PM's China visit: Dhaka to seek investment in green energy, EVs
Dhaka is preparing to organise a major investment conference in Beijing during the visit, which is scheduled from 23 June to 26 June, to engage directly with Chinese investors
Bangladesh is set to seek substantial Chinese investment and technology transfer in renewable energy generation and electric vehicle (EV) manufacturing during Prime Minister Tarique Rahman's upcoming official visit to China, with several memoranda of understanding (MoUs) expected to be signed.
Dhaka is preparing to organise a major investment conference in Beijing during the visit, which is scheduled from 23 June to 26 June, to engage directly with Chinese investors.
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New economic zones and equity shifts
The government is expected to sign an agreement with the China Road and Bridge Corporation (CRBC), appointing it as the developer for a proposed Chinese Economic Zone in Bangladesh. The deal will also encourage Chinese investment in a planned free trade zone. Concurrently, preparations are under way to sign a land allocation agreement with the Handa Group for investment in the Keraniganj Economic Zone.
According to proposals from the Bangladesh Economic Zones Authority (Beza), Bangladesh will hold a 30% stake in the Chinese Economic Zone after land development, with China retaining the remaining 70%.
This specific equity split represents a deliberate institutional shift by the Economic Relations Division (ERD). In a comparative report, the ERD noted that a previous transaction for the Japanese Economic Zone in Araihazar, Narayanganj – where Japan received 76% equity against Bangladesh's 24% – had inadvertently compromised the country's strategic financial interests.
The proposal to appoint CRBC as the developer is expected to be placed before the Cabinet Committee on Economic Affairs, chaired by the Finance Minister, for approval today. The overarching Chinese Economic Zone project secured approval yesterday at the Executive Committee of the National Economic Council (Ecnec) meeting, chaired by the Prime Minister.
Beijing proposes broader financial tie-ups
During the visit, China is also expected to propose Bangladesh's participation in several regional financial and economic initiatives, including the Shanghai Cooperation Organisation Development Bank, the Global Development Initiative, the Cross-border Interbank Payment System and the International Economic and Trade Cooperation Initiative on Green Mining and Minerals.
Bangladesh is also reviewing a proposal to introduce Panda bonds denominated in Chinese yuan.
The Shanghai Cooperation Organisation Development Bank is a China-backed multilateral financial institution focused on financing infrastructure, industrial development and technological modernisation projects across member states while promoting regional connectivity and cross-border trade.
One of the key objectives of the 10-member multilateral lender that includes India, Russia and Iran is to expand the use of national currencies, particularly the Chinese yuan, in trade and financial settlements and reduce reliance on the US dollar.
The Cross-border Interbank Payment System serves as China's official infrastructure for clearing and settling international transactions in renminbi.
A delegation from the Export-Import Bank of China recently visited Bangladesh to discuss proposals related to Panda bonds and Bangladesh's possible participation in the Cross-border Interbank Payment System. During the visit, the delegation held meetings with officials from Bangladesh Bank, the Ministry of Finance and the Economic Relations Division.
Officials also said China may request Bangladesh to join the International Economic and Trade Cooperation Initiative on Green Mining and Minerals, a multilateral framework launched at the 20th G20 Summit in South Africa that aims to strengthen supply chains for critical minerals required for the global green transition while ensuring greater benefits for resource-rich developing countries.
According to officials, China has also proposed launching negotiations on a bilateral free trade agreement, signing a currency swap agreement, upgrading the Bangladesh-China investment agreement and establishing a Chinese bank in Bangladesh.
Green energy and EV cooperation
Officials at the Power Division said China is the global leader in renewable energy investment and technology and has also earned international recognition for producing high-quality electric vehicles at competitive prices.
As Bangladesh seeks to strengthen its energy security, the government is looking to attract significant domestic and foreign investment into renewable energy while placing greater emphasis on electric vehicle manufacturing. The proposed budget for the next fiscal year includes extensive tax incentives to encourage investment in both sectors.
"If the proposed memorandum of understanding is signed, Chinese investment and technology transfer will take place in Bangladesh's renewable energy and electric vehicle sectors. The two countries will also jointly conduct research on green energy and electric vehicles," a Power Division official said.
Hospital and mega-infrastructure projects
Officials at the Economic Relations Division said a bilateral agreement could also be signed during the PM's visit for the establishment of a 1,000-bed Bangladesh-China Friendship Hospital in Nilphamari, with China expected to provide grant financing for the project.
Bangladesh may also sign an agreement with China for the implementation of the "Expansion and Modernisation of Mongla Port" project. An earlier attempt to secure Chinese financing for the project during the previous government reportedly did not proceed because of objections from India.
The government is also expected to seek Chinese financing for several major infrastructure projects, including the Teesta Barrage Project, the proposed Padma Barrage Project, the Second Padma Bridge and the Second Jamuna Bridge.
The Economic Relations Division has already collected a list of priority projects from various ministries that could potentially be financed by China.
According to division officials, five major projects worth approximately $4 billion are currently under implementation in Bangladesh with Chinese loans. During the visit, Bangladesh is expected to request faster loan disbursement and accelerated implementation of these projects.
These are the Expansion and Strengthening of Power System Network under the DPDC Area, the Power Grid Network Strengthening Project under PGCB, the Construction of the Dhaka-Ashulia Elevated Expressway, the Rajshahi Wasa Surface Water Treatment Plant and the procurement of four new vessels for Bangladesh Shipping Corporation.
