UNB, Dhaka :
An Exchange of Note (EoN) is likely to be signed between Dhaka and Tokyo during Pr ime Minister Sheikh Hasina’s four-day visit to Japan beginning Saturday night.
According to official sources, the EoN will contain an assurance for $3.8 billion equivalent Japanese loan for implementing a 1200 MW coal-fired power plant and a dedicated deep sea port at Matarbari in Cox’s Bazar.
Japan International Cooperation Agency (JICA) will provide the highest ever single loan for the two infrastructure projects.
A top official at JICA’s Dhaka office confirmed the matter of signing of the EoN between the two Prime Ministers of Japan and Bangladesh.
“JICA will later sign a loan agreement with Bangladesh on June 16 in Dhaka as follow-up of the EoN,” said the Japanese donor agency official, preferring anonymity.
He, however, said that during the loan signing, JICA president plans to be present in Dhaka.
The JICA official further said that the entire loan will be provided to Bangladesh in
two or three tranches of which $ 400 million will be given in the first tranche.
JICA has long been working in Bangladesh to support infrastructure development, particularly in energy and communications sectors.
JICA has already carried out feasibility studies on setting up of the power plant and for a dedicated deep sea port in Matarbari.
Following the positive result of the study, a high-powered team from Japan, comprising members of the JICA and the Japan Bank for International Cooperation (JBIC) had visited Dhaka several times and finalised the terms and conditions of the proposed loan last month.
On the loan, JICA will charge a nominal 0.01 percent interest against repayment by Bangladesh government in next 40 years. The grace period of the loan will be 10 years.
Power Ministry officials here said they are expecting that after signing of the loan with JICA, the implementation procedures will start soon for the two projects.
“We have a plan to start implementation process for the power plant immediately after the signing of loan agreement and we want to complete the power plant’s installation within next three to four years,” said a senior official at the Power Ministry.
He also mentioned that there will be two units of the planned coal-fired power plant, each with 600 MW capacity. The plant will use imported coal for power generation and the coal is expected to be imported from Australia and Indonesia.
The official informed that the government has a plan to create a hub of coal-fired power plants in the Matarbari area as it has been found very suitable for such projects from environmental and navigational point of view.
Because, this area has good navigational depth for the arrival of coal carrying mother vessels while environmental impacts on the ecology are expected to be minimal, he added.
Meanwhile, the government has prepared a Power System Master Plan with the help of JICA where it envisioned to generate more than 40,000 MW power by 2030 of which 50 percent will be coal-fired.
It also forecast that natural gas supply will drop after 2017 while coal supply will rise as an alternative source of natural gas.
In the Master Plan, the target composition of power supply as of 2030 has been set at 50% for domestic and imported coal; 25% for domestic and imported (in the form of LNG) natural gas; and 25% for other sources such as oil, nuclear power and renewable energy.
An Exchange of Note (EoN) is likely to be signed between Dhaka and Tokyo during Pr ime Minister Sheikh Hasina’s four-day visit to Japan beginning Saturday night.
According to official sources, the EoN will contain an assurance for $3.8 billion equivalent Japanese loan for implementing a 1200 MW coal-fired power plant and a dedicated deep sea port at Matarbari in Cox’s Bazar.
Japan International Cooperation Agency (JICA) will provide the highest ever single loan for the two infrastructure projects.
A top official at JICA’s Dhaka office confirmed the matter of signing of the EoN between the two Prime Ministers of Japan and Bangladesh.
“JICA will later sign a loan agreement with Bangladesh on June 16 in Dhaka as follow-up of the EoN,” said the Japanese donor agency official, preferring anonymity.
He, however, said that during the loan signing, JICA president plans to be present in Dhaka.
The JICA official further said that the entire loan will be provided to Bangladesh in
two or three tranches of which $ 400 million will be given in the first tranche.
JICA has long been working in Bangladesh to support infrastructure development, particularly in energy and communications sectors.
JICA has already carried out feasibility studies on setting up of the power plant and for a dedicated deep sea port in Matarbari.
Following the positive result of the study, a high-powered team from Japan, comprising members of the JICA and the Japan Bank for International Cooperation (JBIC) had visited Dhaka several times and finalised the terms and conditions of the proposed loan last month.
On the loan, JICA will charge a nominal 0.01 percent interest against repayment by Bangladesh government in next 40 years. The grace period of the loan will be 10 years.
Power Ministry officials here said they are expecting that after signing of the loan with JICA, the implementation procedures will start soon for the two projects.
“We have a plan to start implementation process for the power plant immediately after the signing of loan agreement and we want to complete the power plant’s installation within next three to four years,” said a senior official at the Power Ministry.
He also mentioned that there will be two units of the planned coal-fired power plant, each with 600 MW capacity. The plant will use imported coal for power generation and the coal is expected to be imported from Australia and Indonesia.
The official informed that the government has a plan to create a hub of coal-fired power plants in the Matarbari area as it has been found very suitable for such projects from environmental and navigational point of view.
Because, this area has good navigational depth for the arrival of coal carrying mother vessels while environmental impacts on the ecology are expected to be minimal, he added.
Meanwhile, the government has prepared a Power System Master Plan with the help of JICA where it envisioned to generate more than 40,000 MW power by 2030 of which 50 percent will be coal-fired.
It also forecast that natural gas supply will drop after 2017 while coal supply will rise as an alternative source of natural gas.
In the Master Plan, the target composition of power supply as of 2030 has been set at 50% for domestic and imported coal; 25% for domestic and imported (in the form of LNG) natural gas; and 25% for other sources such as oil, nuclear power and renewable energy.
