The World Bank would provide US$600 million, the largest single loan in Bangladesh, to facilitate improving the country's rural electrification and to connect 25 million consumers with the grid-power.
The loan has been confirmed by the Washington-based lender Thursday in Dhaka signing a credit deal at the Economic Relations Division (ERD) office.
Mohammad Mejbahuddin, Secretary of the ERD, and Christine E. Kimes, Acting Head of the World Bank Bangladesh, signed the agreement Thursday.
With the WB-fund, the state-owned Rural Electrification Board (REB) and the Power Grid Company of Bangladesh implement two separate projects to upgrade the electricity supply system in the villages.
The WB-funded project with the will support construction of new electricity distribution lines and new substations, while upgrading existing lines in the rural areas of Dhaka, Chittagong and Sylhet divisions, to reduce system losses and enhance the capacity of the rural electricity network in Bangladesh.
The project will reduce technical losses in the rural grid electricity system and will make available more energy to consumers, thus improving the quality of supply for 25 million people in rural Bangladesh.
It will contribute to increasing the capacity of the transmission and rural distribution system to supply and distribute additional power to rural consumers as additional generation becomes available, WB said.
"Only 42 percent of the rural population currently has access to electricity in Bangladesh, leaving about 13 million rural households without electricity," said Christine E. Kimes.
"The Government of Bangladesh has a vision of providing universal access to electricity and we welcome this project that will strengthen the rural network and improve the efficiency of the power system," said ERD secretary Mohammad Mejbahuddin.
The WB said the rural electrification program of Bangladesh is recognized globally as one of the most successful programs in the world. However, over the years the transmission and distribution network has become overstretched.
The WB credit from its soft-window-- International Development Association (IDA), has 40 years to maturity, including a 10-year grace period; and carries a service charge of 0.75 percent.
