ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Why New Delhi Must Withdraw from the Rampal Power Plants

 The joint decision of Indian and Bangladeshi governments to build coal-fired thermal power plants in Rampal upzila close to the ecologically rich and sensitive Sundarbans will undo whatever gains that may have been made in the bilateral relations between the two nations under the Sheikh Hasina-led Awami League government.

The governments of Bangladesh and India signed a memorandum of understanding (MoU) on 11 January 2010 to set up two 660 megawatt (MW) capacity coal-fired thermal power plants in Rampal upzila in Bagherhat district in Bangladesh. The proposed 1,320 MW Rampal power plants are a joint- venture initiative between the Bangladesh Power Development Board (BPDB) and the Indian National Thermal Power Corporation (NTPC) at a cost of $1.68 billion. On 30 August 2010, the BPDB and the NTPC signed another MoU as the lead agencies on behalf of their respective governments. Thereafter, on 29 January 2012, the two state-owned companies formed a private joint venture company on a 50:50 equity basis—the Bangladesh–India Friendship Power Company Pvt Limited (BIFPCL)—under the Companies Act (Bangladesh) 1994 to build the power plants. The BPDB and NTPC will supply 30% of the project cost and the remaining 70% will be financed through external loans (CEGIS 2013).

Several commentators argue that the Rampal plant is meant to be a demonstration of India’s firm backing of the current Sheikh Hasina-led Awami League government. India–Bangladesh relations have seen major improvements under Hasina’s rule. Bilateral relations between the two countries nosedived during the previous Bangladesh Nationalist Party (BNP) regime, as India accused the BNP of colluding with the Inter-Services Intelligence agency of Pakistan and harbouring anti-India elements to destabilise the north-eastern states of India.

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