People’s Republic of Bangladesh / Support for Construction of Matarbari Ultra-super Critical Coal-fired Thermal Power Plant and Port

October 18, 2017

Nippon Export and Investment Insurance

Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Kazuhiko Bando) has decided to provide Export Credit Insurance for Sumitomo Corporation and IHI Corporation which were awarded an EPC contract by Coal Power Generation Co. Bangladesh Ltd. of People’s Republic of Bangladesh. The contract was signed by a Japanese consortium including Sumitomo and IHI for the construction of Matarbari ultra-super critical coal-fired thermal power plant and a deep sea port in Bangladesh.

This is a combined project of a coal-fired thermal power plant and a deep sea port modeled on Kashima Port in Japan. The plant and port will be constructed at designated sites on Matarbari Island in southeastern Bangladesh. With generation capacity of 1,200MW (600MW x 2 units), the highly efficient ultra-super critical power plant using imported coal as fuel is expected to provide about 10% of the total generation capacity of Bangladesh. The introduction of Japan’s state-of-the-art high efficiency coal fired power technology will realize improved control of fuel consumption and CO2 emissions by generating high pressure steam and temperatures, which will contribute to reducing environmental impact. In addition, Bangladesh’s first deep sea port adjacent to the plant will also contribute to further development of Matarbari’s hinterland.

The project will be financed under ODA loan by the Japan International Cooperation Agency (JICA). It will be one of the largest ODA loan projects, with total project cost amounting to JPY 500 billion. For NEXI, the insurance to be provided will mark the largest amount underwritten on a single project.

Sumitomo will be responsible for the plant’s civil work and auxiliary equipment, and port’s civil works and construction, working with Toshiba Plant Systems & Services Corporation and Penta-Ocean Construction Co., Ltd. IHI will be responsible for boiler supply and installation. Construction of the power plant, port, and power started in August 2017 and is scheduled for completion in July 2024.

Featuring Japanese technology and know-how, the project will serve as a good example of the Japanese government’s Quality Infrastructure Partnership Initiative. By using Japanese fund and technology, the project will contribute to meeting the urgent need for electric power in Bangladesh and its industrial and economic development.

Bangladesh has faced power shortages as the economy has grown rapidly. The electricity demand is expected to increase from 9,000MW in 2017 to 35,000MW in 2030. Currently, power generation using domestic natural gas accounts for about 65% of the total generation capacity, but the government is promoting power generation based on LNG and imported coal to secure a stable energy supply. Also, the port construction is expected to play a key role in the industrial development of the Matarbari area. At present, large vessels are forced to transship cargoes to smaller boats to enter ports due to the country’s shoaling coast.

As a financial institution implementing Japan’s policy, NEXI will continue to support Japanese exports.

Insured Sumitomo Corporation, IHI Corporation
Covered Risks Political Risk 97.5%, Commercial Risk 90%

Contact: Overseas Investment Insurance Underwriting Group,
Underwriting Department
Tel: 03-3512-7668