ADB-led lenders readying $.14 billion for Bangladesh power sector

• 12 years ago (2012-10-13)
• David Flin

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Four lenders, including the Asian Development Bank (ADB), are readying a fund worth about $1.4 billion for development of the Bangladesh power sector. Negotiations for the loan package were completed successfully last week with the ADB, according to a senior official at the Economic Relations Division (ERD).

Under the terms of the package, the ADB will provide $700 million, while the Islamic Development Bank will lend $380 million, the European Investment Bank (EIB) $200 million, and the French donor agency AFD around $100 million. The Bangladesh government will also contribute $220 million, to support a five-year development programme costing $1.6 billion for the power sector.

The ERD said that a framework financing agreement will be signed with the four lenders “this current year”. The ADB will administer the fund to be disbursed in three tranches over the next three years.

The government said that its $1.6 billion Power System Expansion and Efficiency Improvement Programme will boost power generation, expand transmission and distribution lines, and upgrade some plants to enhance their capacity over five years. It said that solar power will be used to drive irrigation, and new power plants would be built under the programme.

In the first phase of the programme, the Bangladesh Power Development Board (PDB) will upgrade the generation capacity of the 150 MW Khulna plant, the 150 MW Shahjibazar plant, the 100 MW Baghabari plant, and the 150 MW Sylhet plant. In the second phase of the programme, the state-owned power transmission company and distributors will expand the electricity supply lines in a bid to upgrade the supply system. In the third phase, the government-owned power generation companies will build additional power generation plants.