Bangladesh will receive US$ 600 million as concessional financing from the World Bank to improve the quality of electricity supply in the rural areas in the eastern part of the country.
The World Bank Board approved the concessional financing recently for the Rural Electricity Transmission and Distribution Project which has been taken with aims to reduce system losses and enhance capacity in the electricity network in rural Bangladesh.
According to WB, the project will reduce technical losses in the rural grid electricity system and will help to ensure that a greater percentage of electricity generated reaching the rural consumers.
“It will contribute to improve quality and reliability of power supply to 25 million people in rural Bangladesh. The loss reductions targeted under the project will save enough energy to meet the electricity needs of a million people,” the WB said.
“Access to electricity is positively correlated with increase in growth, education and prosperity . . . access to electricity increases income opportunities, particularly for women and it increases women’s mobility and participation in decision- making process, ” said Johannes Zutt, World Bank Country Director for Bangladesh and Nepal.
“By improving efficiency of the system so that more electricity can be reached in the rural areas, the project will contribute to reduce poverty and create employment and economic opportunities for millions of rural people,” Johannes Zutt added.
Only 42 per cent of the rural population currently has access to electricity in Bangladesh, the WB said, adding that the project will support new lines and substations as well as upgrade existing lines in the rural areas of Dhaka, Chittagong and Sylhet divisions.
The development partner said the rural electrification program of Bangladesh is recognized globally as one of the most successful programs in the world.
However, the distribution and transmission system have not kept pace with rapid expansion in the program in recent years, it said, adding that this project will provide support for institutional strengthening of the rural electricity service delivery.
“Board approval of the project is a testament to the World Bank’s continued commitment to the rural electrification program of Bangladesh,” said Zubair Sadeque, World Bank Team Leader for the Rural Electricity Transmission and Distribution Project.
“The project will support the reform action plan for the rural grid electrification program that was developed by the government after extensive consultation with all the concerned stakeholders to ensure the program continues to serve millions of rural people in a cost effective and efficient manner,” he added.
The credits from the International Development Association (IDA), the World Bank’s concessionary arm, have 40 years to maturity with a 10-year grace period; they carry a service charge of 0.75 percent.