Dhaka, Bangladesh (BBN)- The Asian Development Bank (ADB) and the Bangladesh government on Wednesday signed technical assistance grant agreements of $3.3 million to provide renewable energy in rural areas with no access to grid electricity.

 The grant will provide $25 subsidy per solar home systems (SHS) to a total of 80,000 low-income end-users. The assistance will also promote biomass, biogas, and wind as alternative sources of energy. In addition, the grant will help IDCOL improve its administrative and monitoring capacities.

The grant assistance supplements a $33 million subproject promoting renewable energy under the $165 million Public-Private Infrastructure Development Facility project approved by ADB in 2008.

Asian Clean Energy Fund established by the Japan government will provide $2,000,000 while ADB’s Climate Change Fund will provide $1,300,000 to make the total grant amount of $3.3 million.

Saifuddin Ahmed, Joint Secretary, Economic Relations Division (ERD); Islam Sharif, Executive Director and Chief Executive Officer, IDCOL; and Thevakumar Kandiah, Country Director of ADB’s Bangladesh Resident Mission, signed the agreements on behalf of Bangladesh, and ADB respectively, at a ceremony at Sher-e-Bangla Nagar, in the capital Dhaka. Takanori Uehara, Minister and Deputy Chief of Mission, Embassy of Japan, was also present.   

“The assistance will support Bangladesh’s efforts to increase access to electricity in remote rural areas and to reduce carbon emissions by overcoming market barriers for renewable energy development”, said Thevakumar Kandiah, Country Director of ADB’s Bangladesh Resident Mission.

The IDCOL estimates that each SHS saves at least $61.80 worth of kerosene every year and reduces carbon dioxide emissions by 375 kilograms (kg) annually as a result. Therefore, the 80,000 new SHSs to be installed through this grant assistance will bring a reduction of about 27,600 tons of carbon dioxide emissions a year.

BBN/SSR/AD-29June11-12:38 pm (BST)