Dhaka, Bangladesh (BBN) – The Asian Development Bank (ADB) and the Government of Bangladesh on Tuesday signed an agreement for $310 million in loans to further boost Bangladesh’s power supply system, and reduce power outages and shortages.
The assistance is the second tranche of ADB financing under an overall multi-donor-supported project entitled Power System Expansion and Efficiency Improvement Investment Program of $1.6 billion, with ADB contributing $700 million. The other cofinanciers supporting the program include Agence Française de Développement, the European Investment Bank, and the Islamic Development Bank.
The investments are part of a broader government plan to reform and strengthen the power sector, tapping private sector financing. The goal is to raise generating capacity to more than 12,500 megawatts and the rate of electrification to 68% by 2015.
Saifuddin Ahmed, Joint Secretary, Economic Relations Division (ERD) and Stefan Ekelund, Deputy Country Director and Officer-in-Charge of ADB’s Bangladesh Resident Mission, signed the agreement, on behalf of Bangladesh and ADB respectively, at a ceremony at the Bangladesh Resident Mission, ADB, Sher-e-Bangla Nagar, Dhaka on the day.
The assistance under the second tranche will help increase transmission and distribution capability in the power system. This will allow increased power transfer from Ghorasal to Tongi and to increase transmission capability to satisfy the increasing demand in Dhaka, Chittagong and Sylhet areas. The investments will also allow improved distribution networks in the Dhaka region to meet increasing demand in the system to ensure no load-shedding due to network constraints by 2018.
The overall Power System Expansion and Efficiency Improvement Investment Program will connect 450,000 households to the power grid and reduce carbon emissions by almost 2.5 million tons per year when the project is completed in 2018. Power system and financial management training will be given to staff in sector institutions, and a pilot project with around 200 solar energy-driven irrigation pumps will be established, benefitting around 4,000 poor farming families.
“Deficiencies in power generation, supply and distribution are constraining businesses and undermining people’s quality of life, with poor communities suffering the most,” said Stefan Ekelund, Deputy Country Director and Officer-in-Charge of ADB’s Bangladesh Resident Mission. “Increased access to power and energy is critical for further growth and development of Bangladesh.”
BBN/SSR/AD-11Feb14-3:25 pm (BST)
