The government on Tuesday signed a $310-million loan deal with the Asian Development Bank (ADB) to give a further boost to the country’s power supply system and reduce power outages.
The assistance is the second tranche of ADB financing under an overall multi-donor-supported project titled ‘Power System Expansion and Efficiency Improvement Investment Program’ of $1.6 billion with the ADB contributing $700 million.
The other co-financiers supporting the program include Agence Française de Développement, the European Investment Bank, and the Islamic Development Bank.
Joint Secretary of Economic Relations Division (ERD) Saifuddin Ahmed and Deputy Country Director and Officer-in-Charge of ADB’s Bangladesh Resident Mission Stefan Ekelund signed the agreement on behalf of Bangladesh and the ADB respectively at a ceremony at the Bangladesh Resident Mission, ADB at city’s Sher-e-Bangla Nagar.
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 percent by 2015.
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 increase transmission capability to satisfy the increasing demand in Dhaka, Chittagong and Sylhet regions.
The investments will also allow improved distribution networks in the Dhaka region to meet the growing demand in the system so that network constraints cannot cause load-shedding 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 tonnes per year when the project is completed in 2018.
The 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, benefiting 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.
“Increased access to power and energy is critical for further growth and development of Bangladesh,” he added.
$310mn loan deal signed with ADB