Megaprojects in Bangladesh: An Investment Bonanza

Bangladesh is home to many megaprojects that have been under development in recent years. These projects represent an investment bonanza for the country. These megaprojects in Bangladesh are extremely large-scale investments that cost a billion dollars or more and take many years to complete. Involving hundreds of people and impacting millions, these projects are sure to bring great economic and social benefits to Bangladesh. 

In this blog post, we will take a look at some of the biggest megaprojects in Bangladesh and how they are impacting the country.

What is a Megaproject?

A megaproject is an extremely large-scale investment project. Megaprojects are typically defined as large-scale, complex ventures that require a minimum of one billion dollars of capital and take many years to develop. 

The cost of megaprojects can often exceed $1 billion, require extensive infrastructure development, and involve many people and stakeholders. These projects could potentially affect the lives of millions of people.

As per the Oxford Handbook of Megaproject Management,  

• “Megaprojects are massive, intricate endeavors that typically cost $1 billion or more, take many years to develop and construct, involve numerous public and private stakeholders, are transformative, and have an impact on millions of people.”

Megaprojects are typically undertaken by governments or companies in order to address certain issues or create substantial economic benefits for a region or country. Examples of megaprojects include bridges, highways, dams, stadiums, airports, rail lines, power plants, and ports. Such projects are often controversial due to their scale and cost, with some groups arguing that megaprojects create more harm than good.

Various Types of Mega Projects

Megaprojects can be divided into five distinct categories, each with its own unique characteristics and objectives. Based on the necessity and other aspects, here are five types of megaprojects –

1. Megaprojects Based on Infrastructure: 

Infrastructure projects are those that create or upgrade vital physical structures, such as bridges, roads, railways, airports, harbors, power plants, dams, and other large-scale engineering feats.

2. Megaprojects Based on Energy:

Energy megaprojects involve the creation of large-scale power generation or transmission infrastructures. For example, we can consider nuclear or hydroelectric power plants, wind farms, or solar installations.

3. Megaprojects Based on Social Impacts: 

Social megaprojects involve the creation or renovation of public facilities, such as hospitals, educational facilities, museums, and stadiums.

4. Megaprojects Based on Commercial Impacts:

Commercial megaprojects include large-scale real estate developments, manufacturing plants, and retail complexes.

5. Megaprojects Based on Environmental Impacts: 

Environmental megaprojects involve efforts to reduce environmental degradation and improve ecosystems through activities such as reforestation, waste management systems, and water treatment plants.

The 10 Megaprojects in Bangladesh that Will Change the Country Forever

While there can be many underdeveloped megaprojects in Bangladesh, the bottom 10 deserve a special highlight  

1) The Rooppur Nuclear Power Plant

The megaproject is known as the RNPP, which is the largest megaproject in the country. This is a proposed 2.4 GW nuclear power plant located in Ishwardi, Bangladesh. The project is being developed with support from the Russian state-owned corporation Rosatom. 

The construction of the plant began in 2017, and the first unit of the plant is expected to be operational by 2023. The project involves two VVER-1200 reactors that will have a capacity of 1,200 MW each. The project has a total estimated cost of $12.65 billion and is expected to generate over 6% of Bangladesh’s electricity by 2024.

2) Padma Bridge

This megaproject is a 6.15-kilometer-long bridge across the Padma River in Bangladesh. It is estimated to cost around $4 billion, and the project is already completed in June 2022.

3) The Matarbari Ultra Mega Power Plant

This is a 1,224 MW coal-fired power plant located at Matarbari in Cox’s Bazar district of Bangladesh. The project is set to be one of the largest and most advanced coal-fired power plants in the world.

The Matarbari Ultra Mega Power Plant will be built with support from the Japan International Cooperation Agency (JICA). Once operational, the Matarbari Ultra Mega Power Plant will provide reliable electricity to over 12 million people in Bangladesh. It is estimated that the project will add approximately 3% of Bangladesh’s total electricity generation capacity.

4) Rampal Power Plant

The Rampal Power Plant is a 1320-megawatt coal-fired power plant located near the Sundarbans mangrove forest in Bangladesh. It is estimated to cost over $3 billion and is expected to be completed by 2025.

5) Payra Port

The Payra Port is a deep-sea port located in the Patuakhali district of Bangladesh. It is estimated to cost around $3 billion and will be the country’s largest seaport when it is completed in 2024.

6) Dhaka Elevated Expressway

This megaproject is an 11-kilometer-long expressway that will connect Dhaka with Gazipur. It is estimated to cost around $1.7 billion and was expected to be completed by 2021.

7) Payra Thermal Power Plant

This project involves the construction of a 1,320 MW power plant in the Payra area of Patuakhali District. It has been financed by the China Exim Bank and is being implemented by a Chinese firm, SEPCO III Electric Power Construction Corporation. 

It is estimated that the plant will produce 6,000 million units of electricity annually. Construction on the project began in 2016 and was expected to start by 2021.

8) Karnaphuli Tunnel

The Karnaphuli Tunnel is a 3.4-kilometer-long tunnel that will connect Chittagong and Cox’s Bazar in Bangladesh. It is estimated to cost around $1 billion and was expected to be completed by 2021. 

9) The Dhaka Metro Rail Project

It is one of the most ambitious projects of its kind and will drastically reduce travel times for commuters in the capital city. The project will consist of four lines with a total length of nearly 28 kilometers. The lines will be linked by nine interchanges and will include up to 35 stations.

The project is expected to cost about $3.8 billion. The Strategic Transport Plan (STP) for Dhaka city is where it was first conceived. The metro rail project received approval in 2005, and it took seven years before construction could begin formally in 2012. The project is successfully completed in 2022. It is estimated that it will reduce traffic congestion in Dhaka by more than 60%, drastically reduce travel times, and improve air quality in the city. 

10) Bangabandhu Satellite-1

Bangabandhu Satellite-1 is the first ever Bangladeshi geostationary communications satellite, owned and operated by Bangladesh Communication Satellite Company Limited (BCSCL). This ambitious project has been estimated to cost around $250 million, funded mainly by the government of Bangladesh and international lenders.

This project was launched on May 11, 2018, from Cape Canaveral, Florida. It achieved its final geostationary orbit on June 17, 2018. The satellite is based on the Spacebus 4000B2 platform developed by Thales Alenia Space and consists of 24 Ku-band transponders. It will be used for broadcast services and internet connectivity, particularly in remote areas.

The satellite is expected to have a lifespan of 15 years. Bangabandhu Satellite-1 is a game changer for Bangladesh, providing the country with access to world-class communication technologies at affordable prices.

Perhaps, taking a look at the following table will give an overview of these 4 megaprojects in Bangladesh –

Why Invest in Megaprojects in Bangladesh?

Bangladesh is an emerging market with immense potential for growth. The country is well on its way to becoming one of the leading economies in South Asia. Investing in megaprojects in Bangladesh can be a lucrative opportunity. For investors, these projects are often very large-scale investments that can yield significant returns. 

Bangladesh has several advantages that make it an attractive destination for investors. For instance, take a look at these –

• The government of Bangladesh has committed to liberalizing the investment environment. This makes it more conducive for foreign investors. This means that businesses are able to get the necessary permits and clearances more quickly and efficiently than before.
• The government has also introduced several tax incentives and other benefits to encourage foreign investment. Bangladesh has an educated and experienced workforce. Many of these workers are willing to work for relatively low wages compared to other countries. This makes Bangladesh an attractive destination for labor-intensive industries.
• Bangladesh has a rapidly growing economy, which makes it easier for businesses to expand and capitalize on new opportunities.
• Furthermore, the country has a strong infrastructure that facilitates the setting up and operation of businesses. This includes a modern transportation network, a reliable electricity supply, improved telecommunications infrastructure, and high-speed internet connections.
• Lastly, Bangladesh offers investors access to a large consumer market. With over 160 million people living in the country, businesses have a huge potential customer base to target with their products and services.

Due to all of these elements, Bangladesh is a desirable location for investors looking to benefit from the potential for economic growth. Investing in megaprojects in Bangladesh can provide investors with significant returns in the long run.

Risks Involved

When investing in any megaproject, there are a number of risks to consider. These risks include the following ones –

1. The Financial Risks – These include cost overruns due to unexpected expenses or delays, resulting in higher costs than originally anticipated.
2. The Political Risks – Changes in government regulations that affect the project’s feasibility are included here. 
3. The Environmental Risks – These are various, such as potential damage to ecosystems, resources, and habitats.
4. The Social Risks – These could involve the displacement of communities and disruption of their livelihoods.
5. Risk of Delay and Funding – Megaprojects in Bangladesh often face delays due to a lack of funding, or changing political priorities. This has been seen in the Padma Bridge project, where the previous government abandoned it midway due to concerns about corruption.
6. Risk of Cancelation – Another risk is project abandonment or cancellation. 
7. Miscellaneous – Projects in Bangladesh have had to face various issues, such as delayed payments to contractors, which have further increased the cost of the projects. There have also been cases of inadequate construction work and quality control, leading to costly repairs and maintenance down the line. 

To ensure the successful completion of these projects, it is essential to carefully consider all potential risks before making an investment. In order to mitigate risk, it is important to monitor progress regularly and be prepared to adjust plans according to changes in the environment.

Bottom Line

Megaprojects in Bangladesh present an opportunity to make large-scale investments that will have a significant impact on the economy and people of the country. 

By taking a well-rounded approach to evaluating investment opportunities, investors can make smart decisions about whether investing in these projects is a viable option for them. Ultimately, the bottom line is that megaprojects in Bangladesh offer great potential for economic growth. This can be a worthwhile investment for those who can manage the risks involved.