Matarbari power station

From Global Energy Monitor

Matarbari power station is an operating power station of at least 600-megawatts (MW) in Maheshkhali, Cox's Bazar, Chittagong, Bangladesh with multiple units, some of which are not currently operating.

Location

Table 1: Project-level location details

Plant name Location Coordinates (WGS 84)
Matarbari power station Maheshkhali, Cox's Bazar, Chittagong, Bangladesh 21.70184, 91.8834 (exact)

The map below shows the exact location of the power station.

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Unit-level coordinates (WGS 84):

  • 1, Phase I Unit 1, Phase I Unit 2, Phase II Unit 1, Phase II Unit 2: 21.70184, 91.8834

Project Details

Table 2: Unit-level details

Unit name Status Fuel(s) Capacity (MW) Technology CHP Start year
1 Shelved inferred June 2024) fossil gas: LNG[1][2][3] 1200[1][2][3] unknown not found
Phase I Unit 1 Operating[4] coal: subbituminous 600 ultra-supercritical 2023[4]
Phase I Unit 2 Construction coal: subbituminous 600 ultra-supercritical 2024 (planned)[5]
Phase II Unit 1 Announced[6] coal: subbituminous 600 ultra-supercritical 2028
Phase II Unit 2 Announced[6] coal: subbituminous 600 ultra-supercritical 2028

CHP is an abbreviation for Combined Heat and Power. It is a technology that produces electricity and thermal energy at high efficiencies. Coal units track this information in the Captive Use section when known.

Table 3: Unit-level ownership and operator details

Unit name Owner Parent
1 [100.0%]
Phase I Unit 1 Coal Power Generation Company Bangladesh Ltd [100%] Coal Power Generation Company Bangladesh Ltd [100.0%]
Phase I Unit 2 Coal Power Generation Company Bangladesh Ltd [100%] Coal Power Generation Company Bangladesh Ltd [100.0%]
Phase II Unit 1 Coal Power Generation Company Bangladesh Ltd [100%] Coal Power Generation Company Bangladesh Ltd [100.0%]
Phase II Unit 2 Coal Power Generation Company Bangladesh Ltd [100%] Coal Power Generation Company Bangladesh Ltd [100.0%]

Project-level coal details

  • Coal source(s): imported

Background & Phase I progress

Project proposed

It was reported in March 2014 that "Coal Power Generation Company Bangladesh (CPGCB) would get a $4.53 billion loan according to an agreement with Japanese donor agency Japan International Cooperation Agency (JICA) for the construction of a 1200MW coal-fired plant at Matarbari on Maheshkhali Island in Cox's Bazar."[7][8]

In February 2014, the Daily Star described the approximately $4 billion price-tag of the Matarbari project as "staggering." The paper reported that a feasibility study had been conducted for the project by Japan International Cooperation Agency (JICA) and Tokyo Electric Power (TEPC). According to the study, the cost was far higher than the 1320 MW Rampal power station, which would cost at least $1.5 billion. The reason for the high price of the Matarbari project was the additional components: river dredging, transmission, land acquisition (Tk350 crore), and a port on Sonadia Island capable of receiving and unloading large ships. Power would cost nearly Tk 7 per kilowatt hour when the plant would go into operation in 2023.[9]

According to the Daily Star's report on the Jica/TEPCO feasibility study, the project would begin construction in 2017. The site has six threatened species, including one bird and five reptiles. The plant would use ultra-supercritical technology. Its cooling water would be discharged into the sea "at an ambient temperature." It would have "elaborate air and water pollution control arrangements." The study promised that the plant would provide "full electrification of the local community."[9]

The Daily Star reported the implementation process as follows:[9]

As per the project's implementation schedule, the government needs to sign a loan agreement by late March and then appoint a consultant. But due to the volatile political situation since late last year, 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 says that the basic design, bid documents preparation and floating of the tender for prequalifying power companies for this project would be done within next year and the contract would be awarded in 2016 so that a 52-month construction could begin in 2017.

However, in August 2014 the Planning Minister Mustafa Kamal announced that the Executive Committee of the National Economic Council (Ecnec) had approved the project and that the Japan International Cooperation Agency (JICA) funding for the project was US$3.8 billion as a "soft loan." The Minister stated that he hoped that the first 600MW unit of the plant would be commissioned in 2018.[10]

2015: "Fast-Track Projects" approval

In January 2015, the project was approved as part of the government's priority-based "Fast-Track Projects".[11]

According to a February 2016 report, construction was expected to begin in late 2016, with Sumitomo Corporation and Marubeni Corporation shortlisted to build the plant. The amount of the loan was US$3.7 billion, with an interest rate of 0.1 percent over 30 years after an initial 10-year grace period. The thermal efficiency of the plant was estimated at 41.3 percent.[12]

Bidding

In November 2016, it was reported bidding between Marubeni Corporation and Sumitomo Corporation on constructing the plant would be extended to 2017.[13]

In January 2017, Marubeni and a consortium of Toshiba-Sumitomo submitted technical and financial bids for the US$4.5 billion coal project.[14] In May 2017 it was reported that the bids had been evaluated and the contract was expected to be awarded by June 2017 and physical works by July 2017.[15][16]

In June 2017, it was reported that Marubeni had been rejected as its financial offer was allegedly not satisfactory. The technical evaluation committee (TEC) of the project recommended Sumitomo Corporation as the eligible bidder. A pre-contract negotiation with Sumitomo was supposed to be finalised within two months.[17]

In July 2017, it was reported construction by Sumitomo Corporation would begin in August 2017, with operation planned for 2024. Sumitomo would also build the Matarbari Port.[18]

EPC signed, development begins

In September 2017, it was reported that a Japanese consortium comprising Sumitomo Corporation, Toshiba Corporation, and IHI Corporation signed an engineering, procurement and construction (EPC) contract for the 1,200 MW coal-fired power plant. It was reported as under construction and was expected to be completed in July 2024.[19][20]

In March 2018, it was reported that "two percent of the main work of this plant has been done",[21] although it was preparatory land development work. The main construction work of the power plant was planned to start in 2020.[22]

To develop the project, the ground had to be to be raised 10 meters above mean sea level. In April 2019, it was reported that land development and channel excavation was 70% completed.[23]

Construction & cost overruns

Planet satellite photos from February 2018 to September 2019 show significant dredging and land clearing, and from October 2019 to May 2020 show preliminary construction work has begun.

In April 2021, project sponsor Coal Power Generation Company Bangladesh Limited (CPGCBL) announced a phase I cost overrun of roughly US$2 billion, and asked for a time extension by 3.5 years "up to December 2026 from the existing deadline of June 2023 for execution of the project".[24]

In May 2021, the Financial Express reported that phase I was 45% complete.[25]

In an October 23, 2021 Executive Committee of National Economic Council (Ecnec) meeting, the project was brought up for revisions, with the cost increasing by 44.10% (from Tk 35,984.46 crore to Tk 51,854.88 crore).[26] According to the project factsheet provided by the Planning Commission, the reasons behind the project’s revision include "the rise of costs for the channel, jetty, land development and power plant construction alongside an increment of costs against other civil works like Turbine, Boiler, Coal & Ash Handling and Trial Run. Other reasons included "costs against consultancy firm, VAT and import duty, rehabilitation and compensation, rural electrification and township construction and expansion of works." The project deadline was extended to December 2026 from June 2023, even though it appeared on track for 2024.[27]

In November 2021, JICA said some 60% of the work was complete. Other reporting listed the physical progress of the project as 49% complete. According to the CPGC website, Phase I was still scheduled to go into operation in 2024.[26][28]

Planet satellite photos from December 2021 and January 2023 show clear construction progress.

In October 2022, a media source reported that 82% of the structural work has been done and the plant will go into operation in January 2024.[29] CPGC on its website stated that as of November 2022, physical progress of the overall project was 69% and physical progress of port and power plant work was 87%. CPGC website also listed commissioning of Unit 1 in January 2024 and Unit 2 in July 2024.[30]

As of May 2023, the CPGC website stated that physical progress on the overall project had advanced to 76%, and progress on the port and power plant was 94%. The CPGC still listed commissioning dates in 2024 for both units,[31] but according to reporting from May and June 2023, "test commissioning" of the power station was expected to begin at the end of June 2023. The station's project director expected 600 MW of electricity production to begin ahead of schedule in December 2023, with another 600 MW added by March 2024. Construction of transmission lines connecting the power station to the national grid had been completed.[32][33]

In October 2023, it was reported that trial runs at the power plant were at advanced stages, and that commercial operation would likely begin in December 2023.[34]

The BPDB's January 2024 monthly progress report stated that Unit 1 began commercial operation on December 25, 2023.[35] Unit 2 reportedly began undergoing a test run in January 2024.[36]

As of May 2024, Phase I Unit 2 was reportedly slated to begin operating in June.[37] A representative from CPGCBL stated that, as of May 2024, the company had not yet received any payment from BPDB for power supplied to the national grid by Unit 1.[38] In mid-June 2024, Phase I Unit 2 was projected to begin operating before the end of the month.[39]

In September 2024, the Phase I Unit 2 project was said to be "still going on".[40]

Coal Source

The power plant was expected to require 3.73 million tonnes (Mt) of coal a year, which would reportedly be imported from Indonesia, Australia and South Africa through the Matarbari Port.[41]

In June 2024, Coal Power Generation Company Bangladesh Ltd. was accused of allegedly awarding a coal supply contract to a company that had been disqualified during the tender process.[39] Following the corruption allegations, the High Court banned coal imports to Matarbari for six months starting in July 2024. Bangladesh’s Anti-Corruption Commission was investigating the allegations.[42]

Disruptions

In September 2024, CPGCBL warned that the power station could cease operating in about a month if a legal case over a coal tender was not resolved soon (see ‘Coal Source’ above). The legal case involved a six-month ban on coal imports to Matarbari while the case was before the court. The power station had received its last shipment of coal and was running on coal reserves.[42]

In October 2024, the power station ran out of coal and paused generation. Officials reportedly expected the next coal shipment to arrive in mid-December 2024. Four other coal plants in Bangladesh had also cut electricity generation due to coal shortages, unpaid bills, maintenance, and mechanical problems, leading to widespread power outages.[43]

Phase II

Bangladesh's November 2018 Master Plan listed a "Phase 2" of 1,200 MW at the power station with an expected commissioning date of December 2028.[44]

In June 2019, it was reported that to reduce the production cost of Matarbari, another power plant would have to be constructed. According to EnergyBangla, "the per unit power production cost with imported coal will be around Tk. 6.5. But at Matarbari, the cost will be Tk 13.5. If another power plant is constructed then it will be able to use the same infrastructure. As a result, the production cost will fall."[45]

To establish phase II, the government asked for loan assistance from the Japan International Co-operation Agency (JICA). Phase II would be two additional units. Sumitomo Corporation, Toshiba and IHI Corporation of Japan would build the plant according to plans. Reportedly, 1,608 acres of land were acquired.[45]

In June 2020, Japan’s Ministry of Foreign Affairs (MoFA) confirmed that it had decided to proceed with a preparatory survey by JICA for the proposed Phase II. JICA appointed Tokyo Electric Power Services Co Ltd (TEPSCO) to conduct the survey. The EIA was expected to be completed by October 2021. In a joint statement, 350.org and other NGOs called for the Japanese government to stop the survey, saying new solar was already cheaper than new coal power in Bangladesh; that the project was not in line with Japan's climate commitments; and that phase I of Matarbari was already resulting in severe disruptions to people's livelihoods.[46]

In November 2020, Toshiba said it would stop taking orders for new coal plants in line with the growing global trends toward reducing carbon emissions. Existing projects such as Toshiba's involvement in phase I of Matarbari would be grandfathered in, but the company's decision appeared to rule out its involvement in phase II of Matarbari.[47]

That same month, The Daily Star reported that Bangladesh's power, energy and mineral resources ministry had finalized an energy plan that cancelled all coal plants except five under construction. Only phase I of Matarbari was listed; Phase II would likely be cancelled as a result.[48]

However, in June 2021, when the ministry announced the government was officially dropping ten coal plant projects in its master energy plan totaling over 8 GW of power, Phase II did not appear to be part of the projects cancelled.[49]

In addition, in May 2021, Sumitomo Corporation announced its new "Revision to Policies on Climate Change Issues." Although Sumitomo said it would not be involved in any new coal power generation projects, it explicitly left Matarbari phase II (units 3 and 4) as an exception.[50]

As of January 2022, public stakeholder meetings on an Environmental Impact Assessment (EIA) were underway.

In February 2022, Sumitomo Corporation announced that it would not participate in the Phase II expansion. In a victory for advocates who hope to see the entire plant abandoned, the company "reviewed its Policies on Climate Change Issues disclosed in May 2021 and deleted the note on its policy on new coal-fired power generation projects and related construction work."[51][52]

In June 2022, following intense pressure from activists in Bangladesh, Japan, and worldwide, the Japanese government announced it was ending support for the second phase of the coal-fired Matarbari power generation project.[53]

Minister statement in favor of gas plans

In June 2022, Bangladesh said it won’t go forward with the coal-based plan for Matarbari 2, instead building a liquefied natural gas-based plant as the country shifts to alternative energy sources. Minister for Power, Energy and Mineral Resources Nasrul Hamid said they shifted plans to build an LNG based power plant instead of a coal-based one. "We have already cancelled the plan of Matarbari phase-2. We plan to build an LNG-based power plant. The plant will be interconnected with the LNG [Liquified Natural Gas] terminal," he said.[54][55]

2023: CPGCBL and JICA listings

In June 2022, June 2023, and September 2023, the CPGCBL website still indicated in a "live" list of future power projects that a project entitled "Matarbari 2x600 MW USC CFPP (Phase-2)" was under development.[56] According to the site, the project's Preparatory Survey had already been completed and its ESIA (Environmental and Social Impact Assessment) report had been approved.[56]

It was uncertain whether the continued mention of the proposed 'Phase-2' CFPP project indicated any actual intention to continue pursuing a coal project at Matarbari.

The Matarbari Integrated Infrastructure Development Initiative (MIDI) Strategic Vision Development and Economic Impact Analysis, dated March 2023 and authored by the Japan International Cooperation Agency (JICA) and McKinsey & Company India LLP, provided some context on Phase 2:[57]

  • The report indicated that some of the infrastructure which was intended to support Phase 2 had already been built during Phase 1 (Exhibit 94): "Various infrastructure facilities like coal jetty, coal yard, ash pond, utility services, HSD tanks and townships have been created for both Phase 1 and Phase 2 of the project to create synergy and promote integrated development. CPGCBL is keen on establishing Phase 2 to efficiently utilize these existing synergies."
  • Under a "Power and Energy Hub" table (and also in Exhibit 82), the report listed "USC Coal Power Plant #1, #2 (Phase 1) - CPGCBL" and "USC Coal Power Plant #3, #4 (Phase 2) - CPGCBL." The table clearly noted "Only Phase 1 plans alive," but confusingly still listed "Phase 2 – Planned." (In contrast, additional Phases 3, 4, 5, and 6 that may have been floated at one time were clearly confirmed as "Cancelled" in the table and other parts of the report.) The report also summarized Phase 2 as follows: "Only common utilities and transmission infra under construction as part of Phase 1. JICA has withdrawn funding for this phase (after GoBD’s cancellation of coal plants). For the purpose of this report, this phase is considered as uncertain."
  • One "key suggestion" documented from a Government Stakeholder Workshop held in March 2023 (report section 11.9.5) was that "Cancellation of Phase 2 Power Plant (1.2 GW) would increase tariff of Ph 1 plant and make it less attractive," implying that it was still being discussed.
  • Other parts of the report made it seem unlikely the capacity was being seriously considered. First, the report's "Power mix evaluation" section referencing the IEPMP included a mention that beyond Phase 1, "no further coal capacity will be considered at MIDI, in line with the decision of GoBD to limit coal power generation." Second, the report also did not list Phase 2 under the plants considered for future planning at MIDI under "basis conversations with JICA and Power division of Ministry of Power, Energy and Mineral Resources."


The Bangladesh Power Development Board's 2023 annual report included Phase 2 of the project in a list of plants "under planning process."[58]

Given the uncertainty, the Phase 2 expansion was considered as remaining under potential early consideration (announced). However, considering Japan's exit, financing trends for coal more generally, and other developments in the area, there is essentially no chance the project will ever move forward and it is likely shelved or cancelled.

As of April 2024, Coal Power Generation Company Bangladesh's website stated that the 1,200 MW Phase 2 coal project had feasibility studies completed and that the search for funding was ongoing.[59]

In July 2024, CPGCBL signed a Memorandum of Understanding for a 500 MW solar project in Cox's Bazar. Reporting on the project mentioned the potential coal-fired Phase II at Matarbari power station.[60]

Faulty Environmental Impact Assessment (EIA)

The Department of Energy approved the Phase I EIA in 2013, just before the land acquisition began. However, according to an analysis by Centre for Research on Energy and Clean Air (CREA) and others, the EIA for Phase I – conducted by TEPSCO (Tokyo Electric Power Service Co Ltd) under the supervision of Japan International Cooperation Agency (Jica) Study Team – did not provide data on mercury pollution or monitor Particulate Matter (PM) 2.5. CPGPBL Project Director also admitted that parts of the EIA modelling had flaws.[26]

For Phase II, as of November 2021, project developers were allegedly following the proper modeling procedures and taking measures to mitigate the pollution to be caused by Phase I. Stakeholder meetings were held in Dhaka and Matarbari.[26]

Financing

Phase I: Since 2014 the project has been uniquely financed by the Japan International Cooperation Agency (JICA) with five separate overseas development assistance loans. Due to the project's use of ultra-super critical technology, part of JICA's original justification for its involvement was that "this project will mitigate climate change in addition to alleviating the power shortage and improving the stable power supply in Bangladesh."[61] JICA's five low interest loans total approximately US$2.79 billion. Its latest US$1.33 billion loan reached financial close in July 2020.[62] A special Reuters investigation released in June 2023 found that Japan continued to claim that its loans counted as "climate finance" contributed under the 2015 Paris Agreement.[63]

Nippon Export and Investment Insurance was expected to provide export credit insurance coverage for the project and in 2017 it estimated the total project costs to be JPY 500 billion (approximately US$4.5 billion). Sumitomo Mitsui Banking Corporation was the project's Financial advisor.[64]

In November 2021, ERD officials said about $1.20 billion loans from JICA would come to cover the "6th portion to implement Matarbari Ultra Super Critical Coal-Fired Power Project." Jica provided $2.63 billion for the project in the first five tranches. Financial progress for the plant was 51% complete.[28]

On September 30, 2023, JICA signed a loan agreement with the Government of the People's Republic of Bangladesh in Dhaka to provide Tranche 7 of Japanese ODA loan of up to 217,556 million yen (US$1.45bn). Completion of the loan would be in "July 2024 – when the facilities enter service."[65][66][67]

A media source from August 2023 referred to the financial progress of the project was 65.14% with JICA having already provided JPY 437.754 billion in previous 6 tranches (US$2.96 bn). Under this 7th tranche of ODA loan, JICA will provide JPY 217.556 billion (US$1.45bn).[68]

IEEFA report from June 2022 indicated that the cost of the project has increased to Tk510.7 bn (US$6 bn), equivalent to $5 million/MW of installed capacity. This is 8-10 more expensive than for comparable plants in China.[69] There are several possible explanations for the high cost - equipment (Japanese and Korean equipment is used), contracting cost and facilities (the project is understood to include a dedicated port and coal handling facilities).[69] A series of cost hikes and an extended project timeline are also understood to have contributed to higher cost.[69]

Phase II: In March 2021, it was reported that JICA was conducting an environmental and social impact assessment for the proposed Phase II expansion of Matarbari which would be the basis for a JICA decision on providing further financing. According to Naoki Ito, Japan's ambassador to Bangladesh, "In spite of difficulties, my government decided to do a survey and research on unit 3 and 4."[70] As noted above, the project has faced cost overruns,[27] and Japan backed out of supporting Phase II in June 2022.

Project impacts & opposition

According to local news reports, the construction of Matarbari Phase 1 blocked watergates and natural drainage systems designed to drain flooding caused by monsoons and cyclone-induced storms, “resulting in water logging after heavy rainfall, causing immense suffering for locals”.[64] In 2018, 22 out of 31 villages were waterlogged and inundated, and local communities reported “five incidents of death by drowning, of which all were children.”[71] Seven school children were also severely injured by a boat sinking incident during their commute from school.[64]

Villagers who were evicted due to the construction of the Matarbari Kohelia coal plant. Photo Credit: Sharif Jamil, Waterkeepers Bangladesh

The land acquisition process for Matarbari, which commenced in 2013, has resulted in the loss of people’s homes and livelihoods.[72] The process has caused upset because the community was not properly consulted and, to date, not adequately compensated. Displaced families have not been relocated to new housing facilities promised by the project proponents, forcing some to migrate and resettle elsewhere.[73] The communities have also lost traditional livelihoods in salt cultivation and shrimp farming, leaving 20,000 people without the means to make a living.[74]

Potential air pollution impacts are also expected to be severe and, given the extensive Japanese interest in the project, would not be acceptable in Japan. According to a research report by Greenpeace Southeast Asia and Greenpeace Japan, Matarbari Phase 1 would not meet the pollution standards applied to new plants constructed in Japan. The report finds pollution from Matarbari Phase 1 alone would cause up to 14,000 premature deaths during its operational years.[75]

In January 2022, activists launched a campaign to halt the Japanese-funded coal project. Youth activists with the Friday for Future movement said that the project was at odds with Japan’s commitment to end funding for unabated coal power overseas, and could deprive as many as 20,000 people of their land. A spokesman for Sumitomo said it was fulfilling its contract, adding the project was not at odds with the firm's own net-zero emissions goal as it would be operated by the Bangladesh government and retired before mid-century.[76]

In September 2024, the power station was criticized for not benefitting the local community. Related projects, including deep-sea ports, industries, railways, and roads, were included in original development plans, but they were not implemented.[77]

Worker issues

COVID-19 Workers' Strike

The 3,000 labourers at the Matarbari construction site have been forced to work during the COVID-19 pandemic despite strict government orders to stop. In April 2020, the workers went on strike demanding their right to safe health. When probed by reporters, a CPGCBL spokesperson denied any grievances by workers and stated that work would continue.[64]

Two workers die during construction

On July 13, 2020, it was reported that two workers died during construction of the Matarbari plant when an electric pillar fell. The pillar fell on one worker, killing him instantly. Another worker was on the pillar when it fell and died later in the hospital.[78]

Maheshkhali power complex

Matarbari power station is part of a large multi-plant complex being organized by the Bangladesh Power Development Board (BPDB). In August 2013, the BPDB announced that it intended to develop a multi-plant power complex at Cox's Bazaar, including both coal-fired plants and combined cycle gas-fired plants. The announcement stated that the BPDB "intends to build 6000 MW Ultra Super Critical Coal Based Thermal Power Plant and 3000 MW LNG Based Combined Cycle Power Plant in different phases at Maheshkhali Upazila in Cox’s Bazar District." The announcement stated that the fuel for the projects would be imported coal and liquified natural gas. Five thousand acres were in the process of aqcquisition, situated within Amabassaya, Honanok and Panir Chhara mouza of Hoanok Union and Gharibhanga mouza of Kutubjhom union under Maheshkhali upazila, Cox’s Bazar. Ultra-supercritical technology would be employed by the coal plants, which would be sized at 600 to 1000 MW per unit.[79]

Articles and Resources

References

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Additional data

To access additional data, including interactive maps of the power stations, downloadable datasets, and summary data, please visit the Global Coal Plant Tracker and the Global Oil and Gas Plant Tracker on the Global Energy Monitor website.