The Government of Japan will provide Bangladesh a total amount of US $1.31 billion as loan for the Matarbari coal-fired power plant project.

The Exchange of Notes and Loan Agreements were signed between the governments of Japan and Bangladesh today, according to a press release of the Economic Relations Division under the Ministry of Finance of the Bangladesh government.

Japan will provide the loan under the 40th Official Development Assistance (ODA) Loan Package for the power plant project, according to the release.

The rates of interest of the loan per annum is 0.9 per cent for construction and 0.01 per cent for consulting services, while the front-end fee is 0.2 per cent and the Repayment period is 30 years including 10 years grace period.

Monowar Ahmed, secretary to the Economic Relations Division, signed the Exchange of Notes with Ambassador of Japan to Bangladesh Hiroyasu Izumi, and the Loan Agreement with Hitoshi Hirata, chief representative of the Japan International Cooperation Agency (JICA) Bangladesh office, according to the release.

The objective of the project is to meet growing electricity demand and to improve stable power supply by installing the 1200 MW Ultra Super Critical Coal-Fired Power Plant at Matarbari area of Maheshkhali upazila under Cox’s Bazar district.

The Executive Committee of the National Economic Council (Ecnec) approved the project on August 12, 2014 with an implementation period from July 2014-June 2024 and at the total cost of Tk 35,984 crore.

JICA will provide Tk 28,939.03 crore of the total cost of the project as ODA loans in different phases, the release read.