Bangladesh News Bangladesh - Japan Relation

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Local garment exporters today demanded removal of trade barriers in Japan to boost apparel shipments to the East Asian nation.

There is enormous scope for Japan and Bangladesh to go for increased trade and investment to derive more mutual benefits, said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Hassan spoke in a meeting when Japanese Ambassador to Bangladesh ITO Naoki paid a courtesy call on the BGMEA president at the association's office in Dhaka.

They discussed possible ways of expanding trade between Bangladesh and Japan and further deepening bilateral relationship.

They stressed the need for removing existing trade barriers to facilitate more trade and investment, according to a statement from the BGMEA.

They also expressed willingness to initiate communication between businessmen in Bangladesh and Japan, particularly those who are involved in the fashion industry.

Hassan mentioned Bangladesh's intend to increase garment exports to Japan and sought cooperation from the envoy in this regard.

He urged Naoki to encourage Japanese businessmen to make investments in potential sectors in Bangladesh, especially in the non-cotton textile sector.

The garment sector of Bangladesh is increasingly focusing on apparels made from synthetic fibres to meet the rising demand in the global market.

The Japanese envoy hinted at extending incentive facility to apparel factories inside export processing zones against their exports to new markets.

He also said Bangladesh should now work more for ease of doing of business to attract Japanese investment.

The BGMEA president expressed hope that Japan would continue providing its cooperation to Bangladesh in its march towards more prosperity.

BGMEA Vice President Shahidullah Azim, Vice President Miran Ali, Director Asif Ashraf and First Secretary of Embassy of Japan Haruta Hiroki were also present.


 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Factories in Araihazar Economic zone, dedicated to Japanese entrepreneurs will start next year, Japan's Ambassador to Bangladesh Ito Naoki said.

He disclosed the information during a courtesy call with Md Jashim Uddin, president of the Federation of Bangladesh Chambers of Commerce & Industries (FBCCI) on Thursday afternoon, reads a press statement.

Ito Naoki said Bangladesh would be a major destination for Japanese entrepreneurs to invest in the future.

"The interest of Japanese companies is increasing, especially around the Araihazar economic zone. There is an opportunity to further develop the economy of Bangladesh by utilising this interest," he said.

However, the Japanese envoy called for making the investment environment friendlier.

Restriction on overseas remittance from branches, limitation in loans for working capital, restriction on royalty remittance, overdue payment, delay of LC, collection of additional income taxes and VAT, renewal of bond licence, the wage gap between inside and outside EPZ etc. are creating barriers to the investments, he said.

FBCCI President Jasim assured that his organisation will work sincerely with the government to solve the problems mentioned by Naoki.

He said more than a hundred Japanese companies have been doing business in Bangladesh for many years. Besides, Japan is one of the major partners of Bangladesh in development projects.

He added the popularity of Japanese products in this country is also relatively high as the domestic market has increased due to economic development.

Therefore, Japanese companies investing in Bangladesh are more likely to be profitable, he said.

FBCCI Vice Presidents Mohammad Amin Helaly, Md Habib Ullah Dawn, Directors Md Naser, Priti Chakraborty and Secretary-General Mohammad Mahfuzul Hoque were also present at the meeting.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1647242122703.png


The Japan International Cooperation Agency (Jica) has sought Bangladesh to raise the contract prices and extend deadlines for three infrastructural development projects in Dhaka that aim at reducing traffic congestion and facilitating mobility in the capital city.

Citing Covid-led project slowdown, reduced labour productivity, spiked spending for health safety, pricier construction materials and soaring freight costs, the Embassy of Japan in Dhaka sent a letter to the Economic Relations Division (ERD) recently in this regard.

In the letter, Japanese Ambassador Ito Noaki emphasised the stake of Japanese consultants and contractors in the projects with around 73% Jica funding.

Alarmed by the cost and time escalation demand for Dhaka projects, the ERD reached out to 15 secretaries of different ministries and 43 project directors of 33 Jica-funded projects across Bangladesh, and asked them to estimate the potential cost and time escalation if Jica's demand for revision is met.

But economists and development experts have called for a case-to-case assessment instead of allowing the demand by and large, and suggested that the government enhance its negotiation capacity.

Already sluggish implementation now faces time extension

Two of the three Jica-funded projects in Dhaka – Airport-Natunbazar-Kamalapur metro rail and Hemayetpur-Bhatara metro rail – are at the initial stage, while Uttara-Motijheel metro rail project is nearing end.

Both the Airport- Kamalapur metro rail line (MRT-1) and Hemayetpur-Vatara metro rail (MRT-5) were approved by Ecnec in 2019. The authorities said the Covid-19 outbreak delayed the projects by around two years at the very beginning.

Jica had already hinted that MRT-5 (northern route) is set to face a 11% cost escalation, while MRT-1 will also brace the same if the construction takes too long to kickstart.

Meanwhile, the state-owned Dhaka Mass Transit Company Limited (DMTCL), which is implementing the Uttara-Motijheel (MRT-6) metro rail, has proposed cost escalation.

The three projects cost the government more than Tk1.17 lakh crore, and Jica is providing 73% – around Tk85,162 crore – as flexible and low-cost loans.

Japanese consultants, contractors and suppliers dominate the projects as Jica is the key financier to those.

Jica started a 21km metro rail, including a 5km subway, work in Jakarta when Bangladesh started the Uttara-Motijheel project in 2013.

Jakarta metro rail was constructed quite quickly and was inaugurated in 2020, while it is not yet certain when the entire construction of the Uttara-Motijheel metro rail will be completed.

According to Planning Commission data, the government is implementing 33 development projects with Jica's funding. The total cost of these projects has been estimated at around Tk272,185 crore, and Jica will provide more than 74%, or Tk20,1796 crore, of the cost.

According to authorities, Jica provides loans at much lower interest rates than the World Bank, the Asian Development Bank, the Asian Infrastructure Development Bank or China. Even with different fees, the interest rate of Japanese loans is below 1%.

Doubling cost for Matarbari plant road already on table

According to ERD sources, Jica is providing a maximum of Tk43,921 crore for the Tk51,855 crore Matarbari Ultra Super Critical Coal-Fired Power project. The agency is lending another Tk505 crore for the plant's link road and Tk949 crore for the power distribution network.

The main power plant and distribution network have logged significant progress, while the link road construction was scheduled to be completed by 2020. But the Road Transport and Highways Division has recently proposed extending the project's deadline to 2025.

The cost for the road construction has also been proposed to double.

Jica is also providing Tk12,893 crore for the ongoing Tk17,777 crore deep-sea port at Matarbari. Of this, the agency will provide Tk6,743 crore for the construction of the main port and Tk6,150 crore for the construction of the road connecting the port. Although a limited number of foreign ships have started arriving at the port, the progress of the road construction hovers around 1%.

Other Jica-funded key projects include expansion of the Hazrat Shahjalal International Airport, construction of the Jamuna Railway Bridge, construction of second bridges at Kanchpur, Meghna and Gumti, strengthening the Dhaka-Chattogram power grid, the Karnaphuli Water Supply Project (Phase 2), and the Chattogram City Outer Ring Road.

Implementation was at a snail's pace even before Covid

With Jica funding, implementation of the Tk2,676 crore Chattogram City Outer Ring Road Project connecting the port city's Patenga to Sagarika started in 2011. The Chattogram Development Authority (CDA) has been implementing the work that has received Tk2,263 crore so far.

The progress of the project is 85% as the latest deadline ended December last year.

The progress of Chattogram Wasa Karnaphuli Water Supply Project (Phase 2) that began in 2013 is now 56%. Jica is providing Tk2,801 crore for the Tk4489 crore project. The latest deadline of the project will end next year.

The progress of the National Power Transmission Network Development Project, which started in 2013 at a cost of Tk2,500 crore, hovers around 50%.

Under the Natural Gas Efficiency Project, the construction of a gas transmission line from Dhanua-Elenga to the western end of Bangabandhu Bridge has been ongoing since 2014. The following year, a prepaid metre installation project was launched for Titas customers. Both the two projects, which are due to expire next year, have been sluggish so far.

Go case-by-case

Shamsul Haque, civil engineering professor at the Bangladesh University of Engineering and Technology, told The Business Standard that Japan not only finances in Bangladesh but also in other countries including India. The island nation has not come up with such cost revision demand elsewhere.

He feared if the government nodded to the demand of Jica, other foreign financiers too would come up with similar calls.

Former World Bank lead economist Zahid Hussain told TBS that any decision to increase the project cost and deadline by and large due to pandemic fallout would not be logical.

"Rather, each project needs to be analysed on a case-by-case basis to see how much project implementation has been hampered by Covid and to what extent," he noted.

Zahid Hussain said the government should enhance its negotiation capacity with the financer.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
1647589728794.png


Bangladesh Economic Zones Authority (BEZA) and the Bangladesh Special Economic Zone Limited have signed an agreement for the development work of the Bangladesh Special Economic Zone (Japanese Economic Zone).

The agreement was signed by Abdul Azim Chowdhury, executive member of Beza and Sumitomo Corporation's General Manager Eisuke Nakanishi at a Dhaka hotel on Wednesday.

The agreement was formed to build roads, power and water supply lines, a common effluent treatment plant (CETP) and water treatment plant in the zone, according to officials familiar with the matter.

Beza and Sumitomo Corporation, which has been appointed by Japan as the land developer of the zone, have jointly formed Bangladesh Special Economic Zone Ltd in 2019 for the infrastructural development of the zone.

The governments of Bangladesh and Japan are jointly developing the zone on 1,000 acres of land in Narayanganj, 32 kilometres from the capital Dhaka.

This agreement is a milestone for the 50th anniversary of the bilateral relations between Japan and Bangladesh.

The chief guest on the occasion was Prime Minister's Principal Secretary Dr Ahmed Kaykaus. Honourable guest on the occasion was Japanese Ambassador to Bangladesh Naoki Ito while special guests were Chief Representative of the Bangladesh Office of Japan International Cooperation Agency (Jica) Yuho Hayakawa and Eisuke Nakanishi, general manager of Sumitomo Corporation.

Beza Executive Chairman Shaikh Yusuf Harun presided over the function.

Bangladesh and Japan are developing the economic zone on a government-to-government basis.

The Executive Committee of the National Economic Council (Ecnec) approved the Tk2,582crore project in March 2019. Tk454.35 crore will come from government funds and Tk 2,127.82 crore from Jica as loan. The deadline for the project is 30 June 2023.

According to project sources, its cumulative financial progress till January 2022 is 19% and physical progress is 55%. The land development and boundary wall building work has been completed by 74% and 18%, respectively.


Japanese Ambassador to Bangladesh Ito Naoki has expressed hope that direct flight between Bangladesh and Japan will be launched by this year.

"Bangladesh Biman is also ready for launching the operation of the direct flight," Naoki said at the agreement signing ceremony for the development work of the Bangladesh Special Economic Zone (Japanese Economic Zone) Wednesday (16 March).

He said that Bangladesh Special Economic Zone would be a symbol of trade relations between the two countries.

"If the special economic zone is implemented, not only Bangladesh but also different countries of the entire region will benefit. This will set a good example for attracting foreign investment," he added.

The Japanese envoy further said that the government of Bangladesh should continue incentives and various benefits for the investors.

"At the same time, various obstacles related to customs clearance, imposition of various taxes and payment of import duty by the telegraphic system must be removed," he said.

Addressing the programme, Prime Minister's Principal Secretary Dr Ahmed Kaikaus said Bangladesh is working side by side with Japan.

"Bangladesh Economic Zone Authority is creating a good and competitive environment. Now different economic zones can see and learn from each other," he added

Bangladesh Economic Zones Authority (BEZA) Executive Chairman Sheikh Yusuf Harun informed that BEZA is providing hassle free services to the investors in the economic zone.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
For Bangladesh, export to Japan is a multifaceted affair.

The good things are: the island nation holds a $1.28 billion export potential and offers duty- and quota-free market access. The bad aspect is Bangladesh cannot seize it, because of a lack of external trading skill, local bureaucratic tangles, corruption and Bangladesh's higher cost of doing business, according to economists and businessmen at a dialogue in Dhaka Wednesday.

Take the example of Bangladesh's T-shirt and cotton vest export to Japan. The annual export now hovers around only $127 million though the segment is potentially as big as $357 million. In other words, 64% of the export opportunities remain unused.

On the eve of the golden jubilee of Dhaka-Tokyo diplomatic ties, the Centre for Policy Dialogue (CPD) noted Bangladesh can earn $526 million more from the current top ten exporting items if the irregularities are sorted out.

The ten items are now fetching the country $754 million as 77% of the export potentials are untapped.

Meanwhile, Japanese Ambassador to Bangladesh ITO Naoki reminded of the challenges stemming from Bangladesh's official graduation to a developing country in 2026. After graduation, most Bangladeshi products will have to enter the Japanese market with a 7.4% to 12.8% tariff.

The CPD requested for signing a free trade agreement and effective GSP Plus agreements by Japan so that Bangladeshi products can enjoy different market facilities to the island nation. In reply, the ambassador emphasised removing the trade barriers immediately.

ITO Naoki said, "The rapidly developing economy of Bangladesh is attracting Japanese investments, as the investment to Bangladesh has almost tripled in the last decade."

The ambassador noted that the local industry must be diversified, new technologies need to be introduced and a skilled workforce should be developed.

"I believe the expansion of the FDI [foreign direct investment] particularly from the Japanese private sector will help Bangladesh to address those challenges. Increasing the ratio of the FDI with the GDP is very crucial," he said, adding "We expect further progress in ease of doing business and coordinated and focused effort on the field."

"We hope the government will take up the issues seriously that the Japanese companies are now facing such as delay in the customs clearance, various taxations, restriction on the telegraphic transfer for import payment and discrimination in the export incentives among the domestic and foreign companies," added ITO Naoki.

CPD Chairman Prof Rehman Sobhan said some of the major infrastructural development projects have been implemented in the country with the support of Japan, when other donors were hesitating to come to Bangladesh.

He also said that Japan has become the largest bilateral donor for Bangladesh and is now implementing some major infrastructures including the port and power sector.

He asked the Japanese counterparts how far Japan would remain with Bangladesh, especially in the energy sector, as Bangladesh is moving away from coal-fired power projects responding to the climate change agenda.

CPD Research Fellow Syed Yusuf Saadat presented the keynote at the programme.

He said although Japan has been able to utilise more than 71% of its export potential in Bangladesh, Bangladesh has been able to utilise only 58% of its export potential in Japan so far. If the existing problems can be solved, Bangladesh will be able to increase its export earning to $526 million annually from current top ten exporting items.

He said trade with Japan would become more difficult after the transition from the least developed country (LDC), adding that about 98% of the country's products are now entering the Japanese market with duty and quota-free facilities.

Syed Yusuf Saadat also said the demand for caregivers in Japan has been increasing over the years due to the unprecedented increase in Japan's ageing population and life expectancy. The growing young population of Bangladesh can be placed in the Japanese health sector to alleviate the deficit of caregivers in the country.

Planning Minister MA Mannan praised the government of Japan and their investors as they implemented some quality infrastructure projects.

The minister said corruption is like cancer in Bangladesh. Though the government has a firm anti-corruption stance, corruption trials often take a longer time to be disposed of.

With increasing development projects, Mannan said the scope for corruption widened too.

Asif A Chowdhury, president of the Japan Chamber of Commerce & Industry (JBCCI), said the major obstacle behind the lower investment from Japan and fewer trade with the country lies with the revenue board.

"If you go to customs or ports, you would find that graft is very rampant there," he claimed.

CPD Research Director Khondeker Golam Moazzem said, "Japan-Bangladesh partnership should be developed even beyond trade. It should be extended to investment, service, labour market and human resource development."

CPD Executive Director Fahmida Khatun moderated the event.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh

On April 11, commencing at 11:40 a.m., Mr. HAYASHI Yoshimasa, Minister for Foreign Affairs of Japan, held a meeting with H.E. Dr. A. K. Abdul Momen, Foreign Minister of the People’s Republic of Bangladesh, who is visiting Japan, for approximately 45 minutes. The overview of the meeting is as follows.
  1. At the outset, Minister Hayashi welcomed Minister Momen’s visit to Japan and expressed his intention to work closely with Minister Momen to elevate the Comprehensive Partnership between Japan and Bangladesh, as they mark the 50th anniversary of the establishment of diplomatic relations this year, to even greater heights. In response, Minister Momen stated that together with Minister Hayashi, he would like to further enhance Japan-Bangladesh diplomatic relationship in this milestone year.
  2. The two ministers welcomed the port-visit by a Maritime Self-Defense Force vessel at Chattogram in January, marking the beginning of the 50th anniversary of the establishment of diplomatic relations, and shared the view to build up such security cooperation. The two ministers also confirmed that, based on the concept of a Free and Open Indo-Pacific, which is shared by both countries, they will continue to advance cooperation, including various infrastructure projects under the Bay of Bengal Industrial Growth Belt (BIG-B) initiative, towards the further development of Bangladesh, which is located in a strategically significant position connecting Southeast Asia and the Indian subcontinent. In this context, Minister Momen expressed his gratitude for Japan’s longstanding support, including the provision of COVID-19 vaccines. Minister Hayashi also raised the importance of ensuring development finance to meet international rules and standards, including transparency and equity.
  3. The two ministers exchanged views on the issue of the displaced persons from Rakhine State, Myanmar and affirmed that they will continue to work together. Minister Hayashi stated that Japan is supporting Bangladesh’s initiatives, including by being the first to implement humanitarian assistance for displaced persons who have been relocated to Bhasan Char. Minister Momen expressed his gratitude for Japan’s support.
  4. Regarding the situation in Ukraine, Minister Hayashi stated that Russia’s aggression creates a serious situation that jeopardizes the foundations of international order which encompasses not only Europe but also Asia, stated that such unilateral attempts to change the status quo by force are completely unacceptable, and strongly condemned the harming of civilians in violation of international law. Minister Momen stated that he is also seriously concerned by the situation in Ukraine. The two ministers concurred to continue to work together closely in response to the situation in Ukraine. In addition, both ministers confirmed that they will continue to coordinate with each other in their response to North Korea, including the launch of an ICBM-class ballistic missile on March 24 and the abductions issue. The two ministers also reaffirmed continued cooperation on global issues such as the climate change.
  5. Both ministers shared the view to further enhance bilateral relations, including the strengthening of high-level visits, cultural exchanges, people-to-people exchanges, and economic relations, taking the opportunity presented by this year marking the 50th anniversary of the establishment of diplomatic relations.
 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Japanese agricultural machinery manufacturer Yanmar has expressed interest to set up a factory in Bangladesh to manufacture combine harvesters for reaping paddy.

Yanmar is willing to set up the plant in a joint venture with ACI Motors in Bangladesh.

A delegation led by Sogo Det, international business head of Yanmar, came up with the proposal in a tripartite meeting with a team from ACI Motors and Agriculture Minister Muhammad Abdur Razzaque at Bangladesh Secretariat yesterday.

Yanmar and ACI have decided to set up the plant as the combined harvesters of Yanmar have high demand in Bangladesh, the ministry said in a statement.

Sogo Det said they have an initial plan to go into production locally from early 2024.

In the meeting, Razzaque said the shortage of agricultural workers was intensifying day by day in the country.

"Labourers are not available during the harvesting period. Besides, the production cost in traditional methods is much higher and time consuming too," he said.

Therefore, the government is working on mechanisation of agriculture on a priority basis and machinery is being supplied to farmers at 50 per cent subsidy across the country and 70 per cent subsidy in haor and coastal areas, said the minister.

Welcoming the initiative of Yanmar, Razzaque said, "We are emphasising manufacturing and assembling agriculture machinery locally. So, we will give all-out support to Yanmar in setting up a factory in Bangladesh."

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Tokyo will provide Dhaka with 16.58 billion Japanese yen or Tk11,306 crore, for two projects under Japan's 43 ODA (official development assistance) loan package.

Of that, 133,399 million yen or around Tk9,093 crore, will go to the Dhaka Mass Rapid Transit Development Project (Line-5 Northern Route) and 34,462 million yen to the Southern Chattogram Regional Development project.

Officials at the Economic Relations Department (ERD) said funding for the two projects was finalised at a virtual meeting on 31 May.

Representatives from their headquarters and the Dhaka office of the Japan International Cooperation Agency (Jica) attended the meeting.

Md Shahriar Kader Siddiky, additional secretary at the Economic Relations Division (ERD), said they are preparing to sign the loan agreement with Jica.

"The deal could be signed in June but the date is yet to be set," he added.

The Dhaka Mass Rapid Transit Development Project (Line-5: Northern Route), will build out a 20km metro rail line. There will be a 6.5km elevated metro rail from Hemayetpur to Aminbazar and a 13.5km underground metro rail from Aminbazar to Bhatara.

In September 2019, the project received government approval.

The project will cost a total of Tk41,238 crore, of which Tk29,117 crore will come from Jica.

In 2020, Jica already provided 55,696 million Japanese yen (Tk4,528 crore) for the project. Now, the development agency is providing the second tranche of financing.

According to the implementing agency, Dhaka Mass Transit Company Limited (DMTCL), a feasibility study and basic design have been completed for launching the metro rail from Hemayetpur to Bhatara by 2028.

Work on various surveys, detailed design, and land acquisition is now ongoing. The detailed design is 51.60% completed, it added.

Land acquisition is 60% completed for the first east-west MRT corridor of Dhaka being constructed on this route.

Md Aftab Hossain Khan, project director of the Dhaka Mass Rapid Transit Development Project (Line-5): Northern Route said, "It will take another year to start construction on the route. The loan agreement with Jica will be signed for the second time next June."

"The agreement signed in August 2020 for the first phase of the project is being spent now," he added.

The standard of living for residents of Chattogram, Cox's Bazar and Bandarban districts, will also improve with the infrastructure development under the Southern Chattogram Regional Development project, the second project besides Dhaka's metrorail, partly funded by Jica.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Japanese Ambassador Ito Naoki has said his country is keen to join Bangladesh government's ongoing construction efforts of second Padma Bridge while the first one was built due to Prime Minister Sheikh Hasina's "far-sighted vision and political astuteness".

"I am sure that once the second Padma Bridge becomes a reality, Japanese government and JICA will be in a position to consider the possibility of participation in the construction efforts by the government," he told a group of selected journalists at his residence on Tuesday (June 21, 2022).

The envoy said right now the Japanese government's position is: "We should seize the opportunity to offer our cooperation (in building the second Padma Bridge) to the government of Bangladesh".

"I am sure that it (Padma Bridge) is going to be very impactful, successful ... so the second Padma Bridge will be a reality," he said.

Japan has so far provided assistance to build 134 small and large bridges all over Bangladesh, he noted.

Terming the Padma Bridge as a national dream and pride which demonstrates what Bangladesh can do for its economic development and stability, the envoy said it would truly fulfill the growth potential of Bangladesh.

The envoy said the year 2022 of Bangladesh would be remembered by the world with so many examples of quality infrastructure including inauguration of Padma Bridge this month and metro rail by end of this year.

Recalling Prime Minister Sheikh Hasina's visit to Japan in 1996, Naoki said she made a request to the Japanese side for cooperation on two bridges – Padma Bridge and Rupsha Bridge.

The envoy said Japan International Cooperation Agency (JICA) conducted the preliminary feasibility study for the Padma Bridge and constructed Rupsha Bridge.

The ambassador, however, said it was rather unfortunate that JICA could not be part of financing the Padma Bridge.

He highly appreciated Prime Minister Sheikh Hasina's courteous decision to build the bridge by own funding and said it clearly demonstrates what Bangladesh is capable of doing on its own.

The envoy said Japan focuses on a number of mega projects in Dhaka, Chattogram and Cox's Bazar in line with the Bay of Bengal Industrial Growth Belt (BIG-B) initiative for the construction of an industrial corridor.

 

Isa Khan

Experienced member
Moderator
Messages
7,240
Reactions
53 10,301
Nation of residence
Bangladesh
Nation of origin
Bangladesh
Japan has decided to pull out of funding the Matarbari coal-fired power plant phase-2 that the Bangladesh government planned to implement after having ditched 10 other coal-fired projects last June.

The project was supposed to be implemented by the Japan International Cooperation Agency (Jica) under the Official Development Assistance (ODA).

But at a press conference on Wednesday, Japanese Foreign Press Secretary Hikariko Ono announced that support for coal-fired power generation projects by the ODA for Bangladesh and Indonesia will be suspended, reports The Sankei news.

The major investment suspension decision came following a global campaign against financing coal-fired projects.

Following the announcement, two projects – Bangladesh's Matarbari Ultra-Ultra Critical Pressure Coal-Fired Power Generation Plan Phase-2 and Indonesia's Indramayu Coal-Fired Power Generation Plan – will be cancelled.

The plan was to build a power plant with an output of about 1,200MW in south-eastern Bangladesh.

As per its commitment to become carbon neutral by 2050, Japan has decided to phase out its own coal-fired projects and stop financing overseas ones.

Ono said, "We will continue to cooperate with Bangladesh in its economic and social development, including the development of the Matabari region."

In the revised Power Sector Master Plan 2016, Bangladesh targeted to achieve a capacity to generate 60GW electricity by 2041 through different types of primary energy mix, in which the share of gas was considered 35%, coal 35%, import and renewable 15%, nuclear 10%, and 5% from liquid fuel.

To meet the targets, it has taken dozens of coal fired projects since 2011.

However, amid the growing protests at home and abroad and the scarcity of finance, the government cancelled 10 coal projects.

After that, the Power Division has been working to implement a total of 11 projects, including the Matarbari project, with a capacity of 12,147MW.

The Matarbari power project was planned to be implemented by the Coal Power Generation Company Bangladesh Limited (CPGCBL), one of the state-owned power generation companies.

Mohammed Shahid Ullah, executive director (Finance) at CPGCBL, told The Business Standard that the project was at the initial stage.

"This was a government-to-government investment plan. We have not received any such decision from Japan yet," he said.

Talking about the progress of the project, Shahid Ullah said Jica was conducting a feasibility study for the project. Apart from this, there was no progress.

At present, the Coal Power Generation Company Bangladesh is implementing the Matarbari 1200MW coal-fired power plant with Jica's finance.

Unit 1 of the 1.2GW project is scheduled to be operational by January 2024 while the second unit is due to be completed by July 2024. The estimated cost of the 1st phase of the project is Tk51,854 crore.

Earlier, the Sumitomo Corporation, one of the three EPC contractors which began implementing the first phase of the Matarbari coal-fired power plant project, dismissed any possibility of taking part in the second phase as per its latest policies on climate change issues.

In the policy updated on February 28, it declared no more investments in any new coal-fired power generation business.

Sources at the Power Division said the project was in the list of the coal-fired projects that the government intended to implement after cancelling 10 such types.

In the last climate summit, in its Nationally Determined Contribution, Bangladesh committed to limiting the coal-fired power plant capacity to 12,147MW by 2030 as a conditional contribution to reduce greenhouse gas emissions.

The second phase of the Matarbari plant was considered in the total coal capacity by 2030, sources said.

Congratulating the Japanese government for this move, Hasan Mehedi, member secretary at the Bangladesh Working Group on External Debt, said, "This is very exciting news that coal is being abandoned globally."

For the Matarbari area, he suggested the authorities follow Orion's example that implemented a solar plant with the capacity of 134.3 megawatts peak on a site that had originally been developed for a coal power project in 2014.

Matarbari should be covered with solar projects, he also said.

Meanwhile, although there has been a drive to turn against coal, Brussels and NGOs recently expressed concerns about several European Union countries, including Germany, reverting to using coal for power generation following the Russian invasion of Ukraine.

"We have to make sure that we use this crisis to move forward and not to have a backsliding on the dirty fossil fuels," European Commission chief Ursula von der Leyen told several European media outlets in an interview on Tuesday.

The shift comes when a power-hungry Europe is increasingly starved of Russian gas and oil, but the change seriously undermines the EU's ambition to become climate neutral by 2050, Al Jazeera reported.

Countries are continuing to back fossil energy rather than investing enough in renewables," Neil Makaroff, of Climate Action Network, an umbrella organisation for such groups, told Al Jazeera.

"The risk is substituting one dependency for another: importing Colombian or Australian coal, US or Qatari liquified natural gas, to replace Russian hydrocarbons."

At present, Bangladesh has an installed capacity of 22,348MW electricity while the demand hovers between 10,591MW to 12,133MW.

 
Last edited:
Top Bottom