Japan will stop funding the second and final phase of a 1,200 megawatt coal-fired power plant in Bangladesh in an effort to reduce carbon emissions, a senior Japanese official said, amid criticism of Tokyo’s financing of overseas coal power projects.
The Japan International Cooperation Agency (JICA) had committed to provide a total of U.S. $4.5 billion in loans for two phases of the $5.1 billion Matarbari coal power plant in southeastern Bangladesh, officials in the South Asian country said.
The Bangladesh government was to bear the remaining cost of the project, according to officials at the Coal Power Generation Company Bangladesh Limited (CPGCBL), the government-owned company building the plant. Data was not immediately available on how much JICA had already provided of the total funds it has committed.
Japan’s Ambassador to Bangladesh Naoki Ito told BenarNews that JICA would complete funding units 1and 2 of the first phase of the Matarbari plant.
“But units 3 and 4 will not be done as yen loan projects, in light of the need for decarbonization and climate change responses,” he said.
The Group of Seven nations, including Japan, had agreed in 2021 to stop the international funding of coal projects unless these projects had the technology to reduce emissions.
Power Division Secretary Md. Habibur Rahman told BenarNews that neither the department nor the Power Ministry had been official informed by JICA about its decision to end funding, although they had heard about it.
When asked what the authorities may do with the unfinished power plant, Rahman said there were two options – look for another source of funding or convert the project to a non-coal-fired power plant.
“We have not taken any decision yet. After we are informed of the Japanese government’s decision through an official channel, then we will hold a meeting to make our decision,” he said.
Last year, Bangladesh scrapped 10 coal-fired power generation projects due to international pressure and unavailability of funds for coal power expansion.
The Bangladesh government has already acquired 1,608 acres of land for the Matarbari coal-fired power plant project in southeastern Cox’s Bazar district.
The project has been controversial for a while now.
A study released by the Finnish research organization, Centre for Research on Energy and Clean Air (CREA), said the Matarbari coal-fired power plant was one of eight similar projects close to each other that together would cause 30,000 pollution-related deaths over their operational life of 30 years.
Bangladesh Environmental Lawyers Association Chief Executive Syeda Rizwana Hasan said JICA’s decision showed that the Japanese government listened to its people.
“While we congratulate the Japanese people and Government for standing by our side and accepting our lawful demands, we believe that the Government of Bangladesh will follow the same pathway and abandon the first phase of the Matarbari Power plant which has already proven destructive for the local ecosystem, the river, and the intimidated community,” she told BenarNews.