Dhaka, August 24, 2017—The government of Bangladesh today signed a $59 million financing agreement with the World Bank to improve reliability and efficiency of the country’s power system, with the aim to provide reliable and low cost electricity to citizens.
The Power System Reliability and Efficiency Improvement Project will modernize and upgrade Bangladesh’s power system, including installing new software and hardware. This will help the country reduce power outages and load-shedding significantly. The project will enable an automated and integrated operation of the power system and an optimal dispatch of electricity, resulting in reduction of fuel use.
“In the last five years, Bangladesh has doubled its electricity generation capacity to meet the growing demand. Today, about 78 percent of the population have access to electricity, ” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “With rapid increase in the size of the power system, the country now faces challenges of ensuring quality and reliability of electricity supply. The project will help improve efficiency and reliability of the power sector. Reliable and low-cost power supply will make doing business easier and benefit households.”
The project will benefit the government with fiscal savings, as a modern power generation system will cut down fuel use. The project will also lower greenhouse gas emissions by reducing the use of carbon-intense fuel in electricity generation. Further, the project will construct and rehabilitate a 40-km transmission line.
“The government is committed to provide electricity to all. The financing will help remove bottlenecks and optimize the national power system to ensure affordable and round-the-clock electricity,” said Kazi Shofiqul Azam, Secretary, Economic Relations Division, Government of Bangladesh.
The agreement was signed by Kazi Shofiqul Azam and Qimiao Fan on behalf of the Government of Bangladesh and the World Bank, respectively, at the Economic Relations Division.
The credit from the World Bank’s International Development Association’s scale-up facility will have a 30-year term, including a nine-year grace period. The World Bank was among the first development partners to support Bangladesh after independence. Since then, the World Bank has committed over $26 billion grants and interest-free credits to the country. In recent years, Bangladesh has been one of the largest recipients of the World Bank’s interest-free credits.