Neither Clean Nor Green: Stories of Cross Border Energy Projects in South Asia

Executive Summary

South Asia, a region rich in ecological diversity and cultural heritage, stands at a pivotal juncture in its energy trajectory. As nations across the region endeavor to address escalating energy demands, ambitious cross-border projects emerge as symbols of progress and integration. Yet, beneath their veneer of advancement lie intricate and often unsettling narratives of environmental degradation, social upheaval, and economic disparities. This report intricately examines three seminal projects—the Sunkoshi-3 Hydropower Project in Nepal, the Reliance Meghnaghat LNG Power Plant in Bangladesh, and the Adani Group’s 250 MW Wind Project in Sri Lanka, unraveling the nuanced interplay of their far-reaching impacts on local communities, fragile ecosystems, and regional geopolitics.

In Bangladesh, the Reliance Meghnaghat 718 LNG Power Plant has drawn significant foreign investment but raises questions about sustainability and environmental justice. Land acquisition and livelihood loss have heavily impacted local communities, while potential health hazards and accidents remain unaddressed. The plant's capacity charge mechanism has sparked significant debate, as it mandates payments for unused energy, potentially leading to annual costs between $51.13 million and $112.25 million. Over its 22-year lifespan, these charges could total between $1.12 billion and $2.47 billion, placing a substantial financial burden on the country. Additionally, the plant's highest annual emission rate could reach 68.84 tonnes per gigawatt-hour. The reliance on imported LNG raises concerns over lifecycle carbon emissions and methane emissions, further exacerbating climate challenges. To ensure a balance between economic growth, community welfare, and environmental protection, transparent Environmental and Social Impact Assessments (ESIA) are essential.

In Nepal, the Sunkoshi-III 683 MW Hydropower Project is designed to address Nepal's growing energy demands and facilitate regional electricity trade with India and Bangladesh. With an estimated cost of NPR 160 billion (USD 1.34 billion), the project is projected to generate 2,632.56 GWh annually by 2031. However, the displacement of more than 1,500 households, predominantly from indigenous communities such as the Majhi, raises profound concerns regarding fair resettlement and the safeguarding of cultural heritage. Environmental challenges, including biodiversity loss, deforestation, and increased sedimentation, further complicate the project's prospects. Additionally, both the construction and operational phases are anticipated to produce significant greenhouse gas emissions, presenting a notable challenge to Nepal's commitment to sustainable, low-carbon development. The project’s success hinges on the implementation of fair compensation mechanisms, comprehensive environmental mitigation strategies, and strong regional cooperation.

In Sri Lanka, The proposed Mannar 250 MW wind projects by the Adani Group, though aimed at renewable energy generation, threaten the Asian Flyway, an essential migration route for millions of birds. Despite the Sri Lankan government's support, critics argue the project compromises both environmental integrity and the nation’s energy security, granting undue influence to India. The project’s higher energy costs USD 8.85 cents per unit versus USD 5 from other developers highlight the financial inefficiency. Renewable energy projects, if poorly planned, can undermine sovereignty and cause lasting environmental and social harm. Energy policies must prioritize conservation, sustainability, and local impacts to prevent worsening the climate crisis. Immediate and responsible actions are essential to safeguard both people and ecosystems. The project’s alignment with India’s strategic goals also raises concerns about Sri Lanka’s energy security and sovereignty.

Together, these stories illuminate the broader challenges facing South Asia’s energy transition. They reveal the urgent need for transparent planning, inclusive stakeholder engagement, and a steadfast commitment to balancing development with environmental stewardship and social justice. Only by addressing these interconnected issues can South Asia chart a path towards a truly sustainable and equitable energy future.