WB to provide $515m loan
Rural power supply
FE REPORT | Friday, 1 July 2022
The World Bank (WB) will provide $515 million assistance in helping rural Bangladeshi people get uninterrupted electricity supply.
The loan will support digitisation and modernisation of 25 palli bidyut samitis (rural electricity cooperatives) in Dhaka and Mymensingh divisions and reduce power system losses by over 2.0 per cent.
The Washington-based lender will provide the loan from Scale-up Facility (SUF) Fund, a hard-term fund compared to its concessional window IDA (International Development Association).
Economic Relations Division (ERD) secretary Fatima Yasmin and WB acting country director in Bangladesh Dandan Chen signed the agreement in Dhaka on Tuesday.
The WB in a statement says the loan will help increase the Bangladesh Rural Electrification Board (BREB)'s delivery of electricity by 6,790 GWh while improving climate resilience of the system.
The BREB programme will support solar metering connections for more than 100 customers, bringing 150-megawatt of new rooftop solar capacity onto the grid.
It will improve and construct 31,000-kilometre distribution lines and deploy 200,000 advanced meters.
In addition, the BREB will help the strengthen battery energy storage systems (BESS) and distribute renewable energy through preparation of a roadmap for deployment.
This will lead to an annual reduction of carbon emissions by 41,400 metric tons, according to the WB.
Ms Yasmin says clean and reliable power generation can help rural communities boost productivity and cope with events brought on by climate change.
Through this program, Ms Chen says, new and emerging technologies will further strengthen the efficiency and reliability of electric supply in Bangladesh to meet the need for faster economic growth.
The $515-million financial agreement includes a $15-million grant from the Clean Technology Fund to support the BESS. The maturity of the loan is 35 years, including a five-year grace period.
The SUF loan is a LIBOR-based credit whose interest rate depends on the market demand. Currently, Bangladesh has the largest ongoing IDA programme totalling $14.7 billion.
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