WASHINGTON, October 04, 2011- The World Bank today approved US$172 million to support installation of an additional 630,000 solar home systems and other renewable energy mini-grid schemes.
The US$ 172 million credit is an additional financing to the ongoing Rural Electrification and Renewable Energy Development Project (RERED), following the project’s success in installing solar home systems in rural areas where grid electricity is not economically feasible or hard to reach. The solar home system component of the RERED project is implemented by the Infrastructure Development Company Ltd (IDCOL), government owned financial institution. The partner organizations, mostly non government organizations (NGOs) install the solar home systems. The World Bank had earlier provided additional financing of $130 million in end 2009. Since December 2009 more than 300,000 solar home systems have been installed.
“More than a million homes and shops in remote areas have installed solar home systems with support from the World Bank and other development partners. Such systems are the most suitable for remote and dispersed communities which the grid connection cannot reach.” said Ellen Goldstein, Country Director, World Bank Bangladesh. “The solar home systems have already improved the quality of life of millions of people in Bangladesh and provided opportunities for new village enterprises.’’
Only about one-third of rural households have access to electricity with about 16 million households yet to be electrified. Apart from 630,000 new solar home systems by 2012, the additional financing would also be utilized for other options such as mini-grids.
‘The World Bank has been supporting the Government of Bangladesh to implement a market-based off-grid electrification program since 2002 with IDCOL as the implementing agency. Currently, with support of 30 partner organizations, 40,000 rural families install solar home system every month on average, a rate way beyond our original expectations” said Zubair Sadeque, Team Leader, Rural Electrification and Renewable Energy Development Project, World Bank.
The credit from the International Development Association (IDA), the World Bank’s concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent.