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Coal Power Generation Company Bangladesh is to borrow $3.7bn from the Japan International Cooperation Agency (JICA) and the Bangladesh government in order to build two coal-fired power plants aimed at helping Bangladesh resolve its power shortage issues.

The company has agreed a $4.6bn deal to build two 600 MW coal-fired power plants on an island in the Bay of Bengal, 32 kilometres from the beach resort of Cox’s Bazar.

Two Japanese companies, Sumitomo Corp and Marubeni Corporation, have bid to participate in the construction project.

In Bangladesh, daily blackouts last as long as five hours. The country produces 8,000 MW of electricity, but demand far exceeds supply, with a daily deficit of up to 1,500 MW.

Nasrul Hamid, junior minister for power, energy and mineral resources, said unless the country can boost its energy production it will fail to achieve a target of becoming a middle-income country by 2021.

Construction on the two power plants is scheduled to start in March 2016, with operations set for August 2022.

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