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Moheshkhali 1320 MW (BPDB-CHDHK) Coal Power Plant

Current Status: Canceled


Moheshkhali 1320 MW (BPDB-CHDHK) Coal Power Plant also known as Chittagong Coal-2, Moheshkhali power station. The power plant is located in the proposed Maheshkhali Power Complex in  Maheshkhali Islands of  Maheshkhali Upazila in Cox's Bazar District of Bangladesh probable location (Location: 21.6341, 91.8984). It is sponsored by the Bangladesh Power Development Board (BPDB) and China Huadian Hong Kong Company Ltd (CHDHK) as an Independent Power Producer (IPP) for an undisclosed project period. It was an ultra-supercritical coal power plant. The Memorandum of Understanding (MOU) was signed in August 2017 between BPDB and CHDHK. The power plant was supposed to start commercial operation in 2027.  In October 2021 the Government of Bangladesh (GOB) declared the cancellation of 6 coal-fired power plants which were planned to be developed on the Maheshkhali Islands. Moheshkhali 1320 MW (BPDB-CHDHK) Coal Power Plant is one of them.


Capacity

The Maheshkhali coal-fired power plant was designed with an Installed (gross) capacity of 2 X 600 megawatts (MW). 


Context

Maheshkhali Power Station was part of a large multi-plant complex being organized by the Bangladesh Power Development Board (BPDB). In August 2013, the Bangladesh Power Development Board (BPDB) announced that it intended to develop a multi-plant power complex at Cox's Bazar, including both coal-fired plants and combined cycle gas-fired plants. The government had planned to construct an additional coal-based power plant with a 1,320MW capacity. The Bangladesh Power Development Board (PDB), a state-owned entity, had entered into a memorandum of understanding (MoU) with  China Huadian Hong Kong Company Ltd (CHDHK) to establish the ultra-critical project by importing coal. According to the agreement, the BPDB and CHDHK were set to establish a joint venture company for the power plant, with both parties committing to financing 50% of the project. 


This new plant formed part of the government's strategy to establish a series of power plants in Maheshkhali and 5,000 acres of land had been acquired for this purpose. The Power Division had devised a roadmap to generate approximately 20,000MW of electricity from coal-based power plants by 2030. The plan targeted the production of 11,250MW of electricity using domestically sourced coal, with the remainder derived from imported coal. A similar deal had been made by the PDB two years prior, on September 22, 2014, with the Malaysian consortium of Tenaga Nasional Berhad (TNB) and Powertek Energy Sdn Bhd (PB), involving the signing of two MoUs for a 1,320MW coal-based power plant in Maheshkhali, although no progress had been made on that project. In addition to this project, the state-run Coal Power Generation Company Bangladesh Ltd had also intended to establish a 1,200MW coal-based power plant in Cox’s Bazar's Matarbari area (DT, 2016). 


Land Acquisition

The initial location of the project remained uncertain. This uncertainty was addressed in February 2014. The location is  located in the Chittagong district, approximately 30 kilometers north of Maheshkhali Island. Total of 5,000 acres of land had been acquired for Maheshkhali Power Complex.


Fuel

The chosen fuel sources for these ambitious projects were specified as imported coal and liquefied natural gas (LNG) (GEMW, 2023). 


Financiers

In a report from Dhaka's Daily Sun in May 2014, it was stated that the Asian Development Bank (ADB) provided assurance to the Bangladesh government regarding the financing of at least one coal plant in Maheshkhali. The specific funding amount was contingent on the results of a feasibility study for the project (GEMW, 2023). Besides, Chinese banks were mentioned as potential sources of loans to support the project. It suggests that funding for the coal plant could come from financial institutions based in China. Additionally, the involvement of international partners, such as Malaysia's Tenaga Nasional Berhad and Powertek Energy, in the discussions about a joint venture in 2016 hints at the possibility of diverse sources of financing for the project  (DT, 2016). 


Sponsor

The development of the 1,320-megawatt coal-fired power plant in Maheshkhali, Cox's Bazar, is sponsored by a joint venture agreement between the Bangladesh Power Development Board (BPDB) and China Huadian Hong Kong Company Ltd (CHDHK). This significant undertaking involves a potential cost of $2 billion, as indicated by the financial estimate associated with the project (TDS, 2018). In this joint venture, both BPDB and CHDHK committed to financing 50% of the project, emphasizing a substantial financial investment from both parties. Furthermore, the initial project planning and agreements hint at the involvement of Chinese banks, though specific details on the financial institutions and their contributions were not fully disclosed (DT, 2016). In February 2016, plans for a collaborative effort involving BPDB, China Huadian, TNB, Powertek Energy, and Malaysia emerged to build a 2 x 660 MW coal plant in Maheshkhali, set to operate by 2019. However, by May 2018, BPDB and China Huadian pivoted, signing an agreement to establish a 1,320 MW coal plant on Moheshkhali Island (GEMW, 2023). 


Environment

According to Section 12 of the Bangladesh Environment Protection Act 1995, Environmental Impact Assessment (EIA) is obligatory for any industry (MOLJPA, 1995). The polluting industries, such as power plants, have to go through an Initial Environmental Examination (IEE) and EIA as directed in the Environmental Conservation Rules 2017 (MOEFCC, 1997). Supercritical coal plants emit significant amounts of carbon dioxide (CO2), a major greenhouse gas. According to the International Energy Agency (IEA), coal-fired power plants are the largest single source of global CO2 emissions from human activities, accounting for around 30% of total emissions (IEA 2024). Coal combustion produces ash containing toxic substances, which can contaminate water sources if improperly disposed of. Moreover, the discharge of wastewater from coal power plants contains pollutants such as heavy metals and toxic chemicals, posing risks to aquatic ecosystems and human health.  According to the environmental conservation rule 2023 the project falls in the “Red category” indicating it as a potential harmful project for the environment (MOEFCC 2023).


References

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