Dhaka, Bangladesh (BBN) – The Asian Development Bank (ADB) and Bangladesh on Monday signed agreements for $616 million in loans to enhance the coverage and reliability of Bangladesh’s power systems.
The aim of the agreement also is to improve the efficiency of the country’s distribution network, said a press statement of the ADB issued today.
Kazi Shofiqul Azam, secretary of the Economic Relations Division (ERD); and Kazuhiko Higuchi, country director of the ADB; signed the loan agreements respectively at a ceremony in Dhaka.
The Power System Enhancement and Efficiency Improvement Project will contribute to the goal of the Government of Bangladesh of providing 100% access to electricity by 2021.
“Nearly one million households, majority in rural areas, will be newly connected through this project,” said ADB Country Director Kazuhiko Higuchi.
“The project will also help more power transmission to the Dhaka region to meet rising demand for electricity in the largest and rapidly expanding growth center in the country,” he added.
The project includes rehabilitation and expansion of over 50,000 kilometers (km) of rural distribution network across the country.
It will also help to construct a 174-km 400 kV transmission link between the southern Bangladesh and Dhaka; and installation of automated control systems for the distribution network in Dhaka.
The project will bring reliable power supply to 950,000 households and commercial users, including 875,000 households in rural areas.
In addition, the project will support project design, investment planning, and institutional strengthening of the power sector agencies.
A $2 million grant from the Japan Fund for Poverty Reduction, financed by the Government of Japan, forms part of the project.
The grant will support establishing small businesses, especially those owned by women, with affordable and stable power supply, as well as promoting women employment in the power sector.
The total cost of the project is $1,059 million.
ADB is providing a market-based loan of $600 million and a concessional loan of $16 million, with the government contributing $441 million.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.