Japan is bolstering its financial support to Bangladesh's Matarbari Ultra Super Critical Coal-Fired Power Project with an additional 217,556 million Japanese Yen (JPY) or nearly $1.5 billion.  

The two governments inked an exchange of notes and a loan agreement for the 7th tranche of the project on Saturday as part of the 44th Japanese Loan Package's second batch, according to an official release.

The loan agreement was ceremoniously signed in the NEC-2 conference room of the Economic Relations Division (ERD) in the city. Sharifa Khan, the ERD Secretary, represented Bangladesh in the proceedings. On the Japanese side, IWAMA Kiminori, the Japanese Ambassador to Bangladesh, signed the exchange of notes while ICHIGUCHI Tomohide, Chief Representative at JICA's Bangladesh office, formalised the loan deal.

The Japan International Cooperation Agency (JICA) has been a consistent financial partner in the power project, already providing 437,754 million JPY in six previous tranches. This latest 7th tranche will bring JICA's contribution to 217,556 million JPY.

The Matarbari Ultra Super Critical Coal-Fired Power Project aims to meet the burgeoning electricity demand in Bangladesh and improve stable power supply through the installation of a 1200 MW (600MWx2 units) power plant in the Matarbari area of Maheshkhali Upazila in Cox's Bazar.

The project is estimated to cost a total of Tk 518.55 billion. Of this sum, JICA is contributing Tk 439.21 billion, the government is providing Tk 64.06 billion, and the implementing agency CPGCBL is covering Tk 15.28 billion.

With a project implementation timeline stretching from July 2014 to December 2026, the scheme has already made notable strides. As of August 2023, the physical progress of the project stands at 78.30 percent while its financial progress is at 65.14 percent.

The loan comes with a stipulated interest rate of 1.60 percent for construction, 0.10 percent for consultancy services and a one-time front-end fee of 0.2 percent. The loan is repayable over a 30-year period, inclusive of a 10-year grace period. Japan is Bangladesh's single largest bilateral development partner. With its Official Development Assistance (ODA) commitments exceeding $30.34 billion to date, Japan has been a pillar in the socio-economic upliftment of Bangladesh since the latter's independence.

The funds have found diverse applications, including but not limited to power, roads, bridges, telecommunication, agriculture, health, education, water supply and sanitation, rural development, and environmental and human resource development.