Bangladesh Eyes Chinese Loan for Teesta Mega Project Amid Geopolitical Tensions

The “Comprehensive Management and Restoration of Teesta River Project,” widely known as the Teesta Mega Project, has re-emerged as a strategic priority for Bangladesh. The interim government, led by Nobel laureate Professor Muhammad Yunus, is moving ahead with plans to secure a Tk 67 billion ($550 million) loan from China to finance the initiative.Officials expect that a financial deal between Dhaka and Beijing could be finalized before the year ends.A Contest of Influence.The Teesta River scheme carries significant geopolitical weight. While the United States and India are working to integrate Bangladesh into the Indo-Pacific Economic Framework (IPEF), China is simultaneously courting Dhaka to join regional platforms aligned with Beijing and Islamabad. Both powers see the Teesta project as a potential foothold in shaping Bangladesh’s future alliances.

India has also shown repeated interest in the project. During his visit to Dhaka in May 2024, former Indian foreign secretary Vinay Kwatra discussed potential Indian investment in the Teesta basin. At the time, the Awami League government—since toppled in a student-led movement in August—favored New Delhi’s participation.

Former prime minister Sheikh Hasina even publicly stated in July 2024: “China is ready, but I want India to take it on. If India commits, they will deliver whatever is required.” Less than a month later, her government was ousted, and she fled to India.The Yunus Government’s Approach Since taking office on 8 August 2024, the interim administration has struggled with tense relations with New Delhi. Against this backdrop, Dhaka is leaning toward Beijing to move the Teesta initiative forward.Following Yunus’ official trip to China in March, momentum accelerated. The Ministry of Water Resources formally wrote to the Planning Commission in May highlighting Chinese support, and the Economic Relations Division (ERD) followed up with the Chinese embassy in July.

Planning adviser Wahiduddin Mahmud confirmed in early July that both sides are now working in consensus. The immediate priority is to finalize the project design, which will then allow the Development Project Proposal (DPP) and financing agreements to proceed in parallel.Project Scope and Timeline

According to official documents, the first phase of the Teesta Mega Project is estimated at $750 million (around Tk 91.5 billion). Bangladesh has requested $550 million in loans from China, while the remainder will be financed from domestic sources. Construction is planned to start in 2026 and finish by 2029.

Currently, much of the Teesta riverbed lies barren, forcing local farmers to cultivate potatoes and other crops on its dried-up banks. Policymakers argue that restoring the river through comprehensive management will not only boost agriculture but also strengthen Bangladesh’s water security and energy potential.