China becomes Bangladesh’s largest energy partner

As Chinese President Xi Jinping arrived in Dhaka last week, he announced a slew of agreements, among them investments in two coal fired power plants in Bangladesh. These are the 1,320 MW thermal power plant in Payra located in the southern district of Patuakhali, and the 1,320 MW thermal power plant in Banshkhali located in the port city of Chittagong.

Unnoticed by others, this marked the first time that Chinese-Bangladeshi energy cooperation exceeded that between India and Bangladesh. In 2009 Bangladesh had planned to establish two 1,320 MW capacity coal fired power plants at Rampal near the protected Sundarbans with the assistance of India. But late this year Bangladesh has slowly retreated from the idea of building the second plant after mass protests by local citizens.

See: Chinese backed electricity plant endangers Hilsa sanctuary

See: Four killed as Bangladesh villagers oppose coal-fired power plant

See: Bangladesh struggles to fund controversial Sundarbans coal project

Not everyone in Bangladesh is celebrating the new agreements. While China has started to phase out coal fired power plants within the country, many of the ones it is funding overseas are still based on this dirty technology.

See: China stokes global coal

Interestingly enough, among the other agreements there is a clause for building cooperation on tackling climate change and renewable energy sectors. Ainun Nishat, professor emeritus at BRAC University, believes that instead of the low technology coal plants, Bangladesh would be better off if it chose to introduce renewable energy – especially solar and wind energy in which China is the market leader – in a significant way.

This remains a minority position, though, as Bangladesh hopes to increase installed capacity to 20,000 MW by 2021. This would be the equivalent of adding on half as much electricity as it currently produces, 12,780 MW, within five years.

‘We are drinking the same water’

Environmental issues, though, were addressed directly by the Chinese President. In his speech in Dhaka he said, “We are drinking the same water, as the mighty river Brahmaputra flows from China-India to Bangladesh.” A number of people have seen this as a signal towards basin-wide cooperation on transboundary rivers.

Shahb Enam Khan, a professor at Jahangirnagar University, thought it was a possibility, but Ainun Nishat, who has also served as a member of the Joint Rivers Commission of Bangladesh and India, said that without Indian cooperation this comment had little meaning. He added, “India is never interested to talk multilaterally on the issue.”

Moreover the recent news that China had completed a dam upstream on the Xiabuqu, a tributary of the Brahmaputra (called Yarlung Zangbo in Chinese) seemed to contradict the Chinese position. The Chinese authorities have not released much information, and have only said that they are building run of the river projects for energy production.

See: Chinese dam hurts Tibet more than India

Ataur Rahman, a water resource expert at Bangladesh University of Engineering and Technology (BUET), said, “It is unclear why the Chinese Premier said this about Brahmaputra. But if he really means to take cooperative action on Brahmaputra water, that will be good for all.”

One belt, one road

These investments and the way that China handles transboundary cooperation will have an enormous impact on China’s new Silk Road plans.

Read: China needs to pave ‘One Belt One Road’ with green finance, say experts

On October 15 China Central Television (CCTV) quoted the Chinese President, saying, “Both China and Bangladesh have agreed to launch a feasibility study on a China-Bangladesh Free Trade Zone to strengthen trade and investment cooperation and strengthen practical cooperation in key areas such as production capacity, energy and power, transportation, communication and agriculture.”

Bangladesh is in a strategic location in China’s revived Silk Road plan, which aims to connect countries and markets in Asia, Europe and Africa, it also said.

The Prime Minister of Bangladesh, Sheikh Hasina, seems to agree. “Bangladesh is willing to actively work with China within the framework of the Belt and Road initiative and support the building of an economic corridor linking Bangladesh, China, India and Myanmar,” said Hasina, according to Xinhua, the Chinese official news agency.

South Asia has not been that important to China in the past. After 2013, when China put forward the Belt and Road Initiative, it has started acquiring greater salience, Jiang Jingkui, director of the Centre of South Asian Studies at Peking University, was quoted as saying in the Daily Star. Xi Jinping is the first Chinse President to visit Bangladesh since Li Xiannian visited in 1986. Both China and Bangladesh will hope to see this as an inflexion point in their relationship, but whether it will be just transactional or more inclusive, environmentally conscious and multilateral is still not clear.