WASHINGTON, November 13, 2015 - The World Bank today approved an additional $177 million financing with the overall aim to increase reliable, low-cost electricity supply in Bangladesh. The additional financing will enable the completion of construction of a 335 megawatt combined cycle power plant at Siddhirganj, near Dhaka.
The combined cycle technology allows the plant to produce higher energy with lower gas consumption. This cleaner technology reduces carbon emission while ensuring higher thermal efficiency. The plant will deliver at least 2.49 billion kWh annually, which accounts for 6 percent of the total electricity delivered to the national grid.
“Despite increased power generation capacity, Bangladesh still faces significant outages during the peak demand hours. Inadequate power supply is affecting families, undermining competitiveness and hindering growth,” said Martin Rama, Acting World Bank Country Director for Bangladesh. “This additional financing will add new power generation capacity for Bangladesh and increase efficient use of its scarce domestic gas supplies.
In 2008, the World Bank provided $350 million to construct a 300 megawatt gas turbine power plant in Siddhirganj. In the face of increasing power demand and gas shortages, the government decided to convert the peaking power plant to an energy-efficient 335 megawatt combined cycle power plant. The additional financing will fill the financing gap for constructing the power plant. The plant is expected to start commercial operation in 2016.
“According to the 2013 World Bank Enterprise Survey, power outages resulted in an output loss of nearly 3 percent of GDP in that year. About 65 percent of Bangladeshi firms invest in back-up generation, adding costs to doing business. Moreover, the demand for energy is projected to rise nearly five-fold by 2030,” said Md. Iqbal, Task Team Leader, Siddhirganj Power Project, World Bank.
In addition to financing the construction of the power plant, the project will also help strengthen the institutional capacity of the three implementing agencies: Gas Transmission Company Limited (GTCL), Electricity Generation Company of Bangladesh (EGCB), and Power Grid Company of Bangladesh (PGCB).
The credit is from the International Development Association (IDA), the World Bank’s concessional lending arm. The terms are based on 38 years maturity with a 6-year grace period and a service charge of 0.75 percent.