Matarbari Power Plant Project

$1.31bn loan deal signed with Japan

Staff Correspondent

1 July, 2019 12:00 AM printer

Japan will provide US$1.31 billion for Matarbari coal-based power plant project under its 40th Official Development Assistance (ODA) loan package.

Exchange of notes and a loan agreement for 143,127m Japanese Yen for the project was signed between the government and Japan International Cooperation Agency (JICA) at Economic Relations Division (ERD) in Dhaka on Sunday.

JICA is providing Tk 28,939.03 crore out of Tk35,984.46, the cost of 1,200MW power plant project.

So far, Japan has signed loan agreements for JPY 300,502 million under 35th, 37th, 38th, 39th and 40th ODA loan packages.

Rate of interest of the loan per annum is 0.9 percent for construction and 0.01 percent for consulting services.  Front end fee is 0.2 percent while repayment period is 30 years including 10 years grace period.

Objective of the project is to meet growing electricity demand and to improve stable power supply by installing 1,200MW (600MW x 2 units) ultra super critical coal-fired power plant at Matarbari of Maheshkhali upazila under Cox’s Bazar district.   

The project was approved by ECNEC on August 2014. Implementation period of the project is July 2014-June 2024.     

In addition to the power plant’s financing, two financing deals were signed for another Tk 178.09 crore for two other projects, one for defence ministry and other for the ERD.  ERD Secretary Monowar Ahmed signed the exchange of notes with Japanese Ambassador to Bangladesh Hiroyasu Izumi and the loan agreements with JICA Chief Representative Hitoshi Hirata.

“The projects will contribute to creating a modern Bangladesh. Huge development is taking place in the country. Japan is proud to assist in the country’s infrastructure and ICT sector development,” Hiroyasu Izumi commented. “A power industrial hub is being created at Matarbari, where JICA is extending support. With the implementation of the projects, not only demand for power will be met but also a pool of skilled manpower will be created,” said Hitoshi Hirata.  ERD secretary hoped that Japanese projects will be complete prior to their completion schedule because of intensified monitoring.

 Matarbari power plant project Director NM Obaidullah informed that 19 percent work has been done till May against the target to complete 15 percent by June this year.

In the current fiscal year, Japan government pledged to provide JPY275,786m for five projects under 40th ODA loan package. During Prime Minister Sheikh Hasina’s recent visit to Japan, loan agreements amounting to 132,659 million or approximately $1.19 million or Tk 10,200 crore for four other projects were signed on 29 May 2019.  The projects are: Matarbari port development project, Dhaka mass rapid transit development (metro rail line-1), foreign direct investment promotion project and energy efficiency and conservation promotion financing project (phase-2).