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Oct 12, 20237 min read

Matarbari 1200 MW (CPGCBL) Coal Power Plant (Phase 1)

Current Status: Construction

Source: (BWGED,2018)


Matarbari 1200 MW Coal Power Plant, also known as Matarbari USC Thermal Power Station, is an Ultra-supercritical (USC) thermal power plant situated in Matarbari and Dhalghata Union on Matarbari Island under Maheshkhali Upazila in Cox’s Bazar District of Bangladesh (Location: 21.7032, 91.8795). It is sponsored by Coal Power Generation Company Bangladesh Limited (CPGCBL), a subsidiary of Bangladesh Power Development Board (BPDB), as a publicly owned Independent Power Producer (IPP) for 25 years. According to the latest schedule, the Commercial Operation Date (COD) of the power plant is 26 July 2024 for the 1st unit and 26 July 2024 for the 2nd unit respectively and the retirement date is July 2049.


Capacity

The installed and net capacity of Matarbari Phase-I Coal Power Plant is 1200 MW and 1104 MW respectively.


Context

In Matarbari, Cox's Bazar, Chittagong, Bangladesh, a 1200-megawatt (MW) coal-fired power plant is being constructed. It is a component of the larger Maheshkhali power complex plan, which also comprises a number of proposed coal and gas-fired power stations. The Bangladesh Power Development Board (BPDB) is putting together a sizable multi-plant complex that includes the Matarbari power station. The BPDB announced in August 2013 that it intends to build a multi-plant power complex at Cox's Bazar that would include both combined cycle gas-fired and coal-fired units. The BPDB intends to build a 6000 MW Ultra Supercritical Coal-Based Thermal Power Plant and a 3000 MW LNG Based Combined Cycle Power Plant at Maheshkhali Upazila in Cox's Bazar District in different phases (Bangladesh National Portal, 2023).


The construction of a 1200 MW coal-fired plant at Matarbari on Maheshkhali Island in Cox's Bazar was to be funded by a $4.53 billion loan, according to an agreement with the Japanese donor organization Japan International Cooperation Agency (JICA), it was reported in March 2014 (The Financial Express, 2013). The JICA feasibility study was about to begin construction in 2017, according to a Daily Star report on the study. BPDB signed a PPA with CPGCBL on 27 July 2017 with CPGCBL to supply 1,200 MW (derated capacity) although the derated capacity is 1,104 MW as per the Revisited Power System Master Plan 2016 (BWGED).


As per the project's implementation schedule, the government needs to sign a loan agreement by late March and then appoint a consultant. However, due to the volatile political situation during the implementation time, progress to this end has been stalled. Officials at this point are not sure about when the loan agreement could be signed and with whom. The schedule also said that the basic design, bid documents preparation, and floating of the tender for prequalifying power companies for this project would be done within 2015 and the contract would be awarded in 2016 so that a 52-month construction could begin in 2017 (The Daily Star, 2014). The project received approval in January 2015 as one of the "Fast-Track Projects" designated by the government based on priorities.


It was announced in November 2016 that the deadline for Marubeni Corporation and Sumitomo Corporation's construction bid would be extended to 2017. For the US $4.5 billion coal project, Marubeni and a Toshiba-Sumitomo group submitted technical and financial bids in January 2017 (Daily Observer, 2017). It was stated in May 2017 that the bids had been examined, the contract was anticipated to be granted by June 2017 (Dhaka Tribune, 2017), and the physical work was anticipated to be completed by July 2017. It was reported in June 2017 that Marubeni had been turned down because the terms of its financial offer were supposedly unsatisfactory. Sumitomo Corporation was suggested by the project's technical evaluation committee (TEC) as the qualified bidder.


Within two months, a pre-contractual agreement with Sumitomo was anticipated to be completed. It was announced in July 2017 that Sumitomo Corporation's construction will start in August and go into operation in 2024. The Matarbari Port would also be built by Sumitomo (Nikkei Asian Review, 2017). A Japanese consortium made up of Sumitomo Corporation, Toshiba Corporation, and IHI Corporation was said to have signed an engineering, procurement, and construction (EPC) contract for the 1,200 MW coal-fired power station in September 2017. According to reports, it was in the construction phase and would be finished in July 2024 (Daily Star,2018). The power plant's primary construction was slated to begin in 2020. The ground had to be lifted 10 meters above mean sea level in order to develop the project. 70% of the land development and channel excavation were said to be finished in April 2019 (GEM,2023).


Land Acquisition

The Coal Power Generation Company Bangladesh Limited (CPGCBL) is implementing the project on a 1.68-acre area that accommodates the power project and a deep sea port.


Sponsor

The power plant is proposed by Coal Power Generation Company Bangladesh Limited (CPGCBL) and sponsored by Japan International Cooperation Agency (JICA) 62% and BPDB 38% (BWGED).


Finance

Coal Power Generation Company Bangladesh Limited (CPGCBL), a state-owned company in Bangladesh, Sumitomo Corporation, IHI Corporation, and Toshiba are all working together to create the first phase of the Matarbari coal-power plant, which would cost a staggering US$ 4.51 billion. SMBC is serving as the project's financial advisor. As part of its official development assistance loan to Bangladesh, JICA has already contributed $1.48 billion to the construction of the power plant and the nearby infrastructure for importing coal. To finish the project, JICA plans to invest an additional US$1.33 billion. For this project, export credit insurance protection is offered by Nippon Export and Investment Insurance (NEXI) (Market Forces,2022).


JICA is providing USD 2.239 Billion and USD 0.81 Billion is contributed by the Bangladesh Government. Of the expected cost of roughly Tk 35,984 crore, Japan will arrange Tk 28,939 crore (The Daily Star,2023). The Bangladesh government will pay for the remainder. A total of Tk 51,854.88 crore has been calculated as the cost which includes the deep sea port building cost, which is Tk 20,000 crore. The initial estimate for the main project's cost was Tk 35,984.45 crore. But later on, the project's cost rose (Dhaka Tribune,2022).


Contractors

EPC contractors of this power plant are the Sumitomo-Toshiba-IHI Joint Venture Company (STIJVC) (Sumitomo 2017). The environmental impact analysis for the power plant was created by Tokyo Electric Power Services and JICA Analysis Team. The engineering, procurement, and construction contract for the project was given to a group composed of Sumitomo, Toshiba, and IHI in August 2017. For the development of the port, the provision of other plant equipment, and related civil work, Sumitomo subcontracted Toshiba Plant Systems and Services; meanwhile, Penta-Ocean development received a $1.54 billion subcontract for the Matarbari port's construction work. IHI will provide the boilers, while Toshiba will offer the steam turbines and generators for the power plant. The $840 million civil engineering project was given to the Korean firm Posco E&C by Sumitomo. The Steam Turbine Supplier is TPSC (Toshiba Plant Systems & Services Corporation) (GEM,2023).


Fuel Supply

The power plant is expected to require 3.73 million tonnes (Mt) of coal a year, which will be imported from Indonesia, Australia, and South Africa through the Matarbari Port (NS Energy).


Power Generation

The plant is expected to account for 10% of the total generation capacity of Bangladesh. The power generation capacity of the power plant is 1.2 GW (NS Energy).


Environment

The Matarbari Power Plant's Phase I is halfway done, but both national and international organizations have criticized its Environmental Impact Assessment (EIA) for lacking clarity, especially regarding pollution. The government-owned company Coal Power Generation Company (CPGC), admitted flaws in the EIA. The assessment for Cox's Bazar area did not meet international standards, lacking proper air quality monitoring and only collecting data over two days, making it inadequate. Key pollutants like Particulate Matter (PM) 2.5 were ignored, raising concerns about its accuracy. Ironically, the EIA did not consider the mercury and PM 2.5 emissions the plant will produce (The Daily Star,2023). A Japanese business by the name of TEPSCO worked with the JICA Study Team to complete the Environmental Impact Assessment (EIA) Report for the Matarbari Coal Power Plant. High chances of a conflict of interest exist during the EIA process. Given that the JICA Study Team worked closely with TEPSCO and gave them credit in the report, it is very likely that the study is biased in JICA's favor (BWGED,2018). Ultra-supercritical technology would be used in the plant. It would release cooling water into the ocean "at an ambient temperature." There would be "elaborate air and water pollution control arrangements." The research stated that the plant would offer "full electrification of the local community" (GEM,2023).


Criticism

Matarbari Phase 1 construction in Bangladesh has caused waterlogging, displacement, and loss of traditional livelihoods, while Japan's coal plant financing is criticized for double standards (The Daily Star,2019; Market Forces,2022; GEM,2023). Experts question the excessive land acquisition and high costs, given Bangladesh's surplus power capacity (New Age,2023). Public participation in the Matarbari Coal Power Plant project in Bangladesh has been limited, with claims of comments being excluded from meeting minutes and threats against opposition. Concerns exist regarding ash pollution and its potential impact on the environment, especially in cyclone and flood-prone areas. The project's proximity to an ecologically critical area raises additional environmental concerns. Furthermore, there is a lack of transparency and information disclosure about the project's implementation, budget, and evaluation process from both JICA and the Bangladesh Government (BWGED,2018).

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