German bank Kfw set to provide Euro 60m for power sector

German development bank Kfw is set to emerge as a key development partner of Bangladesh by providing Euro 60 million (US$ 82.31 million) worth of assistance for developing the power sector, officials said Friday.
Economic Relations Division (ERD) officials said the German bank for the first time was providing Euro 45 million in loan and Euro 15 million as grant for Bangladesh's development.
"For the first time, Kfw is coming forward with credit for Bangladesh. It is good news for the country that a new window of lending facilities is opening up," additional secretary of ERD Abul Mansur Md. Faizullah said.
Earlier, Kfw, the German development bank, only provided grants for the development of Bangladesh's different sectors, he told the FE.
Germany, the largest Bangladesh ready-made garment importer in the European Union (EU), usually provides the country with grants through its aid windows Kfw and GIZ.
A Power Division official said the state-run Power Grid Company of Bangladesh (PGCB) would receive Euro 60 million in financial support from Kfw aimed at improving electricity transmission lines in the western zone of the country.
The electricity transmission grid in the western zone would be made better as some of the lines and sub-stations have already become worn-out due to their old age.
ERD additional secretary Mr Faizullah said Bangladesh was heavily dependent on three lenders-the World Bank (WB), the Asian Development Bank (ADB) and Japan.
From now on Kfw could be an important development partner for Bangladesh, he added.
Since Bangladesh needs investment worth billions of dollars every year to improve its infrastructure and the energy sector, the emergence of Kfw as a lender has opened up the new window for the country, he added.
"We are already discussing with the German development bank expansion of its investment and concessional loans for Bangladesh's different development works, especially in the fields of infrastructure and energy sector improvement," Mr Faizullah said.

According to Power Division, the aggregated investments in the development of Bangladesh's power generation, transmission and related facilities would require US$ 69.5 billion. On an average, the country needs an investment of $3.5 billion every year.