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Bangladesh eyes $2bn energy investment deals with Indonesia

Jul 20, 2025

| MD Shamim Jahangir | The Just Energy News

Bangladesh is likely to propose investment deals worth US$2 billion with Indonesia, focusing on the second phase of the Matarbari coal-fired power plant and a land-based LNG terminal, during the upcoming visit of Chief Adviser of the interim government, Prof. Muhammed Yunus, to Jakarta next month.


Officials familiar with the matter said the proposals aim to strengthen bilateral cooperation in the energy sector. The visit will also explore the possibility of a government-to-government (G2G) coal import agreement and seek direct investment in coal and LNG projects in Bangladesh.


“We plan to propose G2G investments in coal projects, LNG imports, and potentially solar power, as part of our efforts to diversify energy sources amid ongoing instability in the Gulf region,” Power and Energy Adviser Dr. Fouzul Kabir Khan told Just Energy News on Friday. He noted that recent coal import tenders faced procedural delays and quality concerns, prompting the government to consider more stable G2G arrangements.


For instance, the contractor for the Matarbari coal-fired power plant, Meghna Group, allegedly supplied adulterated coal, while the Patuakhali coal plant tender attracted only a single biddet, raising concerns and prompting a review of coal supply strategies.


Under Indonesia’s G2G policy, 70 percent of extracted coal is reserved for domestic use, with only 30 percent allowed for export. On July 4, the Power Division sent an office memorandum to the Ministry of Energy proposing joint ventures and direct investment in Indonesian coal mining and supply.


“If Indonesia agrees to invest in the second unit of the Matarbari coal plant, the average cost of electricity generation could drop to Tk 7.50 per unit from the current Tk 8.40,” an energy official said.


Bangladesh also plans to follow up on an earlier memorandum of understanding (MoU) to develop 100MW–500MW solar power projects with Indonesian companies. Additionally, the government will seek Indonesian investment in a Floating Storage and Regasification Unit (FSRU) and a land-based LNG terminal, both part of its long-term LNG import strategy.


In preparation for the high-level visit, the Ministry of Foreign Affairs convened an inter-ministerial meeting chaired by Ambassador Dr. Md. Nazrul Islam, Secretary (Bilateral), to discuss ways to enhance bilateral ties, particularly in the energy sector. The meeting also reviewed prospects for expanding exports of pharmaceuticals, jute, leather goods, ceramics, and light engineering products.


According to trade data, Indonesia exported $3.58 billion worth of goods to Bangladesh in 2023, including palm oil ($1.16 billion), coal briquettes ($1.07 billion), and refined petroleum ($295 million). By contrast, Bangladesh exported $95 million to Indonesia, mainly knit T-shirts ($12.4 million), jute yarn ($11.5 million), and non-knit women’s suits ($9.72 million).


News Link: Bangladesh eyes $2bn energy investment deals with Indonesia

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