In a striking move that underscores Japan’s commitment to global energy partnerships, JERA Co. Inc., the powerhouse behind Japan’s energy landscape, is pouring $1 billion into Bangladesh’s burgeoning energy sector. This investment isn’t just a financial transaction; it’s a clear signal of how international collaboration can reshape energy demands and drive sustainable development. JERA, which stands for Japan’s Energy for a New Era, is no small player. Generating a whopping 30% of Japan’s electricity with a domestic capacity of 61,000 megawatts (MW), JERA also boasts operations in the Philippines, Thailand, and Indonesia, with an additional 13,700 MW capacity abroad. Not to mention, managing 35 million tonnes per annum (MTPA) of liquefied natural gas (LNG) supplies, JERA firmly places itself among the giants of global energy.
JERA’s foray into Bangladesh began back in 2019 when it snagged the Meghnaghat 718 MW power plant from Indian conglomerate Reliance Power. Once up and running, this plant will hold the title of Bangladesh’s largest gas-based independent power producer (IPP). The project is no lone wolf; it enjoys substantial backing from the Japan Bank for International Cooperation (JBIC), the Asian Development Bank (ADB), and major banks like Mizuho and SMBC. With cutting-edge tech from General Electric and construction led by Samsung C&T Corporation, the Meghnaghat project is a prime example of global expertise converging to deliver high-efficiency energy solutions.
However, it hasn’t been all smooth sailing. The project has faced its fair share of hurdles, including delays in gas pipeline construction and securing a consistent gas supply. Local power plants have sometimes taken precedence over JERA, forcing the company to finance a branch pipeline at its own expense. As Smitesh Vaidya, head of contracts and commercial at JERA Meghnaghat Power Limited, noted, “We have made significant progress and are close to commissioning.” The stakes are high; the plant’s operational success could significantly bolster Bangladesh’s power grid, ensuring a steady electricity supply.
But wait, there’s more. JERA isn’t stopping at the Meghnaghat plant. The company is eyeing the establishment of a land-based LNG terminal in Matarbari. This could be a game-changer for Bangladesh, which currently relies on two floating storage and regasification units (FSRUs) that are susceptible to disruptions from cyclones. In 2024, one of these FSRUs was out of commission for over nine months, highlighting the urgent need for more reliable infrastructure. JERA’s proposal for a land-based terminal could align perfectly with Bangladesh’s growing energy needs and climate resilience goals.
Looking ahead, JERA’s ambitions stretch far beyond gas. In a recent letter to the Bangladeshi government, the company expressed interest in renewable energy projects like solar and wind, alternative energy solutions such as hydrogen and ammonia, and expanding LNG supply chains to fuel industrial growth. This could translate into a staggering $2 to $3 billion in foreign direct investment over the next five to ten years. Plus, JERA plans to set up a local office in Dhaka, signaling a long-term commitment to the country’s energy future.
Japan has been a steadfast ally of Bangladesh since its independence in 1971, providing financial and technical support for numerous infrastructure projects. JERA’s investment is a continuation of this legacy, reinforcing Japan’s role as a partner in Bangladesh’s journey toward economic growth and sustainable development. As Bangladesh seeks to expand its industrial base and elevate the quality of life for its citizens, a robust energy supply is non-negotiable.
The path ahead is not without its challenges. Government support will be crucial in ensuring timely gas supply and infrastructure development. But by teaming up with a global energy leader like JERA, Bangladesh isn’t just seizing an economic opportunity; it’s laying the groundwork for a resilient and sustainable energy future. As the Meghnaghat project nears completion, it serves as a powerful testament to the potential of perseverance, partnership, and shared progress. JERA’s journey in Bangladesh is just beginning, and if successful, it could pave the way for a new era of energy excellence in the region.
