Asian Development Bank urged to halt fossil fuel finance in Bangladesh

Rights groups and environmental activists in Bangladesh have urged the Asian Development Bank (ADB) during the week of its annual meeting in Milan to refrain from funding of fossil fuel projects and from supporting them in Bangladesh.

The ADB has so far invested around US$$17 billion in fossil-fuel based projects, they said, adding that many such ADB-funded projects have turned into a burden for the government as proper feasibility studies were not carried out.

The NGO Forum on ADB, a network of civil society organisations, along with the Coastal Livelihood and Environmental Action Network (CLEAN) and its allies, held a press conference recently in Dhaka at which they demanded the ADB support a just transition.

They urged the ADB to reject carbon markets, greenwashing, and carbon capture disguised as climate action.

“ADB must either lead a just, fossil-free energy transition or be held accountable for fuelling climate breakdown,” they said, adding that the era of fossil finance must end. Civil society will be watching closely and calling on international media, the public, and financial watchdogs to expose ADB’s climate contradictions, they warned.

They gathered under the banner “Unpacking the risks in ADB Investments in Bangladesh’s Energy Sector”, in the press meeting, highlighting the ADB’s dependence on fossil fuel investments in the name of development.

Of the 106 projects worth US$17.34 billion, over 65%, or US$11.36 billion, lack any safeguarding classification, undermining transparency and accountability, they argued.

Around 7.95% of funds are allocated to high-risk environmental projects, and a mere 0.35%, or US$60.58 million, address resettlement or indigenous concerns, said Sarmin Bristy, a fossil fuel campaigner at the NGO Forum on ADB.

“This raises serious doubts about ADB’s commitment to sustainable development,” Bristy said.

“In electricity generation, ADB financed $4.88 billion for 2884.8 MW, of which 82.9% supports fossil fuel plants. Only 2.55% is directed to solar energy, with no investment in wind power. Fossil fuel projects receive the highest per-MW investment at $2.04 million, while solar lags behind at $0.51 million. Moreover, 67 project closures, involving $9.84 billion, signal poor planning and inefficiency,” said Rayyan Hassan, Executive Director of the NGO Forum on ADB.

“ADB must undergo an urgent policy overhaul to embed a proactive coal 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, and decisively shift away from fossil fuel dependency to uphold environmental integrity and meet global climate goals,” he said.

Hasan Mehedi, Chief Executive of CLEAN, said: “In another daydream, ADB believed that the fossil gas will come someday. So, it further invested US$ 104.11 million for upgrading Khulna 150 MW Gas Turbine Power Plant to a 225 MW Combined Cycle Power Plant. Bangladesh government had to pay Tk 18.24 billion in the last 11 years for this power plant.”

Bangladesh is on the “frontlines of the climate crisis, yet ADB continues to bankroll fossil fuel projects that deepen our vulnerability and rob us of a liveable future. There is no ‘transition’ in gas, no justice in displacement, and no sustainability in debt-driven destruction,” stressed Mehedi.

(Writing by M Azizur Rahman; editing by Sophie Davies)