Prospects of Bangladesh-Japan Cooperation in the Energy Sector

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The recent visit of Bangladesh PM Sheikh Hasina to Japan made some remarkable grounds for taking further steps to enhance the cooperation in the energy domain between the two states. Leading Japanese businesses have decided to partner with Bangladeshi investors in joint ventures for gas infrastructure, hospitals, and information technology projects, as well as solar and gas-based power plants with a combined capacity of 1500 MW. Nine of the 11 memorandums of understanding (MoUs) signed in Tokyo on 27 April involved collaboration between Japanese and Bangladeshi investors, in line with the prime minister-level consensus declared the day before on the promotion of bilateral relations to a “strategic” level. One of the business agreements made on the third day of Prime Minister Sheikh Hasina’s state visit to Japan is the construction of a high-efficiency 700MW combined cycle gas-fired power plant in Anowara, Chattogram. The facility will be constructed and run by KEPCO, AKH PP Project, Itochu, and will take advantage of Kansai’s operating and maintenance know-how.

Another Memorandum of Understanding (MoU) was signed by Doreen Group and Marubeni for cooperative funding and the creation of new solar power projects. Together, Asian Entech Power Corporation Limited and Marubeni Corporation will invest in and build new power projects in various regions of Bangladesh, including solar power projects, with a total anticipated capacity of 600MW. Additionally, an MoU for the cooperative development of a 200MW floating and ground-mounted solar power plant in Bangladesh was signed by Parker Bangladesh Ltd. and Sumitomo Corporation.

The two Prime Ministers commended the remarkable advancements made in the BIG-B initiative-funded Matarbari deep sea port and other projects in the Southern Chattogram region. They reaffirmed their commitment to continuing and stepping up their cooperation so that Matarbari Port, using Japanese know-how and technology, can develop into a center of energy, logistics, and industry in Bangladesh and improve communication between Bangladesh and its surrounding nations.

All of these are continuation of some major initiatives by the government making by the last decades. When the whole world is suffering from energy crisis and the iversifiation of energy sources are a crying need for many countries, Bangladesh is one step ahead of many natins by ensuring a robust relation with countries like Japan to maintain a steady supply of energy to the mass. The next portions will shed light on different aspects of Bangladesh Japan cooperation in the energy domain.

Japan: A Trustworthy Energy and Financial Infrastructure Investor

Japan has recently emerged as another important ally in Bangladesh’s energy sector. The Matarbari coal fired plant and the new investment opportunities make it even more crucial to guarantee a stable energy domain. To build energy infrastructure, distribute gas, LNG, and storage in Bangladesh, Bangladesh’s Summit Group has partnered with JERA, the country’s largest utility provider. In order to enhance Bangladesh’s on-shore and offshore regasification and storage infrastructure and to provide the country with long-term, affordable, and dependable supplies of liquefied natural gas and other fuels, the parties intend to invest about $2 billion together. The Bangladesh Securities and Exchange Commission (BSEC) and the Bangladesh Investment Development Authority (Bida) jointly organized the Tokyo Summit on “Trade and Investment Opportunities between Bangladesh and Japan,” where the MoUs were signed.

The Japan International Cooperation Agency (JICA) provided the project with a $10.74 billion (90 million dollar) Official Development Assistance (ODA) loan in June 2014. The ODA loan has a 30-year payback schedule and a 10-year grace period. A second $20 million ODA credit in the sum of 2.65 billion was given to the government of Bangladesh by JICA in June 2018.

Coal-fired Power Plant in Matarbari: A New Era in Energy Production

Coal Power Generation Company Bangladesh (CPGCBL), a government organization of the People’s Republic of Bangladesh, is developing the 1.2GW project with an estimated cost of $4.5 billion. After being planned in September 2011, the Matarbari power station received environmental certification in October 2013. The project had its official opening in January 2018; activities should begin by 2024.

Support Systems for the Plant

A new deep-sea port facility called Matarbari Port will be built in order to import the coal required for the power plant. The port will have a 760 m long container and a multipurpose terminal. A brand-new 400kV transmission line will be used to connect the power plant’s output to the national grid.

Japanese Power Systems Investment

Bangladesh has asked the Japanese International Cooperation Agency (JICA) to invest in renovating the power and energy transmissions and distribution infrastructure in the country’s southwest in order to promote economic development through the use of the Padma Multipurpose Bridge. Nasrul Hamid, the state minister for power and energy, made the request to Tomohide Ichiguchi, the recently appointed chief representative of the JICA, during a recent courtesy call at the Bangladesh Secretariat office in Dhaka. He believes that Bangladesh’s goal is to create a JICA-supported Power Management Institute that complies with global standards.

Bangladesh’s Prospects under Japan’s Super Grid

By connecting together some of the biggest economies and the most energy-hungry populations with a 36,000km-integrated renewable energy infrastructure, Japan has advanced attempts to achieve its ten-year-old objective of decarbonizing Asia. Bangladesh is a participant in the “Asia Super Grid (ASG)” program, which intends to link electric power systems and offer reciprocal advantages through the sharing of plentiful, renewable natural energy sources including wind, solar, and hydropower.

Taiwan, South Korea, Japan, China, Mongolia, India, Thailand, Malaysia, Singapore, the Philippines, and Taiwan are among the nations negotiating the proposed high-voltage direct current (HVDC) link. HVDC technology is said to as the best of both worlds since it can travel over vast distances with less power loss than alternative current (AC).

Capacity Building for Bangladesh

Bangladesh will require more energy in the upcoming decades to keep up with the population’s demands for residential and industrial connections and to stay up with the rate of development. To keep the energy industry varied, nevertheless, this electricity will come from renewable energy sources. Due to the projects that are now being worked on, Bangladesh’s overgeneration capacity also expanded by 30.8% between FY18 and FY22, from 8,231MW to 10,764MW, and will do so again this fiscal year. Furthermore, the transmission and distribution lines grew by 5.5% and 2.5%, respectively, in FY22. The ASG can help Bangladesh receive electricity from sizable facilities on desolate foreign soil for less money and through environmentally friendly methods. It will increase Bangladesh’s capacity to supply electricity.

Shift to renewable energy: A Leap toward Modernization

The recent visit of the Prime Minister of Bangladesh to Japan witnessed a handful amount of MoUs signed where a significant portion was on renewable and clean energy generation. There were previous ids by the East Asian states to ensure a clean energy mix in Bangladesh.

Cooperation on Safe Nuclear Energy Uses

The leaders of Bangladesh and Japan have expressed interest in attending the first expert-level meeting on the responsible and safe use of nuclear energy. Shinzo Abe and Sheikh Hasina discussed their aims during their bilateral meeting in 2014 at Sheikh Hasina’s office in Dhaka. Following the conference, they declared that they would continue to host the “Japan-Bangladesh Expert Dialogue on Peaceful and Safe Uses of Nuclear Energy.” These conversations aimed to strengthen bilateral cooperation in the areas of developing human resource capacity and the responsible and peaceful use of nuclear energy. It also intends to disseminate the information and understanding obtained from the incident at the Fukushima Daiichi Nuclear Power Station owned by Tokyo Electric Power Company.

The two countries reiterated the importance of expanding their energy cooperation, particularly in the field of using nuclear energy peacefully, while bearing in mind that Bangladesh’s economic development depends on a steady supply of electricity. Stable energy supply is one of the key areas of attention for the Bay of Bengal Industrial Growth Belt (BIG-B) plan, which serves as the “centrepiece” of Japanese cooperation. The two prime ministers acknowledged the effort’s merits and stressed the necessity of fostering teamwork and cooperation in project planning and execution through policy discussion.

Japan is interested in working with other countries to strengthen the transportation system, ensure a steady supply of electricity, develop cities by creating industrial zones, and expand the private sector by fostering financial accessibility. According to the joint statement, the initiative’s three pillars—improving the environment for investment, enhancing connectivity, and building economic infrastructure—are the foundations of energy stability. The two leaders expressed their optimism that the BIG-B program, which fully utilizes Japanese cutting-edge technologies, including highly efficient coal-fired power generation, will advance the economy of both countries. According to the statement, they had in-depth discussions on a range of bilateral, regional, global, and multilateral issues of mutual interest within the context of a comprehensive collaboration.  They hoped that the first meeting would take place in Dhaka early in the following year and expressed their delight that the two countries had started a dialogue at the level of the foreign secretary.

As Bangladesh invites Japan for investment, Abe recognized the Special Economic Zones’ location, aggressive incentives, infrastructure improvement, and labor availability as “important elements” for their firms. Because of its proficiency in nuclear power generation, understanding of renewable energy sources, and financial soundness, Japan over time emerged as a significant force in the power sector. Bangladesh, on the other hand, took some proactive steps to collaborate with the economic giant which is going to create a strong synergy for mutual cooperation in energy sector.

– Syed Raiyan Amir is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).

Published in Modern Diplomacy [Link]