Dhaka, Bangladesh (BBN) – The World Bank (WB) has approved US$172 million in loan for Bangladesh to support the installation of 630,000 solar home systems and renewable energy mini-grid schemes in rural areas.
The credit line is an additional financing to the ongoing Rural Electrification and Renewable Energy Development Project (RERED), following the project’s success in installing solar home systems in rural areas where grid electricity is not economically feasible or hard to reach.
The solar home system component of the RERED project is implemented by the Infrastructure Development Company Ltd (IDCOL), the state-owned financial institution. The IDCOL refinances its partner organizations, mostly non-government organizations (NGOs), to install the solar home systems.
The WB had earlier provided additional financing of $130 million in end 2009. Since December 2009 more than 300,000 solar home systems have been installed.
The credit from the International Development Association, the World Bank’s concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent, a WB statement said.
Only about one-third of rural households have access to electricity with about 16 million households yet to be electrified. Apart from 630,000 new solar home systems by 2012, the additional financing would also be utilized for other options such as mini-grids.
BBN/SSR/AD-06Oct11-1:01 pm (BST)
