ADB to give $310m loan to improve power supply

The Asian Development Bank (ADB) will provide US$ 310 million in loan to improve Bangladesh's power supply system, and reduce power outages and shortages. It confirmed the assistance Tuesday.
Under the government-formed $1.6 billion fund for the Power System Expansion and Efficiency Improvement Investment Programme, the Manila-based lender would provide the $310 million loan as the second tranche of its total $700 million contribution.
The French lender Agence Française de Développement (AFD), the European Investment Bank (EIB), and the Jeddah-based Islamic Development Bank (IDB) would also provide another $700 milllion credit for the multi-donor programme.
Joint Secretary of the Economic Relations Division (ERD) Saifuddin Ahmed and Deputy Country Director of ADB Dhaka office Stefan Ekelund signed the loan agreement at the donor's office in Dhaka Tuesday.
Under the $1.6 billion fund, the government has a plan to reform and strengthen Bangladesh's power sector, tapping private sector financing, ERD officials said.
The goal is to raise the generating capacity to more than 12,500 megawatt (mw) and the rate of electrification to 68 per cent by 2015.
The $310 million assistance under the second tranche will help increase transmission and distribution capability in the power system. This will allow increased power transfer from Ghorashal to Tongi and raise transmission capability to meet the increasing electricity demand in Dhaka, Chittagong and Sylhet areas.
The investments will also accommodate improved distribution networks in the Dhaka region to meet the increasing demand in the system to ensure cut in load-shedding caused by network constraints by 2018.
The overall Power System Expansion and Efficiency Improvement Investment Programme 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.
Power system and financial management training will be imparted to the staff at sector institutions, and a pilot project with around 200 solar energy-driven irrigation pumps will be established, benefiting around 4,000 poor farming families.
Stefan Ekelund of ADB said: "Increased access to power and energy is critical to further growth and development of Bangladesh."