Aminbazar waste-to-energy A costly mistake in the making
Bangladesh does not have the luxury of wasting money on electricity it cannot afford, nor does Dhaka have the luxury of treating waste management as an excuse for an expensive power project.
Yet the proposed 42MW waste-to-energy plant at Aminbazar appears to do precisely that.
The government plans to buy electricity from the Chinese company China Machinery Engineering Corporation (CMEC) at around Tk 25 a unit.
State Minister for Local Government, Rural Development and Cooperatives Mir Shahe Alamon Thursday said the project is expected to start generation within 18 months.
The proposal may sound attractive: turn Dhaka’s mounting garbage into electricity.
But beneath that appealing slogan lies a far more troubling proposition – Bangladesh could be committing itself to one of the costliest forms of power generation while assuming substantial financial, contractual and environmental risks.
This is not an argument against modern waste management. It is an argument against bad economics masquerading as development.
CMEC proposed the project in May 2020, and the then fascist Hasina government approved it later that year without competitive tendering under the Special Provisions Act for Quick Enhancement of Electricity and Energy Supply, commonly known as the Indemnity Act.
A tripartite waste supply and power purchase agreement was subsequently signed in December 2021 between the Power Division, Dhaka North City Corporation (DNCC) and CMEC.
Most troublingly, the Bangladesh Power Development Board (BPDB) opposed the project from the outset.
If the country’s principal electricity authority had serious reservations, those objections should not have been brushed aside without a compelling public-interest justification.
The financial case is particularly difficult to defend. The plant is estimated to cost $467 million, or about Tk 5,745 crore.
According to a joint study by environmental organisations, the same investment could finance roughly 425MW of ground-mounted solar capacity, producing an estimated 688 million units of electricity annually.
Alternatively, it could support up to 950MW of rooftop solar capacity. That is an extraordinary opportunity cost for a country under severe fiscal and foreign-exchange pressure.
Then comes the electricity tariff. At an 85 per cent plant load factor, the government would reportedly pay about 21.78 US cents, or Tk 26.79, per unit.
The study puts this at roughly two and a half times the cost of solar power and about twice that of coal-fired electricity.
And the lower the plant’s utilisation, the worse the economics become. At a 40 per cent load factor, the effective cost could rise to Tk 47 per unit. At only 20 per cent utilisation, it could reach at least Tk 75.
This is not cheap electricity. It is expensive electricity backed by a long-term public obligation.
The annual capacity charge of $58.87 million – around Tk 724 crore – makes the arrangement even more problematic.
Such a charge is payable irrespective of how much electricity the plant actually produces.
Bangladesh could therefore end up paying heavily even when the plant is operating below economically sensible levels.
The waste-supply arrangement raises another red flag. DNCC is expected to supply 3,000 tonnes of municipal waste every day, although it currently generates around 2,750 tonnes.
Failure to provide the contracted amount could attract a penalty of $50 per tonne.
What kind of waste policy creates a financial incentive to keep feeding an incinerator?
A sensible waste-management policy should reduce waste, encourage segregation, promote recycling and recover materials.
This contract risks turning waste generation itself into an economic requirement.
The environmental argument is no less troubling. The joint study estimates that the plant could generate tens of thousands of tonnes of bottom ash, fly ash and fine particulate matter, as well as toxic gases containing heavy metals, dioxins and furans.
At full operation, annual carbon dioxide emissions are estimated at more than 411,000 tonnes.
The phrase ‘waste-to-energy’ should not be allowed to disguise the fact that burning waste is still combustion.
It is not automatically clean merely because electricity is produced at the end of the process.
Dhaka unquestionably needs a modern and integrated waste-management system.
But that does not mean the city needs to burn its way out of the waste crisis. The priority should be segregation at source, recycling, reuse and composting.
Organic waste can be channelled towards biogas production, while recyclable materials can be recovered rather than destroyed.
Such an approach could generate economic value instead of simply generating electricity at an exceptionally high price.
The government should therefore stop treating the Aminbazar project as an inevitable symbol of progress. It is neither inevitable nor necessarily progressive.
Before another taka is committed, the entire project should undergo a transparent and independent review covering its tariff, capacity charge, waste-supply obligation, environmental impact, land acquisition and procurement process.
The government should publish the relevant agreements and allow independent experts to scrutinise the assumptions behind the project.
If the project survives that test, let it proceed.If it does not, the government should have the courage to walk away.
Bangladesh has already paid a heavy price for poorly conceived power-sector commitments. It should not repeat the mistake in the name of solving Dhaka’s waste crisis.
Waste is a problem. Electricity is a need. But turning one into an excuse for buying the other at an exorbitant price is not development – it is an expensive policy failure waiting to happen.
