NDF - Financing for climate change and development projects

Railway NAMA helps position Bangladesh Railway for future funding

Photo: ADB
Photo: ADB
Photo: ADB
11.06.2020

The NDF-funded project has the potential to help Bangladesh Railway reduce CO2 emissions and black carbon by as much as 3 million tons cumulative up until 2030 and by around 450,000 tons per year after that.

In partnership with ADB, NDF has completed a round of technical assistance as part of a larger upgrade program by the state-owned Bangladesh Railway, which could have far-reaching environmental, social and economic gains for the country.

The overall deliverables from NDF’s EUR 300,000 grant centered on supporting Bangladesh Railway in developing a Nationally Appropriate Mitigation Action (NAMA) framework. NAMA refers to a set of policies and actions that reduce greenhouse gas emissions in developing countries. NDF’s grant contributed specifically to providing technical expertise in the following areas:

1. A study on fossil fuel subsidy reform
2. The NAMA for the Railway sector including financing options
3. A NAMA monitoring manual and NAMA monitoring report for 2014 - 2015 and 2015 - 2016
4. Finalising and registering the NAMA with UNFCCC NAMA Registry
5. Capacity building of Bangladesh Railways on quantifying carbon emissions, emission reductions and sustainable development benefits
6. A Concept Note for the Green Climate Fund (GCF) related to the Tongi-Akhaura dual gauge line, estimated to cost approximately 1 billion USD, proposed for co-financing by GCF and ADB

Commenting on the project, NDF Program Manager Martina Jägerhorn says: “We hope that the successful registration of the NAMA by the Bangladesh Government will help Bangladesh seek climate financing for future projects improving the railway sector.”

Rail NAMA based on Bangladesh Railway Master Plan
The NDF contribution complemented Bangladesh Railway’s Master Plan, which aims at increasing the capacity and energy efficiency of its entire inter-urban railway system. The overall plan boasts 235 projects spanning 20 years, from 2010 to 2030, with an estimated cost of USD 30 billion. NDF’s technical support helped Bangladesh Railway to quantify the potential emission reductions for investments in rail-tracks, locos as well as in other investments. The major climate impact was measured in CO2 reductions, but the NDF supported analytical work also covered other sustainable development impacts such as improved health, less accidents, better air quality, and lower fuel imports.

Rail transport cleaner, cheaper, safer
Rail travel is already much more energy efficient per passenger or tons of freight, compared with other modes. It is also relatively cheap, punctual, health-friendly and with far-fewer accidents, making it one of the principal travel modes for people in Bangladesh.

With the goal of attracting even greater flows of passengers and freight over to rail travel, railway improvement projects are well-positioned for success,” Jägerhorn affirms, “bringing significant additional health and human welfare benefits that go beyond climate mitigation.” 

Planned energy efficiency upgrades include double tracking, loop lines, modern signalling and installing modern and efficient locos, carriages and wagons, all aimed at reducing fossil fuel consumption and subsequently reducing emissions of CO2 and black carbon. Current projections point to around 3 million tons cumulative over the period from 2017 to 2030 and around 450,000 tons per year by 2030. These include direct emissions from fossil fuel combustion and indirect emissions from extraction, refining and transportation of the fuel. The cumulative economic impact from lower fuel costs is estimated at around 0.5 billion US dollars.

“Upgrading existing infrastructure and increasing the role of rail in inter-urban passenger and freight transportation,” says Jägerhorn, “represent a sizable opportunity for Bangladesh to shift freight and passengers from road to rail and, through that mode shift, achieve significant cuts in CO2 emissions."

The NAMA project marks the fourth NDF-supported project in Bangladesh under the organisation’s climate change mandate, with three larger climate projects previously supported through its challenge fund, NCF.

“We look forward to opportunities to team up on future high-value projects promoting the well-being and sustainable development of the country of Bangladesh,” Jägerhorn says.

Written by Laurel Colless