The Asian Development Bank’s latest investment proposal in Bangladesh’s Chattogram Hill Tracts (CHT) offers a useful lens through which to examine a wider development challenge facing South Asia’s hilly regions. On 1 September 2026, ADB approved a $175 million concessional loan for the Sustainable Energy Development and Community Empowerment in the Chattogram Hill Tracts Project. The project will extend and modernize electricity distribution networks across 26 remote upazilas in Khagrachari, Rangamati and Bandarban. It is expected to provide additional electricity access to at least 88,000 households, including about 35,000 households belonging to small ethnic communities. The investment includes 5,032 kilometres of new distribution lines, upgrades to 1,874 kilometres of existing lines, and six new substations.

The significance of this investment goes beyond electricity connections. ADB itself presents stable and reliable electricity as a means of supporting jobs, enterprises, education, healthcare and community resilience. The project includes livelihood training for at least 1,000 people, business-incubation support for more than 200 entrepreneurs, and orientation for 300 students on energy-sector careers and disaster-resilient energy systems. It will also support solar-powered drinking-water facilities and backup power for essential community facilities.

This combination is important because infrastructure does not automatically produce livelihoods. Electricity becomes economically transformative only when households, farmers and enterprises have the skills, finance, markets and institutional support required to use it productively. In a remote hill economy, reliable electricity can support food processing, refrigeration, agricultural value addition, small manufacturing, digital services, tourism-related activities and household enterprises. The livelihood component of the CHT project therefore gives the energy investment a broader economic purpose.

The environmental management dimension should be understood within this livelihood framework. Infrastructure in the CHT must operate in a landscape exposed to heavy rainfall, erosion, landslides and other environmental and climate-related risks. The project’s environmental assessment and management arrangements are intended to identify potential impacts, establish mitigation measures, and provide monitoring and institutional responsibilities. In this context, environmental management is not an alternative to livelihood development. It is part of protecting the infrastructure and productive conditions upon which livelihood development depends.

Infrastructure, Resilience and Productive Capacity

The real development test, therefore, is not simply how many households receive electricity. It is whether electricity becomes a productive capital. If a farmer can process produce locally, a small enterprise can operate more reliably, a young person can acquire an energy-related skill, or a woman can establish a home-based enterprise, the infrastructure begins to influence household income and employment. This is where the CHT experience has wider relevance for South Asia.

Across the region’s hilly areas, the relationship between infrastructure and livelihoods is particularly close. Distance from markets, difficult terrain and exposure to natural hazards can raise the cost of economic activity. Roads, electricity, water systems and digital connectivity consequently have a potentially larger livelihood effect than their physical form might suggest. Yet the same geographical characteristics that make infrastructure valuable also make it vulnerable.

Lessons from India's Northeast

India’s Northeast illustrates this dual relationship. Hilly states and districts depend heavily on agriculture, horticulture, bamboo, forests, tourism and small enterprises. Recent ADB investments in the region have sought to improve connectivity and develop natural-resource-based value chains. 

The broader lesson is that infrastructure is most useful when linked to local productive systems. Connectivity can help producers reach markets; electricity can support processing; and enterprise development can turn agricultural or forest resources into higher-value products.

Environmental management becomes important precisely because these productive systems depend upon the landscape. Bhutan demonstrates another aspect of the same problem. Its mountainous geography makes rural connectivity and infrastructure particularly sensitive to landslides, floods and other hazards. For dispersed communities, reliable roads, energy and water services are not simply conveniences; they determine access to markets, schools, health facilities and employment. Investment in resilience can consequently have a direct livelihood dimension.

Nepal provides a particularly clear illustration of the relationship between livelihood investment and environmental risk, although its experience need not dominate the regional analysis. ADB’s investments in Nepal’s hilly areas have supported agricultural income, horticulture, value addition and climate-resilient production. The Nuts and Fruits in Hilly Areas Project, for example, is designed to increase agricultural income through climate-resilient horticulture and improved value chains.

The severe floods and debris flows experienced in Nepal in August 2026 demonstrate why this resilience matters. ADB reported extensive damage to homes, infrastructure and essential services and subsequently provided a $5 million emergency grant for rescue and relief. The wider lesson is that when roads, irrigation, electricity, farmland or market facilities are damaged, the consequences are simultaneously environmental, infrastructural and economic.

Environmental Management as Development Infrastructure

For development investment, this suggests that the effectiveness of an EMP should not be considered only in terms of whether mitigation measures have been formally completed. Environmental management should help ensure that the infrastructure and productive assets financed by a project remain usable. In livelihood-oriented projects, environmental monitoring can therefore be complemented by attention to the continuity of economic activity: whether roads remain accessible, water systems function, electricity networks withstand shocks, and productive assets remain viable.

The same logic applies to the Himalayan and upland areas of Pakistan and Afghanistan, where agriculture and livestock livelihoods depend heavily on water, land and access to markets. It applies to Sri Lanka’s central highlands, where agricultural production is closely linked to land and water management. The specific livelihood systems differ, but the development challenge is broadly comparable: economic activity in hilly regions is deeply dependent on the environmental and physical systems surrounding it.

This is why EMPs should be understood as part of a larger development architecture. Their immediate role is to identify environmental risks, establish mitigation measures, monitor impacts and ensure corrective action. But in projects whose stated purpose includes improving livelihoods, the longer-term objective should be to help maintain the physical and natural conditions necessary for economic opportunity.

Development of Hilly Regions

The CHT project offers an especially contemporary example. ADB has combined a major investment in electricity distribution with livelihood training, enterprise incubation, community services and disaster-resilient energy measures. It is also designed to improve the participation of women and provide benefits to small ethnic communities.

This combination points towards a useful way of thinking about development in South Asia’s hilly regions. Infrastructure should be viewed as productive infrastructure when it enables people to earn, produce, trade and access services. Environmental management should be viewed as one of the mechanisms that helps protect that productive capacity.

The distinction matters. Not every EMP will create employment directly, and environmental safeguards should not be expected to substitute for employment programmes. Rather, the two should reinforce one another. Skills and enterprise support can help households use infrastructure productively; environmental management can help ensure that infrastructure remains functional; and resilient design can reduce the risk that a climate or environmental shock wipes out the gains generated by development investment.

The broader lesson for South Asia is equally important. Hilly regions cannot be developed simply by transferring lowland infrastructure models into mountainous terrain. Investment has to respond to local economic systems, geography and environmental risks. 

Roads need producers and markets. Electricity needs enterprises and skills. Water infrastructure needs climate resilience. Tourism needs local participation. And environmental management needs to be connected to the productive assets and livelihoods it is intended to protect.

The latest ADB investment in the Chattogram Hill Tracts therefore provides a useful contemporary starting point for this approach. Its central challenge is to convert improved electricity access into lasting economic opportunity. Its environmental management arrangements can help protect the infrastructure and natural conditions necessary for that opportunity to survive. Experiences from other hilly parts of South Asia reinforce the same principle.

(The writer is a retired Special Secretary, Government of India, and a commentator on financial, geoeconomic and regional issues. The views expressed are personal. He can be reached at ppmitra56@gmail.com.)