Bangladesh project puts Exim Bank's global credibility at risk

(Business Standard, New Delhi, 17 June 2016) A US-based think tank today said the Bangladesh-India Maitree project could effectively end up in a financial mess. The coal-based power plant proposed to be built near the city of Khulna, close to the Sundarbans mangrove forest, is a joint venture between India and Bangladesh’s state-owned entities. The Institute for Energy Economics and Financial Analysis (IEEFA) said electricity produced from the project would cost 32 per cent more than the average electricity in Bangladesh, assuming an average plant load factor (PLF) of 80 per cent. This despite the project being heavily subsidized, "exposing investors, taxpayers and consumers to high risk and is a potential stranded asset in the making". A senior executive associated with the project, however, said the Indian government was not subsidising the project in any form. “It was only providing loan through Exim Bank to promote Indian investment in Bangladesh,” he said.