Let the money talk: Where Rampal truly stands

 “The 1320MW Rampal power project is making progress in accordance with your laws and regulations. We can do more together in the power sector, here and in India.”

— Indian Prime Minister Narendra Modi, during his visit to Bangladesh on June 6

As of June 25, three French banks have expressed their strong denial to fund the ethically, environmentally, and politically controversial power plant project — the joint venture between Bangladesh and neighbouring country India — the Rampal Power Plant.

And they are not the first ones to pull out from this project either. The pull out of the much-coveted Norwegian Pension Fund six months earlier had made the news and flooded the headlines, giving the guys with big pockets a shake in their iron chairs and water on their eyelids — a much needed step waiting to happen for a long time.

The $1.5bn coal-powered plant project is planned to produce 20,000 megawatts of cheap coal-powered electricity for the citizens by the year 2021. But interestingly enough, though Bangladesh has to bear the entire risk and repercussions of building a potentially dangerous project in the most feeble eco-system in the country, and even risk losing the prestigious status of being a UNESCO World Heritage Site (official assessment to be completed by the end of June as per reports), in addition to risking the extinction of one of its most prized possessions, the Royal Bengal Tiger, India is siphoning away almost 50% of the power produced in the plant, conveniently citing their 1972 Wildlife Protection Act as the main factor deterring it from allowing the plant being built within its own premises.

India has two sticks to dangle here: The Wildlife Protection Act, 1972 of India, which states that no ecologically-sensitive areas like national parks, wildlife sanctuaries, or reserve forests can be contained within 15km of a thermal power plant, and the rule stated by the Union Ministry of Environment and Forests prohibiting the construction of thermal power plants within a 25km radius of any “ecologically sensitive area,” including forests.

In contrast, Bangladesh has no rule of law as such. The proposed Rampal Power Plant is only 14km away from the Sundarbans’ core area border. And the transportation of 3.2 million tonnes of coal a year through the Passur River, the main water body that seeps deepest into the forest, in addition to the industries that will mushroom surrounding the peripheries of the plant, can only bring bad news.

And this is not even the only project to be struck with the giant either. The Rampal Power Plant is just one of the three major deals signed under the Bangladesh-India Friendship Power Company, formed in 2013, as a joint venture between Bangladesh Power Development Board and the National Thermal Power Corporation in India.

The primary funding of the (estimated) $1.5bn project was planned to be provided by commercial loans, 70% of the total fund expected being granted by financial banking institutions and the remaining 30% being split between India and Bangladesh equally.

According to the public reports and insider news in the last few months, several private multinational banks, even the ones with very explicit records of funding environmentally degrading projects in Bangladesh (eg coal power plants, tanneries, etc), have withdrawn their support from the project on grounds of fabricated reports submitted by the authorities to convince the funders.

The analysis of Bank Track, a global coalition of non-profit tracking and co-operating in the field of banks and financial institutions and measuring their investments and actions based on sustainability, reports: “The analysis shows that serious deficiencies in project design, planning, and implementation and due diligence obligations render the project non-compliant with the minimum social and environmental standards established by the Equator Principles, as well as the International Finance Corporation’s performance standards.”

The repercussions are already beginning to shine through — not only with the welcome outsiders, but with the home-grown veteran supporters as well. The Bangladesh Planning Commission, the central body of the Bangladesh government for formulating policies and frame-works in line with the government’s development goals and objectives, has already refused approval for the project. Reason: The project was not compliant with the country’s existing policy, nor was the funding and ownership of the plant clear.

This clearly leaves even the 15% stake of Bangladesh in the project uncertain. The dismissals can only work to fuel apprehension from any funder to back the project.

Even before funds can be raised to build the first plant, the BPDB has inexplicably started acquiring land for a second plant.

With the possibility of a “legally binding deal” hanging in the air ahead of the Paris Climate Summit this year, disapprovals and cold shoulders from the international institutions can only tarnish the face of the victim that had served as our last saving grace in this battle.