The World Bank (WB) will offer US$78.4 million in loan to facilitate off-grid electricity supply to Bangladesh's remote villages, where the on-grid power is absence.
The global lender signed a loan agreement with the Economic Relations Division (ERD) Monday in the city to provide the loan under the Rural Electrification and Renewable Energy Development II (RERED-II) Project.
Additional Secretary of the ERD Arastoo Khan and Acting WB Country Head in Bangladesh Christine E. Kimes signed the agreement at the ERD in the city.
The RERED-II project will help install an additional 480,000 solar home systems (SHSs) that has emerged as a viable electrification option for areas without on-grid electricity access.
Currently, only 42 per cent of the people in rural Bangladesh have access to electricity.
Furthermore, the dispersed nature of rural settlements and the numerous rivers that crisscross the country make grid electrification in many areas difficult and expensive. Off-grid renewable energy, like SHS, has thus become the only option for electrification for millions living in the remote rural areas of Bangladesh.
Implemented through a public-private partnership, the SHS programme is currently installing over 70,000 systems every month, making it the fastest growing renewable energy generation segment in the world.
In Bangladesh 3.0 million SHS have already been installed with support from the World Bank and other development partners.
WB acting head in Bangladesh Ms Kimes said: "This is a proven model that works. Investing in electricity in rural areas empowers both men and women, leading to increased income and growth opportunities and reducing poverty."
The first phase of the RERED project approved in 2002 and now second phase of the RERED project has so far provided clean energy access to over 414,000 households benefiting over 2.0 million people through installation of SHS in remote villages. Over 1,450 biogas plants and 40 solar irrigation pumps have already been supported under the project.
ERD Additional secretary Mr Khan said: "The benefits of using solar homes systems include increased study time for children, empowerment of women through knowledge from TV viewing, income generation from mobile phone recharging services, as well as contribution to emissions reduction as a result of kerosene replacement."
The project has also started dissemination of improved cook stoves with a target to provide clean cooking solutions to over 1.0 million rural households. Access to clean cooking benefits women and children in particular, reducing respiratory diseases.
The WB credit from its soft-arm International Development Agency has 40 years to maturity, including a 10-year grace period; and carries a service charge of 0.75 per cent.
