Teesta project: Bangladesh seeks Tk 67 billion Chinese loan
The Teesta project is geopolitically sensitive. The United States, India, and 12 other countries are currently trying to include Bangladesh into the Indo-Pacific Economic Framework (IPEF). On the other hand, China wants Bangladesh to align with its strategic interests, and is now seeking Bangladesh’s participation in a forum alongside Pakistan.
Arifur Rahman Dhaka
Published: 19 Aug 2025, 08: 50
Dried Teesta river File photo
The interim government has moved to implement the Teesta Mega Project with Chinese loans and a letter has already been sent to China requesting funding of Tk 67 billion (6,700 crore).
Following chief adviser Professor Muhammad Yunus' visit to China in March, momentum around the project has picked up.
According to policymakers, a financial agreement between the two countries could be signed before the end of this year.
The full name of the project is "Comprehensive Management and Restoration of Teesta River Project", commonly known as the Teesta Mega Project.
Both China and India have shown interest in the project at different times.
India's former foreign secretary Vinay Kwatra expressed India's interest in investing in the Teesta project during his visit to Bangladesh in early May 2024. The Awami League government, which was ousted in a mass uprising in August, had also wanted India to finance the project.
During a press conference at Gonobhaban on 14 July 2024, former prime minister Sheikh Hasina said regarding the China visit, "China is ready, but I want India to do it. If India undertakes this project, they will continue to provide whatever is needed for it. That’s the plain truth—no sugarcoating."
Just 22 days after that press conference, the Awami League government fell in a student-led mass uprising, and Sheikh Hasina fled to India.
On 8 August 2024, an interim government was formed under the leadership of Professor Muhammad Yunus. The relationship between this new government and India remains tense.
Amid such circumstances, the current administration is aiming to implement the Teesta project with Chinese funding. In March, chief adviser Yunus visited China, and since then, relevant ministries and agencies have begun working to advance the project.
On 26 May, the water resources ministry sent a letter to the planning commission, mentioning Chinese loan support for the Teesta project. In the second week of July, the Economic Relations Division (ERD) also sent a letter to the Chinese embassy.
Female farmers are working in a potato field on Teesta River bed as the river has dried up in Kaonia upazila of Rangpur. Photo: Moinul Islam, Rangpur
Speaking about this, on 5 July, planning adviser Wahiduddin Mahmud told Prothom Alo that the incumbent government is interested in implementing the Teesta project with Chinese loans, and China also wants to proceed.
He stated that both sides are moving forward with mutual consent. As the project design has not yet been finalised, the primary task now is to complete the design. Once that is done, the Development Project Proposal (DPP) and the financial agreement process can proceed simultaneously.
According to the project documents, the first phase of the Teesta project is estimated to cost $750 million, which is equivalent to Tk 91.5 billion (calculated at Tk 122 per dollar). Of this amount, $550 million (around Tk 67 billion) has been requested as a loan from China. The remaining funds will come from the government’s exchequer. Work on the project is scheduled to begin in 2026, with a target to complete it in 2029.
The letter from the water resources ministry states that the feasibility study for the project has already been completed and expert opinions will be sought on the matter.
The Teesta project is extremely important for Bangladesh for three main reasons: to control flooding in the Teesta basin during the monsoon; to reduce riverbank erosion before and after the monsoon; and to increase water flow in the river during the dry season----Ainun Nishat, Water and climate change expert.
The ministry also attached the feasibility report with its letter. The study was conducted by Power Construction Corporation of China (PowerChina), a state-owned Chinese company that specialises in planning, constructing, financing, and investing in infrastructure projects.
After reviewing the letter and the feasibility report, the planning commission sent a separate letter to the Economic Relations Division (ERD) on 1 July, stating that the preliminary cost estimate for the project has been approved by the planning adviser, subject to a reasonable cost justification. The commission also said it supports seeking a loan from China for the project. The ERD is the government agency responsible for coordinating foreign loans and aid.
ERD secretary Shahriar Kader Siddiky told Prothom Alo that a letter has already been sent to China requesting a loan for the Teesta project and that the project formulation process is underway.
According to a source at the ERD, once China receives the loan request, the Chinese government will draft and send a preliminary agreement.
Meanwhile, the water resources ministry will finalise the project proposal. These two processes will run in parallel.
Desertification has been going on as the Teesta basin lacks water flow. But the area is sensitive as it is near the Siliguri corridor. India does not want the presence of China in the area. India will oppose if steps are taken to implement the project with funding from China-----Maj. Gen. (retd) ANM Muniruzzaman, BIPSS President.
When asked about China’s role in financing the Teesta project, Chinese ambassador to Bangladesh Yao Wen told the media at the National Press Club on 29 July that China is interested in working with Bangladesh on the project.
He, however, noted that they have not yet received any formal request from the Bangladeshi side.
Drought in summer, erosion in monsoon
The Teesta is a transboundary river shared by Bangladesh and India. It flows through India’s Sikkim and West Bengal states before entering Bangladesh. India has constructed dams on its side and withdraws water from the river. Due to this water withdrawal and riverbank erosion, the livelihoods and settlements of people living along the Teesta in Bangladesh are under threat.
Experts say that the lack of water in the Teesta during critical periods has hindered poverty reduction in the northern districts of Gaibandha, Nilphamari, Lalmonirhat, Rangpur, Kurigram, and Dinajpur. A poverty map published by the Bangladesh Bureau of Statistics (BBS) in January shows these northern districts as having relatively higher poverty rates.
According to data from the Bangladesh Water Development Board (BWDB), the Teesta River stretches 115 kilometres within Bangladesh. Of this, 45 kilometres are prone to erosion, with conditions being particularly severe along 20 kilometers. Continuous erosion occurs in the Kurigram district, particularly in Rajarhat, Ulipur, and Chilmari upazilas.
Erosion also takes place in Lalmonirhat, Nilphamari, Rangpur, and Gaibandha. So far, no effective measures have been implemented to prevent this erosion.
Syeda Rizwana Hasan, Adviser on Water Resources, said in a written statement to Prothom Alo on 30 July that the Teesta is an international river. As a downstream country, and in the absence of an agreement over many years, Bangladesh has little control over its flow and is not receiving its fair share of water.
She further said that the residents whose livelihood and lives depend on the river are long plagued by erosion, the threat of flooding and the shortage of irrigation water, have for years been demanding the implementation of the Teesta Mega Plan and related projects, which would ensure a sustainable flow of water in the river and protect people from sudden floods and severe erosion.
“Together with the people living along the Teesta, and with assistance from China, we are working towards that very goal,” she added.
To be continued.............................