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Japanese ODA Loan
Ex-Ante Evaluation(for Japanese ODA Loan)
South Asia Division 4, South Asia Department
Japan International Cooperation Agency
１．Name of the ProjectCountry: The People’s Republic of Bangladesh
Project: Matarbari Ultra Super Critical Coal-Fired Power Project (VI)
Loan Agreement: November 22, 2021
２．Background and Necessity of the Project(1) Current State and Issues of the Power Sector and the Priority of the Projectin Bangladesh
Demand for electricity has risen steeply in Bangladesh in recent years due tofactors such as stable economic growth and the progression of industrialization,and is expected to increase roughly 7.9% per year over the next decade from2020 (Ministry of Power, Energy and Mineral Resources, 2016). Meanwhile, theproduction volume of domestically produced natural gas—the fuel for gas-fired
power generation, which the country relies on for roughly 70% of total power
generation—has topped out; to meet rapidly increasing demand for energy, thecountry began importing liquefied natural gas (LNG), which is roughly five times
more expensive than domestically produced natural gas, in 2018. The country’s
overdependence on a single source of energy has prompted concerns that any
problems with the fuel supply or relevant facilities could result in energy security
problems such as disruptions to the energy supply or rises in the cost thereof.
Therefore, the country faces the critical task of diversifying its energy supply
structure. Bangladesh has limited potential for hydraulic power generation
because most of its territory lies at or below an elevation of 9 m above sea level.
The country also has limited land suitable for introducing renewable energy, suchas land for large-scale photovoltaic power generation, because its highpopulation density makes land acquisition difficult. As a means of realizing thediversification of energy sources and providing a stable supply of energy torespond to increasingly robust demand for electricity underpinned by factors suchas sustained economic growth, the Government of Bangladesh plans to increase
the portion of facility capacity dedicated to coal-fired power generation, which ismore economically efficient than imported LNG, from roughly 1.5% (2016) toroughly 32% (2041) (Ministry of Power, Energy and Mineral Resources, 2018).

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The Eighth Five Year Plan (FY2021-FY2025) sets a goal to enhance the power
generation capacity to ensure supply of unhindered quality power from the grid,with 100% population connected to quality electricity supply, and highlights theneed to establish a power system capable of providing a stable availability ofelectricity regardless of time of day or weather through the establishment ofmultiple energy hubs, including the Matarbari Ultra Super Critical Coal-Fired
Power Plant. The Revisiting Power System Master Plan (PSMP) 2016 (Ministryof Power, Energy and Mineral Resources, 2018) also indicates policies for using
imported LNG, imported coal, and nuclear power as energy sources forresponding to increases in demand for electricity that cannot be met bydomestically produced natural gas. Additionally, the Government of Bangladesh
formulated Nationally Determined Contributions (NDCs) 2021 (Updated) in 2021
that set out targets (e.g. using ultra supercritical technology in coal-fired power
generation) on the condition that it receives additional support from the global
community.
Under the Matarbari Ultra Super Critical Coal-Fired Power Project (“theProject”), a highly efficient ultra supercritical coal-fired power plant and otherfacilities that run on imported coal will be constructed to meet rapidly increasing
demand for electricity in Bangladesh while concurrently striving to diversify its
energy sources. The Project has been identified as one of Bangladesh’s highpriority infrastructure improvement projects being carried out under the directsupervision of the Prime Minister of Bangladesh, and in the Japan-Bangladesh
Leaders Telephone Talk (August 2020), the Japanese and Bangladeshi prime
ministers affirmed that Japan and Bangladesh would continue collaborating towork toward development in the Southern Chattogram area, including the highly
efficient coal-fired power station.
(2) Japan’s and JICA’s Cooperation Policy and Operations in Power and Energy
sector
The Country Development Cooperation Policy for the People’s Republic ofBangladesh (February 2018) lists the acceleration of economic growth as one of
the focus areas, and JICA Country Analytical Work for the People’s Republic ofBangladesh (March 2019) found the stable supply of electricity and energy to bea key issue. Accordingly, it is necessary to diversify energy sources in addition toestablishing infrastructure for generating, transmitting, and distributing electricity.
The Project is, therefore, aligned with the policy and analysis. Additionally, interms of realizing energy security in Bangladesh, the Project will contribute to theVer 2021/04

pursuit of economic prosperity under the Japanese government’s vision of a “Freeand Open Indo-Pacific”.
The Project will contribute to the stable supply of electricity as well as thediversification of energy sources in Bangladesh. The Project will also contributeto SDGs 7 (access to energy) and 9 (establishing resilient infrastructure).
In the Fifth Strategic Energy Plan (July 2018), the Japanese government
committed to providing assistance for introducing ultra supercritical or higher
coal-fired power generation facilities if certain requirements are met, only incountries whose only option in terms of energy security and economic efficiency
is to use coal as an energy source; the Project is consistent with the Japanese
government’s assistance policy for coal-fired power generation. Notably, because
the Project is already underway, the Japanese government considers it to beoutside the scope of requirements for coal-fired power generation exports listed
in Infrastructure System Overseas Promotion Strategy 2025 (December 2020).
The following are primary examples of assistance JICA has provided in the
power and energy sector.
・ Japanese ODA Loans: Matarbari Ultra Super Critical Coal-Fired Power
Project (FY2014-FY2019), Dhaka Underground Substation Construction
Project (FY2017), Energy Efficiency and Conservation Promotion Financing
Project (Phase 2) (FY2019)・ Technical Cooperation: Dispatching of Power Sector Advisors (FY2004–
FY2016, FY2019-FY2021), The Project for Gas Network System
Digitalization and Improvement of Operational Efficiency in Gas Sector in
Bangladesh (FY2019-FY2022), The Integrated Energy and Power Master
Plan Project (FY2021-FY2023)
・ Private Sector Investment Finance：Sirajganj Combined Cycle Power Plant
Project (FY 2017, Co-financing projects with IFC), Moheshkhali Floating
Storage and Regasification Unit Operation Project (FY2017, Project
Financing), Meghnaghat Combined Cycle Power Project (FY 2020, Leading
Asia’s Private Infrastructure Fund (LEAP))(3) Other Donors’ Activities
The World Bank is providing support for the following in the Power and Energy
sector of the country: improvement of the core transmission network; provisionof development assistance loans for the power sector; formulation of plans forthe financial reform and restructuring of the power sector; and construction ofgas-fired power plants. The Asian Development Bank is providing support forVer 2021/04

the following: improvement of Bangladesh Power Development Board (BPDB)
management efficiency; establishment of the Bangladesh Energy Regulatory
Commission (BERC); and construction of gas-fired power plants. The AsianInfrastructure Investment Bank is providing support for the development of
power distribution networks and the reinforcement of gas distribution networks.
３．Project Description(1) Project Objective
The objective of the Project is to increase stable power supply and to diversify
energy source in Bangladesh by constructing an ultra super critical coal-fired
power plant in Matarbari area, thereby contributing to nationwide economic
development.
(2) Project Site / Target Area
Matarbari area, Moheshkhali region, Cox's Bazar District, Chattogram
Division(3) Project Components
1) Ultra super critical coal-fired power plant (600 MW × 2 units), port for coaltransport
2) Transmission lines (approx. 94 km of 400 kV transmission lines, electric
power pylons, etc.)
3) Access roads (bridge: approx. 0.8 km; construction of new roads: approx.
7.4 km; repair of existing roads: approx. 5 km; etc.)
4) Electrification of the surrounding areas (132 kV transmission lines: approx.
25 km; 132/33 kV and 33/11 kV substations; and 33/11/6.35/0.4 kV
distribution facilities)5) Consulting services (basic design/detailed design, tender assistance,
construction supervision, organization reinforcement, etc.)(4) Estimated Project Cost
811,048 million Yen (Loan Amount in this tranche: 137,252 million Yen)
(5) Project Implementation Schedule
June 2014–January 2027 (152 months in total). The Project will complete
upon commencement of operation (July 2024).
(6) Project Implementation Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Guarantor: N/A
3) Executing Agency: Coal Power Generation Company Bangladesh Limited(CPGCBL), Power Grid Company of Bangladesh Limited (PGCB), Roads

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and Highways Department (RHD)
4) Operation and Maintenance System: CPGCBL will operate and maintainthe power plant and the port for coal transport, PGCB will operate andmaintain the power transmission lines, and RHD will operate and maintainthe access roads. Additionally, Chittagong Port Authority (CPA) will
operate and maintain the access channel, basin, and breakwaters. The
Bangladesh Water Development Board will be in charge of theembankments that form part of the access roads.
(7) Collaboration and Sharing of Roles with Other Donors
1) Japan’s Activity
A coal-fired power plant to be constructed in the Project will be connectedto the substation (expected to be completed in June 2022) to beconstructed in the Japanese ODA Loan project called the DhakaChittagong Main Power Grid Strengthening Project (FY2015) and will
supply electricity to the Dhaka metropolitan area. After the completion of
the commercial port which is planned to be constructed in the Japanese
ODA Loan project called the Matarbari Port Development Project (I)(FY2019), a part of the port facilities (access channel, basin, andrevetment) to be developed in the Project will be used jointly with thecommercial port. Plans also call for the formulation of a master plan forrealizing a low-carbon/ decarbonized society and achieving sustained
growth through a technical cooperation for development planning titled“Integrated Energy and Power Master Plan Formulation Project” (FY2021–
FY2023).
2) Other Donors’ Activity: N/A(8) Environmental and Social Consideration/Cross-Sectoral Issues/Gender
Category
1) Environmental and Social Consideration① Category: A② Reason for Categorization: The Project falls into the thermal power
sector under the JICA Guidelines for Environmental and Social
Considerations (published in April 2010).
③ Environmental Permit: The Environmental Impact Assessment(hereinafter referred to as “EIA”) Report on the construction andmaintenance of the power plant and port was approved by theVer 2021/04

Department of Environment (hereinafter referred to as “DOE”) in
October 2013, and the EIA Report on the construction andmaintenance of transmission lines and access roads was approved by
DOE in November 2013. The EIA Report on rural electrification (i.e.,
construction of a transmission line network) was approved by the DOE
in October 2015. The need of an additional scope of the construction
and maintenance of the power plant and port, including theconstruction of a breakwater, expansion of the shipping channel, andconstruction of berths, arose later, but an EIA report was prepared aspart of the Matarbari Port Development Project, and it was approvedby the DOE in November 2018. Similarly, although the routes of thepower transmission lines were changed, an EIA report was preparedas part of the Dhaka-Chittagong Main Power Grid Strengthening
Project, and it was approved by the DOE in September 2016.
Additionally, because the routes of the access roads were changed, theEIA for the construction and maintenance of the access roads wasrevised, and then approved by the DOE in January 2016.
④ Anti-Pollution Measures: The Project will incorporate seawater-basedflue gas desulfurization equipment and a low-NOx combustion system,
so it is expected to meet the criteria for both sulfur oxide (SOx) andnitrogen oxide (NOx) exhausts from power stations in accordance withapplicable domestic and international regulations (IFC Environmental,
Health, and Safety Guidelines. Hereinafter referred to as “EHS
Quidelines”). The power station to be constructed in the Project is
expected to meet both national standards and EHS Guidelines foratmospheric concentrations. Furthermore, the estimated (annual)
PM10 concentration level (42.4 to 62.4 µg/m3 ) for the power station’s
emissions exceeded the upper limit of Bangladesh's prescribed range,
but this was the only instance in which the plant missed a threshold.
This most likely reflected the impact of the pre-implementation
concentration level (42 to 62 µg/m3 ) and the Project presumably
contributed an insignificant amount of 0.4 µg/m3 . The effects of PM
will be minimized by adopting a high stack (275 m) and electric dust
collectors. Plans also call for preventing coal dust from scattering bysprinkling water mainly during the dry season once the plant is inservice. Seawater will be used for cooling in the Project, but noVer 2021/04

negative impact on the ecosystem is expected. By controlling thetemperature of the water at discharge to within 7°C above thetemperature at intake, the plant will comply with the national standard(less than 40°C). The noise impact is expected to meet the standard
for Bangladeshi or EHS guidelines during the construction and after thecommencement of service.
⑤ Natural Environment: The target area of the Project is not located in or
around vulnerable areas, such as national parks. Sonadia Island,
designated as an “Ecologically Critical Area” by the Government of
Bangladesh, is located approximately 15 km south of the Project site.
However, no negative impact on Sonadia Island is expected because
the mitigation measures noted in the anti-pollution measures will betaken and the effects of air pollution and water contamination willremain limited. To avoid any harm to the breeding of sea turtles,
necessary measures has been taken during their breeding andhatching season, including dimming the intensity of light sources
illuminated on the sea surface or the surrounding area during
construction and limiting noise and vibration. Project workers has beenbunned from gathering, harvesting, or hunting spoon-billed sandpipers
and other rare species, or their eggs. In addition, the additional
environmental impact on the expansion of the access channel andbasin, joint work with the port project, is assumed to be the impact ofdredged soil discharged to the sea, but the impact on the surrounding
environment will be minor, because mitigation measures will be taken
to minimize the impact on benthic organisms, fish, and other organisms.
For example, the diffusion of pollution will be minimized by selecting a
sea area with a sufficient distance and depth from offshore as a
candidate site for ocean disposal, installation of a pollution diffusion
prevention film, and other measures.
⑥ Social Environment: The size of land acquisition for construction of thepower plant and port is approximately 709 ha; a portion of the area wasused as a salt field during the dry season and for shrimp cultivation
during the rainy season. The construction and maintenance of thepower plant and port required the resettlement of non-title holders (44households); payment of compensation to eligible households iscomplete. A total of 2,300 residents were affected, although

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compensation has not yet been paid to some of them, the executing
agency has been continuing activities (e.g. holding meetings, visiting
individual residences) toward completing the payments. Additionally,
the construction of new access roads and repairs to existing accessroads required roughly 41 ha; land acquisition was required forroughly 11 ha of that area. The land acquisition required theresettlement of 580 residents from 102 households (including non-title
holders). Although compensation has not yet been paid to all affected
residents (including resettled residents), procedures for landacquisition, compensation, and assistance are proceeding according
to domestic procedures in Bangladesh and the Resettlement Action
Plan (RAP) prepared in line with JICA Guidelines for Environmental
and Social Considerations. Land owned by the executing agency andgovernment is being used to construct power transmission lines andelectrifying communities in the vicinity; consequently, neither landacquisition nor resident resettlement is required. The payment ofcompensation to affected residents is essentially complete, andprocedures are proceeding according to domestic procedures in
Bangladesh and the RAP prepared in line with JICA Guidelines forEnvironmental and Social Considerations. Notably, discussions withlocal stakeholders have been held according to the RAP.
⑦ Other / Monitoring: For the resettlement of residents and livelihood
restoration, the executing agency will conduct internal monitoring andthird-party institutions will conduct external monitoring. With regard to
the environment, the executing agency and the contractor has beenmonitoring the air quality, water quality, noise levels, vibrations andecosystem during construction. After the commencement of service,
the executing agency will continue monitoring these factors.
2) Cross-Cutting Issues: CPGCBL and the Contractor have and will continue
to implement specific measures to prevent COVID-19 infections, including
rigorously conducting PCR testing, constructing lodging facilities on the
Project site to minimize relevant people’s travel into and out of the site,and performing health checks at site entrances.
3) Category of Gender [N/A]: GI (Gender Mainstreaming Needs Assessment
and Analysis Project)
Description of Activities/Reason for Categorization: Although gender

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mainstreaming needs were investigated and confirmed under the Project,
it did not lead to the implementation of specific efforts to contribute togender equality or empowerment of women. Gender-segregatedinterviews and gender-balanced stakeholder meetings have been
conducted with regard to environmental and social considerations during
the preparatory survey.
(9) Other Important Issues: N/A
４. Targeted Outcomes(1) Quantitative Effects
Outcomes (Operation and Effect Indicators)
Target (2026)

Baseline
Indicator(Actual value in
2013)

Power
Plant

(Expected value 2
years after projectcompletion)

Net electric energy production(GWh/year)

N/A

7,865

Utilization ratio(%)

N/A

80

Operation rate (%)

N/A

85

Auxiliary power ratio (%)

N/A

6.48

Gross thermal efficiency (%)

N/A

41.11

N/A

0

N/A

218

N/A

1,096

N/A

10

N/A

1,863

N/A

0.4

N/A

60

N/A

4,000

Human errors (hours/year)
Mechanical troubles
Unit(hours/year)
downtime*
Regular inspections(hours/year)
Frequency of suspension of operations(times/year)*
Fuel Consumption (1000 tons/year)*Transmission
Transmission loss rate(%)
Lines
Ports
Berth occupancy rate (%)
andHarbors Total cargo volume (1000 tons/year)* Per unit

(2) Qualitative Effects
Diversification of energy sources and stabilization of electricity supply throughthe strengthening of supply capacity(3) Internal Rate of Return
According to the following preconditions, this project’s Economic Internal Rate

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of Return (EIRR) will be 13.7%. The Financial Internal Rate of Return (FIRR)
will be 1.6% for power generation, port and harbor, and road construction and9.7% for power transmission.
【EIRR】
Cost: Project costs, fuel costs, and maintenance/operation costs (excludingtax)
Benefit: The difference between electricity generated by the Project (withcase) and the costs of electricity purchased from private power producers(without case) (including maintenance costs)
Project Life: 36 years【FIRR】(Power generation, port and harbor, and road construction)
Cost: Project costs (for the construction of a power plant, port, harbor, androads), fuel costs, and maintenance/operation costs
Benefit: Sales revenue for electric power (PPA)
Project Life: 36 years(Power transmission)
Cost：Project costs (for transmission lines), maintenance/operation costs
Benefit：Revenue from transmission charges
Project Life：34 years
５. External Factors and Risk Control(1) Preconditions: Conclusion of procurement agreements for the imported coalneeded to operate the power plant.
(2) External Factors: N/A
６. Lessons Learned from Past Projects
The results of the ex-post evaluation of the Mombasa Diesel Generating Power
Plant Project (evaluated in 2005) in the Republic of Kenya demonstrates thatappropriate support from the manufacturers enhances the sustainability of power
plant projects. For the Project, a maintenance and operation system will be built
and established by means of a technology transfer for operation and maintenancemanagement through consulting services and a Long Term Service Agreementwith the manufacturers. Additionally, efforts will be made under the Project tostrengthen the management system of the executing agency with organizational
strengthening consultants employed separately.
７. Evaluation Results
Under the Project, a highly efficient coal-fired power plant that runs on imported

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coal will be constructed to contribute to the diversification of energy sources andexpand the capacity of Bangladesh to supply electricity in response to rapidly
increasing demand for electricity; therefore, the Project is consistent with
Bangladesh’s development issues and policies and with the assistance policies
and the analysis of the Government of Japan and JICA. The project will also
contribute to Goal 7 (“Ensure access to affordable, reliable, sustainable andmodern energy for all”) and Goal 9 (“Build resilient infrastructure, promote
inclusive and sustainable industrialization and foster innovation”) of SDGs. Thus,
the necessity for JICA to support the Project is substantial.
８. Plan for Future Evaluation(1) Indicators to be Used
As indicated in Sections 4.
(2) Future Evaluation Schedule
Ex-post evaluation: Two years after the project completion
END