Calls grow to scrap Orion’s 635 MW coal plant

Staff Reporter  :

A coalition of prominent individuals and civil society organisations has called for the cancellation of the proposed 635 MW coal-fired power project in Matarbari, Cox’s Bazar, citing legal, financial, environmental, and public health concerns.

The demand was raised at a press conference held on Tuesday at the Dhaka Reporters Unity.

The event was jointly organised by the Bangladesh Working Group on Ecology and Development (BWGED) and the Coastal Livelihood and Environmental Action Network (CLEAN), with support from several co-organisers, including the Bangladesh Environmental Lawyers Association (BELA), Forum for Environment and Development (FED), Maheshkhali Janosurakkha Mancha, and Sansaptak.

Speaking at the event, Hasan Mehedi, Member Secretary of BWGED, criticised the project for being approved under the controversial Quick Enhancement of Electricity and Energy Supply (Special Provision) Act.

“This contract, signed under a disputed legal framework and based on outdated technology, is entirely illegal. It will impose an annual burden of Tk 3,059 crore in capacity charges on the public,” he stated.

The original approval for the coal project was granted to Orion Group on 29 September 2013 to construct the plant in Gazaria, Munshiganj. A Power Purchase Agreement (PPA) was later signed on 21 April 2016 between the Bangladesh Power Development Board (BPDB) and Orion Power Unit-2 Dhaka Limited.

Per the agreement, commercial electricity production was scheduled to begin within 45 months – by January 2020. However, the company failed to initiate construction. In response, the BPDB proposed relocating the project to Matarbari in February 2022 and extended the project’s deadline to December 2026.

Following repeated deadline extensions, the most recent in July 2024, the project’s completion date has now been pushed to December 2030. Mehedi pointed out that had this extension not been granted, the contract would have become void under its own terms.

“On 12 September 2024, BWGED, along with civil society representatives, called for the contract’s cancellation in a press conference directed at the Chief Adviser, the Energy Adviser, and the Environment Adviser,” he added.

Despite mounting opposition, three state-owned banks have committed a combined loan of Tk 10,579 crore to the project. Economist Ahsan H.

Mansur of the Policy Research Institute has opposed this financing, urging instead that such funds be redirected toward renewable energy development. He noted that while a loan for a solar energy project was cancelled in 2024, the coal project loan remains in effect.

Mehedi also warned that, even with the new timeline, it is unlikely the project can be completed before 2026. “Delays in this coal project undermine Bangladesh’s target of achieving 100% renewable energy by 2050,” he said.

He further argued that the relocation to Matarbari had altered key cost variables-such as land lease and fuel transport-rendering the original 2016 agreement financially outdated. These changes, he asserted, provide sufficient grounds to terminate the contract.

On 4 May, a public petition containing thousands of signatures was submitted to the interim government’s Chief Adviser, Dr Muhammad Yunus, urging the cancellation of the project.

In total, BWGED and 144 civil society organisations have filed four separate petitions to advisers of the Finance, Environment-Forests-Climate Change, and Energy-Mineral Resources Ministries, as well as to officials at the Coal Power Generation Company Bangladesh Limited (CPGCBL), demanding the project’s immediate termination.

Local resistance to the project has also intensified. On 1 March, residents of Matarbari held a human chain protest against the plant. Despite this, the Environmental Impact Assessment (EIA) for the project was approved at the end of 2023.

The proposed Matarbari project has thus emerged as a flashpoint in the broader debate over Bangladesh’s energy strategy, with environmentalists and economists increasingly favouring a shift to renewables over coal.