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The pace of shift toward modern and environmental-friendly brick making technologies has picked up after the Department of Environment (DoE) started encouraging entrepreneurs to use improved technologies, instead of issuing environmental clearance certificates for conventional kilns. According to the latest statistics though, to date only 134 HHKs and 47 Tunnel kilns have been installed. This is less than 3% of total brick kilns operating in Bangladesh. Accordingly, strict enforcement of the directive would therefore compromise the supply of bricks to the Bangladeshi construction industry, with additional negative consequences on the labour market.
The inability to develop energy efficient, clean, and modern brick sector in Bangladesh can be considered a result of a general lack of (i) awareness of available modern technologies, (ii) technological and operational capacity, and (iii) targeted finance and attractive lending terms.
The Infrastructure Development Company Limited (IDCOL) is a government owned, non-bank financial institution. Since its inception in 1997, IDCOL has played a leading role in providing finance for medium to large-scale infrastructure and renewable energy projects in Bangladesh. IDCOL has a development mandate to stimulate the renewal of the stock of kilns in operation in Bangladesh; replacing the incumbent, polluting technologies with low emission, energy efficient technologies. To this end, under its Green Brick Programme, over the next 5 years, IDCOL proposes to provide USD50 million in financing for modern brick kiln projects, such as tunnel kiln and HHK.
IDCOL approached the CCAC Finance Initiative in order to provide assistance in its Green Brick Programme to address the barriers to finance limiting the uptake of lower emission kilns, whilst providing attractive energy efficient brick kiln financing.
In terms of the assistance offered by the CCAC Finance Initiative to IDCOL, advisory support for the appraisal of the energy efficient brick kiln projects in IDCOL’s pipeline is provided. The support includes include the assisting in the analysis and quantification of expected kiln performance, technology aspects, review of costs, and expected useful lifetime utilizing global/local data on the track records of the proposed technology. This report contains technical appraisal of a tunnel kiln project sponsored by Makrail Auto Green Bricks Ltd. in Bangladesh. The project is expected to be financed by IDCOL.