Japan to lend $1.31b for Matarbari power plant

Japan has agreed to lend Bangladesh $1.31 billion under the 40th official development assistance (ODA) loan package for the construction of the Matarbari ultra-supercritical coal-fired power plant. 

Earlier, Bangladesh signed a deal for over $1.2 billion with Japan for four projects, including the second metro rail connecting the capital’s airport and Kamalapur, during Prime Minister Sheikh Hasina’s visit to Japan on May 28-31.  

Now, the total assistance of Japan under the 40th ODA reached $2.51 billion, which is 38.67 percent higher than the 39th. 

Monowar Ahmed, secretary of the Economic Relations Division (ERD), signed the exchange of notes with Hiroyasu Izumi, ambassador of Japan to Bangladesh, and the loan agreement with Hitoshi Hirata, chief representative of the Bangladesh office of the Japan International Cooperation Agency (Jica). 

The interest rate of the new loan is 0.09 percent for construction and 0.01 percent for consultation services while the front-end fee is 0.2 percent with 30 years of repayment period, including 10 years of grace period.

The objective of installing the 1,200MW plant at Maheshkhali upazila in Cox’s Bazar is to meet the growing electricity demand and ensure stable power supply, the ERD said in a statement yesterday. 

The project was approved by the Executive Committee of the National Economic Council on August 12 in 2014. It is scheduled to be complete by June 2024.

Besides, the government signed two grant agreements, involving $15 million or Tk 126.55 crore.

Of them, JICA will provide Tk 93.55 crore for the densification of global navigation of tidal station in Bangladesh and Tk 33 crore for a project of “human resources development scholarship”.