Matarbari coal power plants: Japanese companies threaten communities and climate in Bangladesh

12 June 2020

In the wake of the fiercest storm Bangladesh has experienced this century, Japanese financial institutions and coal developers are trying to push three new coal power stations, fuelling extreme weather and climate change.

Locals on remote Matarbari Island on the southeastern coast of Bangladesh are still dealing with the devastation of super cyclone Amphan, which has displaced over two million people. But these communities are also contending with a massive build-out of coal power which threatens their lives and livelihoods, and will worsen the extreme weather conditions caused by climate change.

The Japan International Cooperation Agency (JICA), Nippon Export and Investment Insurance (NEXI), Sumitomo Corporation (Sumitomo), and Sumitomo Mitsui Banking Corporation (SMBC) are pursuing proposed new coal power stations totalling 3,100 MW of capacity.  These projects:

  • have displaced local communities, destroyed livelihoods, and violated workers’ rights,
  • would worsen air pollution, killing thousands of people over the lifetime of the projects,
  • would increase climate impacts on the already vulnerable Bangladesh, releasing over 506 million tonnes of CO2 throughout the plants’ operational lifetimes – five times more than the entire country’s carbon dioxide emissions from fossil fuels and industry for 2018, and
  • violate the climate policies of JICA, SMBC and Sumitomo.

Given these health, human rights and climate impacts, JICA, NEXI, SMBC and Sumitomo need to get out of the coal projects on Matarbari Island immediately.

“We have no room to build anything that emits CO2 emissions.”

Fatih Birol, Executive Director, International Energy Agency.

Take action

Tell these companies to stop pursuing coal power in Matarbari

Matarbari: image by Tanweer Morshed / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)

The Dirty Three

Matarbari Phase 1 (1200MW)

The first phase of the Matarbari coal-power plant, costing a colossal US$4.51 billion, is jointly sponsored by Bangladesh state owned Coal Power Generation Company Bangladesh Limited (CPGCBL) and Sumitomo with SMBC acting as financial advisor. JICA has already provided US$1.48 billion to build the power plant and adjacent coal import infrastructure in the form of an official development assistance loan to Bangladesh. JICA intends to provide an additional US$1.33 billion to complete the project. NEXI is providing export credit insurance coverage for this project.

Matarbari Phase 2 (1200 MW)

The Bangladesh government has reportedly requested further JICA loan assistance to build a second plant at Matarbari, as Phase 1 is “suggested to be economically nonviable, being the only plant to rely on the planned coal port infrastructure.”

NGOs from 18 countries around the world have urged Japan to stop funding Matarbari Phase 2.

Matarbari Kohelia Phase 1 (700 MW)

The third proposed plant at Matarbari, Kohelia (Phase 1), is a joint venture between CPGCBL and Singapore’s Sembcorp Industries. This plant is also backed by Japan’s SMBC, playing a lead role as financial advisor. 

Given that these projects are on a very small island and proximate to one another, the cumulative impacts of these three projects will be felt by the communities on the island.

Devastating health and human rights impacts

Lost lives, homes and livelihoods

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”. 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.” Seven school children were also severely injured by a boat sinking incident during their commute from school.

Children are forced to commute to school on small boats because of water logging due to the construction of Matarbari Phase 1. Note the lack of safety gear or life jackets.
Photo Credit: CLEAN (Coastal Livelihood and Environmental Action Network) Bangladesh

The land acquisition process for Matarbari Phase 1, which commenced in 2013, has resulted in the loss of people’s homes and livelihoods. The process has been met with resentment 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.

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

The communities have also lost traditional livelihoods in salt cultivation and shrimp farming, leaving 20,000 people without the means to make a living.

Choked by coal

Bangladesh’s air quality is already amongst the worst in the world, with IQAir ranking Bangladesh as having the worst average air quality in 2019. 

What’s more, despite the proposed and under-construction coal power plants being pursued by Japanese companies, they would not be acceptable in Japan due to their rates of air pollution. According to research by Greenpeace Southeast Asia and Greenpeace Japan, Matarbari Phase 1 would not meet the pollution standards applied to new plants constructed in Japan.

Source: Greenpeace Japan and Southeast Asia

The report finds pollution from Matarbari Phase 1 alone would cause up to 14,000 premature deaths during its operational years. Building three new coal plants at Matarbari would add to Bangladesh’s air pollution-related death toll, which totalled over 120,000 in 2017.

Forced to work during the COVID crisis: While the entire world is fighting the coronavirus pandemic and taking strict measures for public health, the 3,000 labourers at the Matarbari construction site were forced to work 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 will continue.

Threats to climate

“Coal power plants in coastal areas will worsen climate risk.”

Professor Anu Muhammad, Jahangirnagar University, Bangladesh.

Plans to build these three coal power plants are completely out of line with the Paris Agreement goal of keeping global warming to 1.5°C. If built, the three proposed coal plants at Matarbari backed by Japanese financial institutions would produce an estimated 506 million tonnes of carbon dioxide throughout the plants’ operational lifetimes – five times more than the entire country’s carbon dioxide emissions from the burning and use of fossil fuels, and other industrial processes for 2018.

Bangladesh is extremely vulnerable to climate change. The coastal areas of Bangladesh are highly prone to floods, cyclones and storm surges, as seen by the destruction caused by super cyclone Amphan. Even in a scenario where global warming is limited to 2°C by 2050, 42 million people living on coastal Bangladesh would be at risk of flooding at least once a year. Under the same scenario, all of Matarbari Island is projected to be inundated by coastal flooding.

Damaged embankments and roads inundated due to water logging on Matarbari Island.
Photo Credit: CLEAN (Coastal Livelihood and Environmental Action Network) Bangladesh

Violations of climate policy

JICA, Sumitomo and SMBC have all made climate commitments, which are violated by their support for these three power stations. NEXI has failed to assure that its guidelines on environmental and social considerations were properly implemented for Matarbari Phase 1. 

  • JICA has committed to the UN Sustainable Development Goals (SDGs) and the Sendai Framework For Disaster Risk Reduction 2015 – 2030, which aim to make communities safer and more resilient to disasters. JICA itself has created a Climate Change Cooperation Strategy, under which JICA must proactively support the transformation to a low-carbon and climate-resilient society in developing countries.
  • Sumitomo has made clear commitments to “resolving the climate change issues and to realizing a carbon-neutral society” and ruled out development of new coal-fired power plants in its latest climate change policy, expressing support for the Paris Agreement.
  • SMBC has recently announced a policy stating the bank would end support for “newly planned coal-fired power plants,” which should undoubtedly include new projects such as Matarbari Phase 2 and Kohelia.
  • NEXI has failed to assure that its guidelines on environmental and social considerations were properly implemented in the context of Matarbari Phase 1. Matarbari Phase 1 does not meet standards listed in the NEXI’s ESIA environmental checklist for thermal power including resettlement, living and livelihood and working conditions and does not meet IFC Performance Standards which NEXI uses to assess projects.

The people of Bangladesh deserve a sustainable future where coal is out of the picture and renewable energy drives the country’s progress.

We urge Sumitomo to suspend plans to build coal-fired power and utilise the capital to deploy clean, renewable energy projects. The financial institutions involved in the projects – NEXI, JICA and SMBC must live up to their strong climate commitments and or their standards for environmental and social considerations and withdraw financial support from these coal power plants immediately.

References

  1. Bangladesh Poribesh Andolon & Waterkeepers Bangladesh, ‘The tourist capital of Bangladesh endangered by plans to build the largest coal power hub in the world’ (November 2019).
  2. Bangladesh Working Group on External Debt (BWGED), ‘Initial Observation of BWGED on Matarbari Coal Power Plant’ (7 August 2018).
  3. Climate Central, ‘Coastal Risk Screening Tool’ (Accessed 10 April 2020).
  4. Climate Central, ‘Flooded Future: Global vulnerability to sea level rise worse than previously understood’ (29 October 2019).
  5. Dan Tong et al, ‘Committed emissions from existing energy infrastructure jeopardize 1.5 °C climate target’. Nature volume 572, page s373–377 (2019). DOI: https://doi.org/10.1038/s41586-019- 1364-3.
  6. European Commission’s Joint Research Centre (JRC), ‘Fossil CO2 and GHG emissions of all world countries – 2019 Report’ (2019).
  7. Global Energy Monitor (GEM), ‘Global Coal Plant Tracker – January 2020 dataset’ (not publicly available).
  8. Greenpeace Southeast Asia & and Greenpeace Japan, ‘A Deadly Double Standard: How Japan’s financing of highly polluting overseas coal plants endangers public health’ (20 August 2019).
  9. Health Effects Institute, ‘State of Global Air 2019 – Special Report’ (2019).
  10. International Finance Corporation. ‘Performance Standards on Environmental and Social Sustainability.’ (1 January 2012). 
  11. IJGlobal, ‘Asset Data and Transaction Data’ (accessed 10 May 2020).
  12. IJGlobal, ‘Bangladesh and JICA sign coal-fired loan’ (2 July 2019).
  13. IJGlobal, ‘Kohelia Coal-Fired Power Plant (700MW)’ (accessed 10 May 2020).
  14. Institute for Energy Economics and Financial Analysis (IEEFA), ‘IEEFA Update: Bangladesh’s coal expansion plans stir criticism’ (26 June 2019).
  15. IQAir, ‘2019 World Air Quality Report’ (February 2020).
  16. Japan International Cooperation Agency, ‘JICA Climate Change Cooperation Strategy’ (September 2016).
  17. Lifetime CO2 estimates are based on the Global Energy Monitor’s (GEM) Global Coal Plant Tracker (GCPT) July 2019 dataset (not publicly available).
  18. Nippon Investment and Investment Insurance, ‘Environmental Checklist 12: Thermal Power.’ (Accessed 10 June 2020).
  19. Nippon Investment and Investment Insurance, ‘Guidelines on Environmental and Social Considerations in Trade Insurance’ (April 2017). 
  20. Market Forces ‘Choked by Coal: the Carbon Catastrophe in Bangladesh’ (6 November 2019).
  21. Market Forces, ‘Small steps in the race to save our climate’ (17 April 2020).
  22. Prothom Alo, ‘মাতারবাড়ী বিদ্যুৎকেন্দ্র লকডাউনের দাবি, কর্তৃপক্ষ বলছে কাজ চলবে’ (10 April 2020).
  23. Relief Web, ‘Cox’s Bazar: Maheshkhali – Water Logging’ (9 July 2018).
  24. Sembcorp, ‘Sembcorp Climate Change Strategy’ (March 2018).
  25. Sumitomo Corporation, ‘Integrated Report 2019’ (Accessed 18 May 2020).
  26. The Daily Star, ‘Displaced by development’ (1 December 2019).
  27. The Financial Express, ‘Downpour maroons people of Moheshkhali’s Matarbari’ (29 July 2018).