Ex-Ante Project Evaluation (for Japanese ODA Loan)
1. Name of the ProjectCountry: The People's Republic of Bangladesh
Project: Matarbari Ultra Super Critical Coal-Fired Power Project (II)Loan Agreement: June 29, 2016
Loan Amount: 37,821 million Yen
Borrower: The Government of the People’s Republic of Bangladesh
2. Background and Necessity of the Project(1) Current State and Issues of the Power Sector in Bangladesh
In the People’s Republic of Bangladesh, electric power supply is not keeping up with its
increasing demand because of the industrialization and the rapidly growing economy of recent
years. As of 2015, the potential demand is 9,000 MW, however, the actual performance of
maximum power supply is 8,177 MW (Bangladesh Power Development Board: BPDP),
leaving the supply capacity being 90 % of its demand.
Whereas the power demand is estimated to increase at 9.3 % per annum over the next
decade, the output of domestic natural gas shall decline with 2016 as its peak. The gas-fired
power plants, which account for approximately 60 % of the total capacity of electric power
facilities, depend on the domestic natural gas as its energy source. Therefore, it is a pressing
task to increase the power supply as well as diversify the energy sources.
(2) Development Policies for the Power Sector in Bangladesh and the Priority of the Project
In The Seventh Five Year Plan (FY 2016/17 - 2020/21), which is regarded as the top-ranked
plan of the national development strategy, the power sector is positioned as one of the mostimportant sectors in the country which is aiming to attain middle income country status by
2021. Also, Power System Master Plan 2010 stated that coal is the most important primaryenergy, and to use the imported coal as the base power source for the electric demand which isgoing to be nearly 34,000 MW by 2030. The plan counts the construction of high-efficacy
ultra super critical coal-fired power plants as a hot issue.
Matarbari Ultra Super Critical Coal-Fired Power Project (hereinafter referred to as “theProject”) is one of the highly-prioritized projects under the direct supervision of the Prime
Minister as an infrastructure-improvement project to meet the rapidly increasing power
demand in the country as well as to diversify energy sources.
(3) Japan and JICA’s Policy and Operations in the Power Sector
The acceleration of the economic growth is raised as one of the priority fields in theCountry Assistance Policy for Bangladesh (June 2012), and the shortage of power isconsidered to be the biggest bottle neck of the economic development. Also, JICA Country
Analysis Paper for Bangladesh (April 2013) analyzes that “stable power supply” is a task to bedone with priority, and the Project corresponds these policies and analyses. JICA provided an
ODA loan in FY 2014 for the phase 1 of this project. Other major assistances provided in thepower-sector thus far are as follows.
 ODA loan: New Haripur Power Plant Development Project (FY 2007, FY
2008), Bheramara Combined Cycle Power Plant Development Project (FY 2010, FY
2013), National Power Transmission Network Development Project (FY 2013),
Renewable Energy Development Project (FY 2013) etc.
 Technical Cooperation: Dispatch of Power Sector Adviser (FY 2004 - present),
Strengthening Management and Performance Standards in Power Sector of Bangladesh
through Promotion of TQM (FY 2006-2009), Master Plan Study on Coal Power
Development in Bangladesh (FY 2009-2010) etc.
(4) Other Donors’ Activity
The World Bank is providing supports for; the improvement of core transmission network,
the development assistance loans for power sector, the formulation of the plans for financial
reform and restructuring of power sector, and the construction of gas-fired power plants etc.
The Asian Development Bank is providing supports for; the improvement of management
efficiency of BPDP, the establishment of Bangladesh Energy Regulatory Commission (BERC),
and the construction of gas-fired power plants.
(5) Necessity of the Project
Providing supports to this Project corresponds to the policy and analysis of the Governmentof Japan and JICA. Also, the Government of Bangladesh is placing emphasis on theimportance of construction of high-efficiency coal-fired power plants, where imported coals
are utilized, as a measure to provide stable power supply that can cope with the rapidly
increasing power demand as well as the needs for the diversification of energy sources. Thus,
necessity of JICA to assist the Project is high.
3. Project Description(1) Project Objective
The objective of the Project is to meet the increasing electricity demand and mitigating
greenhouse gas emissions by constructing an ultra super critical coal-fired power plant (rated
output: 1,200 MW (600 MW × 2)) in Matarbari area, Chittagong Division in southeastern
Bangladesh, thereby contributing to the revitalization of the nationwide economic
development and mitigation of climate change.
(2) Project Site / Target Area
Cox’s Bazar District and Chittagong District in Chittagong Division(3) Project Componentsa) Ultra Super Critical Coal-Fired Power Plant (600MW x 2)
Port and harbor to unload coals (Maximum water depth of approximately 18.5m)b) Transmission lines (approximately 92km with 400kV, towers etc.)c) Access roads (bridge: approximately 640m, construction of new roads:
approximately 10km maintenance and repair of existing roads: approximately 33km etc.)d) Electrification of the surrounding areas (Transmission line of 132 kV: approximately

25km, Substation with 132/33kV and 33/11kV, Distribution facilities with 33/11/6.35/
0.4kV)e)
Procurement of equipment and materials (Large-sized vehicles, measuring
instruments, equipment for disaster prevention etc.)f)Consulting services (detailed design, tender assistance, construction supervision etc.)(4) Estimated Project Cost (Loan Amount)
706,705 million Yen (Loan Amount: 569,660 million Yen / Loan Amount in this phase:
37,821 million Yen)
(5) Schedule
June 2014 - September 2028 (172 months in total). The Project will be completed when theservice of the facilities commences (June 2024).
(6) Project Implementation Structure1) Borrower: The Government of the People’s Republic of Bangladesh
2) Executing Agencies: Coal Power Generation Company Bangladesh Limited (CPGCBL),Power Grid Company of Bangladesh Limited (PGCB), Roads and Highways Department(RHD)3) Operation and Maintenance System: CPGCBL, PGCB and RHD will carry out theoperation and maintenance of this project, and also Bangladesh Water Development Board(BWDB) will be in charge of the dikes which form a part of access roads.
(7) Environmental and Social Consideration / Poverty Reduction / Social Development
1) Environmental and Social Consideration① Category: A② Reason for Categorization
This Project applies to the sector of thermal power plant stated in the Japan International
Cooperation Agency (JICA) Guidelines for Environmental and Social Considerations(April 2010).
③ Environmental Permit
The Environmental Impact Assessment (hereinafter, referred to as “EIA”) regarding theconstruction/maintenance of the power plant, port and harbor was approved by Departmentof Environment (hereinafter called “DOE”) in October 2013, and the EIA for theconstruction/maintenance of transmission lines and access roads was approved in
November of the same year. As concerns the routes of transmission lines which werechanged afterward, the EIA report for “Dhaka-Chittagong Main Power Grid Strengthening
Project” covers them and this EIA is anticipated to be approved by DOE in August 2016.
As for the construction of access roads (approximately 6.5 km) newly added to the project
scope by the appraisal of this phase, a new EIA report was prepared and approved by DOE
in January 2016. The EIA for the electrification of the surrounding areas (the constructionof transmission line network) was approved by DOE in October 2015. Although the scaleof dredging is becoming larger in the project of port and harbor as the plans of sea routechange, neither amendment nor addition to the EIA are required according to the domestic

legislation in Bangladesh.
④ Anti-Pollution Measures
By adopting the flue-gas desulfurization (FGD) equipment with seawater process andthe low nitrogen oxide (NOx) combustion method, both sulfur oxide (SOx) and NOx
within the exhaust gas emitted from the power plant of this Project are expected to meetthe Bangladeshi and international standard (The Environmental, Health, and Safety (EHS)
Guidelines by International Finance Corporation (IFC)). Likewise, concentration of SOx
and NOx in the atmosphere is expected to meet the Bangladeshi and EHS standard as well.
As for the dust (Particle Pollution: PM), it will meet the standard of EHS guidelines,
however, the estimated upper value of the PM 10 concentration (42.4 - 62.4μg/m3, annual
value) resulted to be the only value that exceeds the standard of Bangladesh. This isthought to be because of the concentration before the implementation of this Project (42 62μg/m3), and the influence of this Project itself is estimated to be merely 0.4μg/m3. The
influence of PM shall be minimized by adopting a high stack (275m) and an electric dust
collector. Seawater is used as cooling water in this Project, however the impact on theecosystem is not foreseen because the standard of Bangladesh for the industrial wastewater(below 40℃) shall be strictly obeyed, keeping the elevation of water temperature within
7℃ at the time of discharge compared to the time of intake. The noise impacts will not
exceed the standard of both Bangladeshi and EHS guidelines during the construction as
well as after the commencement of service. The dredged soil is anticipated to increase as
the plans of sea route change, but a part of the dredged soil shall be used as embankment
after the treatment of the cementitious, and the rest of the soil shall be appropriately treatedin the designated muck disposal sites.
⑤ Natural Environment
The target area of this Project is not in or around the area, such as national parks,
subject to be influenced by the Project. Sonadia Island, designated as “Ecologically CriticalArea” by the Government of Bangladesh, is located approximately 15 km south of the
project site. The impact on Sonadia Island, however, is not foreseen because theenvironmental mitigation policy, written in the measure against pollution, has been
implemented and air pollution and water contamination will remain limited. Since thecreatures in the ocean often move and migrate, in case scarce species are witnessed somemeasures shall be taken such as reducing the noise and vibration as well as adjusting thebrightness of the light which will be cast on the surface of the ocean and the surrounding
areas associated with the construction works. Also, the workers are forbidden to collect,
capture or hunt scarce species and their eggs.
⑥ Social Environment
The size of the land that is to be acquired for the power plant / port and harbor isapproximately 475 ha, and these areas are used as salt fields in the dry season and as
shrimp farms in the rainy season. In addition to the 20 households (16 out of 20 are illegal
residents) who need to move because of the power plant / port and harbor, 2,031 people arethe target of this land acquisition and it is verified that it will affect 1,102 people’s sourceof income (the number of people to be affected remains the same since the time of the firstphase appraisal of the Project). The land acquisition for the construction andmaintenance/repair of access roads is to be 35.71 ha (23.86 ha out of this was added after
the first phase appraisal of the Project due to widen the existing roads) and this involves
resettlement of approximately 20 unofficial residents. There will be no land acquisition
needed for the construction of transmission lines as well as the electrification ofsurrounding areas since the properties owned by either implementing agencies or thegovernment will be used (At the time of the first phase appraisal of the Project, landacquisition of 0.13 ha was planned in order to build a substation, however, this acquisition
became no longer necessary as the construction of this substation turned to be exemptedfrom this Project). The transmission lines came to be connected to the substation
constructed in the Dhaka-Chittagong Main Power Grid Strengthening Project. As concerns
the compensation for the land acquisition/resettlement of residents/loss on assets and thecost of living, procedures are going forward in the component of power plant / port andharbor based on the JICA Guidelines for Environmental and Social Considerations alongwith the domestic procedures of Bangladesh and the Resettlement Action Plan (RAP). For
the access road, which requires land acquisition as well as residents resettlement in thesecond phase of this Project, a revised RAP shall be prepared at the stage of making
detailed design. When the meetings were held with local stakeholders for each projectcomponent when preparing the EIA report and RAP (at the time of the first phaseappraisal); no opposing opinions was raised on this Project, yet some requests were madefor the proper environmental management and the infrastructure development in thesurrounding areas. The implementing agencies responded that they shall take the proper
measures to the opinions and requests, and the understanding of the attendees was obtained.
The meeting with local stakeholders concerning the access road is to be held after therevised RAP is prepared.
⑦ Other / Monitoring
As for the resettlement of the residents, internal monitoring will be carried out by the
implementing agency, and external monitoring by the third-party. As for the environment,
the implementing agency and the contractor will monitor the air, water quality and noises
during the construction. After the commencement of the service, the implementing agency
will keep monitoring them.
2) Promotion of Poverty Reduction① Electrification of the surrounding areas
Improve the electric facilities in the surrounding areas of the power plant, andimplement the electrification of the 4,000 households in Matarbari/Dalgata areas.
② Improvement of the basic infrastructure for the workers
The improvement of the basic infrastructure for daily life is going to be carried out withthe fund of the Government of Bangladesh for the workers involved in this Project. The

public facilities which will be built as a part of this infrastructure improvement, such as
hospitals and schools, can also be used by the local residents of these areas.
③ Budget allocation in proportion as power generation amountThe Matarbari power plant is in the target area of the Social Development Fund whose
establishment was approved by the Government of Bangladesh in November 2012, and0.03 Taka per 1kWh of electricity sales shall be saved into the above-mentioned fund. The
budget shall be allocated from this fund to the administrative bodies in the Matarbari area,
and this budget is allowed to be used only for the purposes that contribute to theimprovement of living environment.
3) Promotion of Social Development
Measures against HIV/AIDS shall be taken by the implementing agency as well as thecontractor for the workers employed during the construction period as a part of the
package for the construction of the power plant/port and harbor, transmission lines and theaccess roads of this Project. Also, male and female interview, gender-balanced stakeholder
meetings have been conducted on environmental and social consideration during the
preparatory survey. Therefore, it is categorized as gender mainstreaming needs assessment
and analyses project.
(8) Other Important Issues: N/A
4. Target Outcomes(1) Quantitative Effects
1) Performance Indicators (Operation and Effect Indicator)
Indicators[Operation Indicators]
Power Plant
Maximum output
Utilization ratio
Operation rate
Auxiliary power ratio
Gross thermal efficiency
Unit
downtime(*)

Human errors
Mechanical troubles
Regular Inspections

Suspension frequency of the unit
operation(*)
Transmission Lines
Transmission loss rate
Ports and Harbors
Berth operation rate
Total cargo volume
Volume of dredged soil
[Operation and Effect Indicators]
Net electric energy production
CO2 emission(*)
NOX emission(*)
SOX emission(*)

Unit

Target (2026)[Effective value 2
years after projectcompletion]

MW
%
%
%
%
hours / year
hours / year
hours / year
times / year

1,200
80
85
6.48
41.29
0
218
1,096
10

%

0.4

%
1,000 tons / year
Cubic meter / year

60
4,000
360,000

GWh / year
1,000 tons / year
1,000 tons / year
1,000 tons / year

7,865
3,416
6.1
10.9

Dust emission(*)
Fuel consumption(*)(*) Per Unit

1,000 tons / year
1,000 tons / year

0.7
1,863

2) Internal Rate of Return
Based on the conditions stated below, the Economic Internal Rate of Return (EIRR) was
calculated as 14.84%. As for the Financial Internal Rate of Return (FIRR), the componentof generation turned to be 2.07% and the component of transmission turned to be
12.88%*.
EIRR:
Cost: Project cost (excluding tax), Fuel cost, Maintenance and operation cost
Benefit: Difference with the electricity generated with oil
Project Life: 25 years
FIRR:(Component of Generation)
Cost: Project cost, Fuel cost, Maintenance and operation cost, Tax, Discount rate
Benefit: Sales revenue of electric power (PPA: Power Purchase Agreement)
Project Life: 25 years(Component of Transmission)*
Cost: Project cost, Fuel cost, Maintenance and operation cost, Tax, Discount rate
Benefit: Power transmission fees, Residual value at the end of project life
Project Life: 25 years* In the Dhaka-Chittagong Main Power Grid Strengthening Project, the FIRR of thewhole Dhaka-Matarbari transmission project is calculated including the components of
the Project.
(2) Qualitative Effects
Revitalization of the nationwide economic development and mitigation of climate change
5. External Factors and Risk Control
N/A
6. Lessons Learned from Past Projects(1) Lessons Learned from Past Projects
The ex-post evaluation of Mombasa Diesel Generating Power Plant Project in Kenya
demonstrates that appropriate supports from the manufacturers enhance the sustainability of
power plants projects.
(2) Application of Lessons Learned to the Project
As this is the first technology, which is introduced to Bangladesh, this Project aims tobuild and establish the maintenance and operation system with the technology transfer
through consulting services and the Long Term Service Agreement by manufacturers. Also the
management system of the implementing agency shall be strengthened by theorganization-reinforcement consultant that is to be employed in this Project.

7. Plan for Future Evaluation(1) Indicators to be Used
1) Maximum output (MW/ year), Utilization ratio (%), Operation rate (%), Auxiliary power
ratio (%), Gross thermal efficiency (%), Unit downtime (human errors, mechanicaltroubles, regular inspections) (hours/ year), Suspension frequency of the unit operation(times / year), Transmission loss (%), Fuel consumption (1,000 tons / year), CO2 emission(1,000 tons / year), Transmission loss rate (%), Berth operation rate (%), Total cargovolume (1,000 tons / year ), Volume of dredged soil (cubic meter/ year), Net electric energy
production (GWh/ year), CO2 emission (1,000 tons / year ), NOX emission (1,000 tons /year ), SOX emission (1,000 tons / year ), Dust emission (1,000 tons / year ), Fuelconsumption (1,000 tons / year)2) Economic Internal Rate of Return: EIRR (%), Financial Internal Rate of Return: FIRR(%)
(2) Timing: Two years after the completion of the Project