The Asian Development Bank (ADB) faces intense criticism from civil society organisations over its substantial investment in Bangladesh’s energy sector, primarily in fossil fuel-based projects.
Investment in Bangladesh’s Energy Sector
- Investment: $17.34 billion
- Proportion of fossil fuel-based projects: 67%
- Renewable energy investments: 2.55%
- Cost per megawatt (fossil fuel projects): $2.04 million
- Cost per megawatt (solar energy): $0.51 million
- The ADB has supported 106 energy projects in Bangladesh since 1973.
- The majority of this funding has been directed toward fossil fuel-based power generation, oil and gas distribution, and related transmission infrastructure.
- Sixty-seven of these projects have already been closed, raising concerns about the bank’s project planning, sustainability, and long-term strategy.
The Lack of Transparency and Accountability
“ADB’s investment in Bangladesh’s energy sector is a recipe for disaster,” said Sharmin Bristy, fossil fuel campaigner at NGO Forum on ADB. “The lack of transparency and accountability in the bank’s project planning and execution is alarming.”
- 65% of ADB’s energy investments in the country lack any safeguard classification, underscoring serious transparency and accountability issues.
- Only 7.95% of project funds are allocated to high-risk environmental considerations, and a mere 0.35% ($60.58 million) has been earmarked for resettlement and community safeguards.
The Urgent Need for a Policy Overhaul
Rayyan Hassan, executive director of the NGO Forum on ADB, urges ADB to undergo an urgent policy overhaul to:
- embed a proactive fossil fuel phase-out strategy
- champion a just and equitable energy transition
- align financing with the Paris Agreement to prevent carbon lock-in
- prioritise regionally viable clean energy solutions
- decisively shift away from fossil fuel dependency to uphold environmental integrity and meet global climate goals
- End all fossil fuel financing and support a just energy transition
- Implement robust safeguards, including FPIC and human rights respect
- Reject carbon markets, greenwashing practices, and corporate-led pseudo climate solutions
Environmental Impact and Vulnerability
| Project | Funding | Description |
| 165-kilometre-long gas pipeline project from Bheramara to Khulna | $1.16 billion | Invested in, despite Bangladesh lacking sufficient gas supply |
| Two gas-based power plants in Khulna (225 MW and 800 MW) | $1.13 billion | Remain idle due to insufficient gas supply |
Civil Society Demands
The ADB’s Response
The ADB has not yet responded to the civil society organisations’ demands, but the bank has acknowledged the need for a more sustainable energy strategy.
The Climate Crisis and Bangladesh’s Vulnerability
Bangladesh is on the frontlines of the climate crisis, and the ADB’s continued funding of fossil fuel projects only exacerbates this vulnerability. The country faces numerous challenges, including frequent natural disasters, rising sea levels, and shifting weather patterns.
A Call to Action
The civil society organisations urge the ADB to reconsider its energy policy and adopt a more sustainable approach. The future of Bangladesh’s energy sector and the country’s ability to meet global climate goals depend on it. The ADB must take immediate action to address these concerns and ensure that its investments in Bangladesh’s energy sector are aligned with the principles of sustainable development.
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