25 Million Bangladeshis to Benefit from World Bank Support for Rural Transport and Electrification

October 23, 2012

DHAKA, October 23, 2012The Government of Bangladesh today signed two credit agreements with the World Bank: US$ 302 million for the Second Rural Transport Improvement Project (RTIP II) and US$ 155 million for the Second Rural Electrification and Renewable Energy Development Project (RERED II).  These no-interest credits from the International Development Association (IDA) have 40 years to maturity with a 10-year grace period and a service charge on disbursed funds of 0.75 percent.

Building on the success of earlier projects, RTIP II and RERED II will improve the conditions of roads and inland waterways as well as expand electricity coverage in rural areas. RTIP II will help maintain and improve around 5,250 km of union parishad and upazilla roads in 26 districts. The RERED II will help install around 550,000 solar home systems to provide electricity in remote villages that cannot be reached by the national grid.

“Together the World Bank and the Government are doing exactly what we should do: scale up interventions that deliver development results for millions of rural Bangladeshis,” said Ellen Goldstein, World Bank Country Director for Bangladesh. “These are proven models that work.  Investing in roads and electricity in rural areas empowers men, women and children, leading to job and income creation and more accessible and effective social services.”

Better rural roads and waterways open up economic opportunities for villagers and improve access to markets, schools and health facilities. The second RTIP will benefit approximately 22 million people living near roads and waterways that will be rehabilitated and maintained under the project. The first RTIP project helped improve more than 2,500 km of rural roads. A study has shown that the average travel time and cost was reduced by more than 50 percent for roads maintained by RTIP I, ending in June 2012.

RERED II will provide electricity to an additional 2.5 million people through installation of solar home systems in remote villages where grid electricity is not an option. The project also aims to provide clean cooking solutions for over 1 million rural households. Access to clean cooking benefits women and children in particular, reducing respiratory diseases. The project will also support the distribution of energy-efficient CFL bulbs that will help reduce peak electricity demand in the country.  Thanks to the first RERED project, solar energy systems have become a viable option for electrification in remote rural areas and more than 1.5 million solar homes systems have already been installed. Today, more than 50,000 solar home systems are installed every month in Bangladesh, making it the fastest growing solar home systems program in the world. 

“Supporting the Government’s Sixth Five Year Plan, the two projects directly contribute to our vision of inclusive growth benefiting all citizens of Bangladesh,” said Mr. Iqbal Mahmood, Senior Secretary, Economic Relations Division, Government of Bangladesh. “We are pleased to be building on the success of the first round of projects that have developed roads and provided affordable electricity to rural villages in Bangladesh. I believe these follow-on projects will further strengthen the backbone of the rural economy.”

Mr. Iqbal Mahmood, Senior Secretary, Economic Relations Division and Ms. Ellen Goldstein, Country Director, World Bank Bangladesh signed on behalf of the Government of Bangladesh and the World Bank respectively, at the Economic Relations Division.

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