August 30, 2008

ADB to wait for decision on Phulbari coal mine project

Dispelling a rumor that it has pulled out from financing the Phulbari coal mine project, Asian Development Bank has said it would wait for a government decision in this regard.

Asian Development Bank, in a statement said that "ADB will continue to monitor the situation on the ground with full sensitivity to local conditions and we will also wait for Bangladesh government's decision on how to proceed in harnessing the rich energy resources, including those of Phulbari.”

The release added that “ In the interim, we think, it is premature for ADB to continue dialogue with the private sector under the current circumstances. So, at this stage we are completely open to the suggestions of Bangladesh, civil society and other stakeholders and prepared to review our engagement in this project to ensure that all sensitivities, including concerns relating to safeguard issues are fully considered."

According to sources, the ADB was keen to finance USD 300 million, about 10% of the total fund requirement, to implement the project. The Asia Energy conducted a feasibility study on its plan to develop the Phulbari project through an open cast mining method. It submitted the study report, which included an environmental impact assessment and a development plan, to the government in 2005. But the government is yet to approve the project.

Sources said a number of NGOs, who are opposing the open pit Phulbari coal mine project and demanding its developer UK based Asia Energy to go, have spread the rumor that the ADB has decided to withdraw from the project. The NGOs have also been carrying out a campaign internationally and pursuing the ADB to abandon its project financing plan.