The government is set to sign a final tripartite contract on 2 September in Beijing for the Aminbazar waste-to-energy plant, a project that has seen multiple failed attempts over more than two decades.
The facility will generate 42 megawatts of electricity at 21.70 cents per unit, approximately Tk25, and is expected to begin commercial operations by August-September 2028.
State Minister for Local Government Mir Shahe Alam confirmed the development after a meeting between Local Government Minister Abdul Moyeen Khan and Chinese Ambassador Yao Wen at the Secretariat in Dhaka on Thursday.
The contract will be signed between Bangladesh Power Development Board, China Machinery Engineering Corporation (CMEC), and a Chinese bank. The project was initially agreed upon through a memorandum of understanding five years ago during the previous Awami League government.
“The tariff may appear high at first glance, but Bangladesh stands to gain significant environmental and economic benefits,” Alam said.
The minister explained that the project requires no government investment, will reduce Dhaka’s waste burden, produce organic fertiliser, generate monthly rental income for city corporations from landfill use, and offer carbon trading opportunities.
Bangladesh first explored waste-to-energy in 2000 with a Tk3,096 crore plan involving three private firms, but it stalled after the 2001 government change.
In 2011 and 2012, the then Awami League government began work on a business model for small-scale waste-to-energy. In 2013, a $300 million contract was signed with Italy’s Management Environment Finance Srl for projects at Aminbazar and Matuail, with the government agreeing to purchase electricity at Tk8.75 per unit. That project later failed.
In 2015, the then prime minister again directed planning. Four years later, the Local Government Division formed a working group for a waste-to-energy project.
The following year, Dhaka North City Corporation received 17 proposals, of which four were shortlisted. The Cabinet Committee on Government Purchase approved the 42.5 MW Aminbazar project that same year.
In December 2021, the government signed an agreement with CMEC for the Aminbazar plant at a project cost of Tk15,325 crore. A power purchase agreement was signed on 21 December 2021 at 21.78 cents per unit for 25 years, which at the then exchange rate was Tk18.29 per unit. Construction was scheduled to begin in 2024 but was delayed following the political transition.
Alam said China’s Power China has been requested to start work on generating 40-50 MW daily from Dhaka South City Corporation’s landfill.
Discussions are also ongoing to increase Chinese investment in renewable energy, including rooftop solar installations on government buildings under a net metering arrangement, where solar power would be used during the day and grid power at night. Chinese banks and businesses have agreed to provide funding.
