AIIB considering support for LNG power plant

The Asian Infrastructure Investment Bank (AIIB) is fast-tracking support for a gas-fired power plant in Bangladesh after determining that the project complies with the Paris Agreement.

The Beijing-based development bank is considering support for a 584MW plant on the outskirts of Dhaka near Narayanganj, reports Climate Home News.

According to a report from the Bangladesh Power Development Board, LNG will be used to power the plant.

Bangladesh is now increasingly depending on LNG to meet its energy needs as native gas resources are being depleted. Attempts are being made to move away from coal and phase out polluting diesel plants, and there is a dearth of renewable energy potential.

But as a result of Russia's invasion of Ukraine, prices have skyrocketed to the point where the country frequently experiences power interruptions.

"There's no gas to supply this new power plant. It's not justified and ridiculous," Hasan Mehedi, secretary of the Bangladesh Working Group on External Debt, a coalition of 43 local organisations, told Climate Home News.

The lead lender on the $613 million project is Standard Chartered Bank. The loan amount offered by AIIB is $110 million.

According to project documents, project developer Unique Meghnaghat bought 21 acres of agricultural land from nearby communities to construct the plant, which had an impact on 343 landowners and fishers.

The project, according to AIIB, is in line with the objectives of the Paris Agreement. However, it has not released its methodology.

By July 2023, the bank has promised to have all of its activities in line with the Paris Agreement.

In 2018, the Beijing-based Asian Infrastructure Investment Bank (AIIB) approved a $60 million loan to develop a 220-megawatt combined cycle power plant in Bhola at a total cost of $271 million.

Later, in 2020, it approved a $200 million loan to Bangladesh to increase access to electricity and improve service efficiency in Dhaka and the country's western zone.