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Japan to give $1.5b more for Matarbari plant

Japan yesterday signed an agreement with the government to provide $1.5 billion in loans for the Matarbari ultra-supercritical coal-fired power project in Cox's Bazar.

This is the second instalment of the loan package. In the first instalment, 30 billion yen was provided. Now, 217.556 billion yen will be given, which is equivalent to $1.5 billion. About $1.67 billion has been provided so far under the loan package.

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The rate of interest of this loan will be 1.6 percent, with the part concerning payments to consultants carrying an interest rate of 0.1 percent per annum, said the press release from the embassy in Japan. The repayment period will be 30 years, including a ten-year grace period.

This project is being implemented to meet the growing electricity demand and involves setting up two units of 600MW power plants with state-of-the-art ultra-super-critical technology in Matarbari, Cox's Bazar.

The total cost of the project is Tk 51,854.88 crore, of which Japan is providing Tk 43,921.03 crore, the government of Bangladesh Tk 6,406.16 crore and Coal Power Generation Company Bangladesh (CPGCBL) Tk 1,527.69 crore.

According to the project plan, the implementation period is between July 2014 to December 2026.

As of August, the project's physical progress is 78.3 percent and financial progress is 65.1 percent, said the press release from the finance ministry.

Japan is releasing funds for the project in phases; it has so far provided 437,754 million yen in six tranches, which is equivalent to Tk 32,379 crore.

So far, Japan has provided about $30.34 billion in official development assistance to Bangladesh.

Sharifa Khan, secretary of the Economic Relations Division, and Ichiguchi Tomohide, chief representative of the JICA Bangladesh office, signed the agreement at the ERD office in Dhaka's Sher-E-Bangla Nagar area.