in Bangladesh and save the world-renowned Sundarbans wetlands from destruction.
BHEL started work before signing EPC contract
The EPC (Engineering, Procurement and Construction) contract is likely to be signed in the month of April, formally making Indian BHEL the building company. Meanwhile the cabinet committee on economic affairs approved the development of tow jetties at Mongla Port through and land development for building the Rampal by utilising sand/ earth being extracted through the dredging of Mongla-Gashiakhali channel. It must be noted that BHEL, EPC contractor, has already started their work before signing the contract.
Unesco report may not be accurate
The Unesco team toured Bangladesh, including the Sundarbans, from March 22nd to 28th. Their tour was scheduled by the government. In those days the three members of the mission did not meet any of the groups opposing the Rampal power plant and the industrialisation of the Sundarbans. Expectations are that the report will be one-sided.
Fourth vessel sinks spreading additional toxic pollutants in Sundarbans rivers
The Sea Horse, a large bulk cargo vessel carrying 1,245 metric tons of coal, sank in the Shela River inside the Sundarbans. This marks the four incident in two years. An oil tanker carrying 350,000 litres of furnace oil sunk in that same river in December 2014. Poor response from government saw villagers cleaning the mess. Two other vessels spread coal and toxic fertilizer in other parts of the forest. This marks how ill-prepared the authorities are, the Sea horse vessel remains at the bottom of the Shela river for more than 40 days until salvage operation starts.
Thousands take part in Long March to Save Sundarbans
From 10th to 13th of March: Thousands join in to march from Dhaka to Khulna in a long march to Save the Sundarbans. A large number of civil society groups, students, unions, an Indian solidarity group and people from all paths of life voiced that there is no alternative to the Sundarbans.
This sign of protest against industrializaiton of the largest mangrove forest was captured by numerous local and international media outlets (see News section).
Exim bank to finance Rampal
Indian Export-Import Bank is in the process of extending a Buyer's Credit of USD 1.60 billion to BIFCPL for financing the 1320 MW Maitree Super Thermal Power Project in Bangladesh.
Demand for a UN-led committee to conduct EIA
The National Committee to Protect Sundarbans demanded suspension of all development activities of Rampal power plant and the adjacent private Orion power plant until a fresh environment impact assessment (EIA) by a United Nations-led neutral team.
Indian BHEL to operate Rampal
Out of the three bidders, BHEL was formally announced as the operating company. This means it will have to arrange finance with Indian Exim Bank, the national ECA.
Coal vessel capsizes in Passur river
A vessel carrying 510 tons of coal capsized in the Passur river, by the Sundarbans. Forest officer said the coal might harm the ecosystem of the Sundarbans
Bangladeshi protest intensifies against Rampal coal plant
A number of leaders and activists face violence during the ‘Dhaka-Sunderbans road march’ rally on 16th and 17th Otober. Participants signalled that protest will intensify if the government does not stop the planned coal power plant.
Three bidders for Rampal
The current bidders for the Rampal project are three:
- Consortium of Marubeni Corporation of Japan and Lersen & Toubro Ltd of India
- Consortium of Harbin Electric International Company Ltd of China, ALSTOM of France and Jiangsu Etern Company Ltd of China
- Bharat Heavy Electricals Ltd (BHEL), India.
French banks say no to Rampal
Crédit Agricole, Société Générale and BNP Paribas have said no to the Rampal coal power plant project in Bangladesh, reveals the Guardian in an article.
Narendra Modi endorses Rampal coal plant
During his visit to Bangladesh, Indian prime minister Narendra Modi endorsed the Rampal plans, assuring support and cooperation. Modi and Sheikh Hasina gave the green light on behalf of India and Bangladesh.
Sunken vessel spreads fertilizer through Sundarbans´rivers
The cargo vessel - 'Jabalenoor' - was carrying about 200 tonnes of potash fertiliser, giving the rivers a red hue as it dissolves through the mangrove forest.
Only six months after an tanker pilled oil in these riveers, the incident sheds lignt on the urgent necessity for putting a complete ban on plying of cargo vessels through the endangered forest.
Norwegian Pension Fund will not fund Rampal
After thorough study of the Rampal project the Norwegian Government Pension Fund Global reached the conclusion that the environmental damages are unacceptable.
As a result of its coal divestment measure, the fund dropped NTPC among other Indian companies from its portfolio.
Oil Spill in the Sundarbans
On 9th of December an oil tanker partly sank spilling oil over 60 km in the Sundarbans. The accident occurred inside one of three sanctuaries set up for endangered Irrawadi an Ganges dolphins. This spill will gravely affect a delicate and unique ecoystem. Bangldesh officials called it an "ecological catastrophe", the Wildlife Conservation Society representative thinks it more as a "national disaster".
Meanwhile the efforts to build the Rampal coal power plant go on, with plans to use these same rivers to carry coal upstream to the plant.
UNESCO published a State of Conservation report on Sundarbans and expressed its concern on the Rampal coal power plant project.
The Long March to Save the Sundarbans
The National Committee to Protect Oil, Gas and Mineral Resources, Power and Ports organized a five-day, 400-kilometer march from Dhaka to Rampal. Join by many groups and thousands of people. All walking for the safeguard of the Sundarbans. Making it clear that this means the Rampal coal plant cannot be constructed, and other activities destroying the mangrove forest.
The two companies BPDB and NTPC have equal share of ownership over the BIFPCL commercial joint venture. Bangladesh and India will equally provide 30 percent equity of this project. The remaining debt of 70% will be taken by Indian Export-Import Bank with the help from the operating company, NTPC.
Exim Bank India is in the process of extending a Buyer's Credit of USD 1.60 billion to BIFCPL for financing the 1320 MW Maitree Super Thermal Power Project in Bangladesh.
The Bangladeshi government issued a sovereign guarantee amounting to 70% of the project cost. In order to assure returned investment to overseas lending groups. Additionally, the joint venture company will enjoy a 15-year tax holiday.
The World Bank and Asian Development Bank declined to finance the project, so BIFPCL has decided to take Export Credit Agency (ECA) loans which involve high interest rates.
Previously, three French banks said they would not invest in the plant, after it was found that the proposed project failed to meet minimum environmental and social standards.