US$1.3 Billion Investment For Bay of Bengal Offshore Wind Energy Project Proposed

Denmark’s Copenhagen Infrastructure Partners (CIP) and Copenhagen Offshore Partners (COP) have submitted an investment proposal to the Government of Bangladesh to develop a commercial, utility-scale offshore wind project with an initial capacity of 500 MW.

Valued at US$1.3 billion, this initial investment proposal and continued collaboration off the coast of the Bay of Bengal could be a key driver of Bangladesh’s progression into a green nation.

This offshore wind project, in particular, presents a unique opportunity for the country to maximise the utilisation of its coastal resources, supporting the development of the ‘Blue Economy’.

The proposal comes at a crucial point in time for Bangladesh that despite ambitious clean energy targets remains heavily reliant on fossil fuel imports, a costly decision due to inflation-related price shocks.

As a highly climate-vulnerable nation, Bangladesh’s annual Gross Domestic Product (GDP) could fall by as much as 9%  by the middle of the century due to climate change, according to the World Bank.

Bangladesh, therefore, needs to adapt rapidly to climate change, while simultaneously accessing cleaner, more efficient technologies that support decades of development and growth, a shift away from unstable fossil fuel imports, and limiting emissions as the country aims to achieve high-income status and elimination of absolute poverty by 2041.

Technology Transfer and Job Creation

With the Institute for Energy Economics and Financial Analysis (IEEFA) projecting an annual need of US$1.7 Billion in funding for the green transition, perhaps this multibillion-dollar proposal from CIP and COP could also kick start a new wave of sustainable investment.

In early June, Bangladesh and Denmark approved a “Joint Action Plan” for the next five years under the ‘2022 Sustainable and Green Framework Engagement’.

During a recent Dhaka visit by Dan Jørgensen, the Danish Minister for Development Cooperation and Global Climate Policy, had agreed to a partnership in green and clean technologies and investment for sustainable development.

While both sides have recognised the importance of improving the ease of doing business in Bangladesh for more Danish investment, Denmark further expressed its interest in supporting renewable energy, maritime, and blue economy sectors, among others.

Once implemented, this offshore wind project will be the first of its kind in Bangladesh – and possibly South Asia, enabling a technology transfer that would accelerate the learning curve for a nascent industry and reduce barriers to entry for future projects.

The preliminary study findings suggest that hundreds of direct and indirect jobs could be created during the construction phase, in addition to dozens of permanent positions during the 30-year operational phase of the project.

CIP and COP have proposed Summit Group – a leading infrastructure operator and developer in South Asia and the largest independent power producer (IPP) in Bangladesh – to join its consortium.