ADB board approves $465m loan for Bangladesh today

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FE Report
The Asian Development Bank (ADB) will place the US$465 million loan proposal for Bangladesh's power sector at its board meeting in Manila today (Tuesday) for approval, sources said.
After approval of the loan by the ADB Board, the donor agency will disburse the fund to Bangladesh government, which will be utilised for power generation and improvement of electricity transmission and distribution systems.
A senior Economic Relations Division (ERD) official Monday told the FE, "The ADB will place the $465 million loan proposal in its Board meeting tomorrow (Tuesday) and we are expecting the loan to be approved then."
The government will install two power generation plants, having capacity of 150-megawatt (MW) each, at Sirajganj and Khulna, three power transmissions lines and six distribution lines through the ADB loan.
According to official sources, the state-owned Electricity Generation Company Bangladesh (EGCB) will set up the proposed two power plants at Sirajganj and Khulna, the Power Grid Company of Bangladesh (PGCB) will install three transmission lines, the Dhaka Electric Supply Authority (DESA) and Dhaka Electric Supply Company Limited (DESCO) will implement four and two distribution projects respectively.
Meanwhile, the proposed loan for Bangladesh's power sector of the 67-member donor agency has been awaiting approval of the ADB board for more than seven months.
The negotiations between the ERD and the Manila-based lender for the proposed credit has been completed in September last year and loan agreement was to be signed within November after approval at the Bank's board.
However, the donor agency has gone back from their earlier position and started monitoring of the interim government's activities closely instead of placing the proposed loan at the Board for approval, the official in the ERD said.
In the meantime, the ADB sent missions several times from its headquarters to review the reform of the power sector and activities of the interim government in Bangladesh.
About the terms and conditions of the $465 million loans, a senior ERD official said that out of the total proposed $465 million credit, the $400 million would be heard-term and the remaining $65 million would be concessional (soft term).
After signing the loan deal, the installation process of the power plants will start in full swing aiming at additional 300mw power generation by the year 2010, the official opined.
Apart from the aforesaid project, the ADB is also funding for installing a peaking power plants is to be set up at Siddhirganj having a generation capacity of 240MW.