The Asian Development Bank (ADB) will provide 310 million U.S. dollars in loans to improve Bangladesh's power supply system and reduce power outages and shortages, according to an agreement signed here Tuesday.
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 U.S. dollars, with ADB contributing 700 million U.S. dollars, said the Manila-based lender in a statement.
It said the other cofinanciers supporting the program include the French Development Agency (Agence Franaise de Development), 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 percent by 2015, it added.
Saifuddin Ahmed, joint secretary of Bangladesh's Economic Relations Division, and Stefan Ekelund, deputy country director and officer-in-charge of ADB's Bangladesh Resident Mission, signed the agreement, on behalf of their respective sides.
According to the statement, the assistance under the second tranche will help increase transmission and distribution capability in the power system.
This will increase transmission capability to satisfy the increasing demand in Dhaka and other 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, it added.
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, said the statement.
It said 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.