A new report has accused the Asian Development Bank (ADB) of locking Bangladesh into a $1.14 billion failed LNG power project, warning that continued reliance on fossil gas is creating stranded assets, raising electricity costs and deepening energy insecurity.
Released on the eve of ADB’s 59th annual meeting, the joint study by Coastal Livelihood and Environmental Action Network, NGO Forum on ADB, Big Shift Global and Urgewald highlights the troubled 800MW LNG-based Rupsha power plant in Khulna as a “clear example” of flawed energy financing.
The report, titled “How ADB’s Gas Addiction Locks Bangladesh in Stranded Assets – The Case of Rupsha 800 MW,” says the plant is operating at just 3–10% capacity due to persistent gas shortages, despite being promoted as a key solution to the country’s energy demand.
Mounting costs, limited output
With a total investment of $1.14 billion, the project has effectively become a stranded asset, the report says, generating little electricity while imposing heavy financial burdens through capacity payments and costly imported LNG.
Presenting the findings, Hasan Mehedi of CLEAN said the plant reflects a development model driven more by external financing priorities than national needs. “Such massive investments are locking Bangladesh into projects that neither ensure energy security nor serve the people,” he said.
The report argues that dependence on imported liquefied natural gas has significantly increased power generation costs, putting additional strain on public finances.
Criticism of ADB’s energy stance
Campaigners also questioned ADB’s climate commitments, saying its continued support for fossil gas contradicts its clean energy goals.
Marjorie from Recourse said the bank “cannot claim climate leadership while continuing to fund fossil gas projects like Rupsha,” while Rayyan Hassan of NGO Forum on ADB pointed to the influence of major shareholders, including the United States, in backing gas expansion.
Environmental and social concerns
Beyond economic losses, the report documents environmental damage in Khulna, including deteriorating air quality and risks to biodiversity, alongside displacement and livelihood disruptions for local communities.
Fiza Naz Qureshi of Big Shift Global questioned who ultimately benefits from such investments, arguing that public finance institutions continue to overlook both climate science and community impacts.
Call for policy shift
The authors call for an immediate halt to ADB financing for fossil gas projects, including suspension of support for LNG-based plants like Rupsha, and a redirection of funds toward renewable energy.
They also urge Bangladesh to adopt binding renewable energy targets and ensure greater transparency in energy financing decisions.
A critical crossroads
As a climate-vulnerable country, Bangladesh faces a pivotal choice between continuing fossil fuel dependence or accelerating a transition to renewables, the report concludes.
“Bangladesh has immense renewable energy potential — what is lacking is political will,” said Monower Mostafa of BWGED.
The findings add to growing scrutiny of international financial institutions’ role in shaping energy policy in developing countries, particularly as global pressure mounts to align investments with climate goals.