ADB provides $300m for power sector

The government is going to expand power transmission lines in greater Dhaka and the western zone of Bangladesh to ensure more power transfer at lower energy losses. 

To this end, the government signed an agreement with Asian Development Bank for $300 million loan for the project at a ceremony on Wednesday in the capital.

The project will help achieve the government target of electricity for all by 2021 by improving the reliability and efficiency of the electricity supply in the Greater Dhaka and the western zone of Bangladesh.

Monowar Ahmed, Secretary, Economic Relations Division (ERD), and Manmohan Parkash, Country Director, ADB, signed the agreement on behalf of Bangladesh and ADB, respectively.

Besides ADB’s loan, the Asian Infrastructure Investment Bank is considering $200 million in co-financing to fund transmission lines, substations, and an enterprise resource planning system. The assistance also comprises a $750,000 grant from the People’s Republic of China’s Poverty Reduction and Regional Cooperation Fund (PRC Fund).

ADB Country Director Manmohan Parkash said “Upgrading and expanding the transmission network is crucial to improve power supply efficiency after significant improvement in power production in Bangladesh”. 

The project builds on ADB’s previous work in Bangladesh’s power sector, including the Southwest Transmission Grid Expansion project approved in 2018 to address continuing deficiencies in the transmission system by providing more efficient, reliable power to consumers in the Greater Dhaka and the western zone.

The assistance for the Dhaka and Western Zone Transmission Grid Expansion Project will be utilized to construct 40 kilometers (km) of transmission lines and 4,450 megavolt-ampere (MVA) of substations in Greater Dhaka, as well as 368 km of transmission lines, 3,070 MVA of substations, and 20 bay extensions in the western zone. 

It will also establish an enterprise resource planning system, and a Drone Inspection Center to improve operation efficiency and enhance workspace safety in the executing agency, the Power Grid Company of Bangladesh Limited.

The new project will continue to fund high-level advanced conductors (high temperature low sag), that were used in the 2018 project, to allow more power transfer at lower energy losses. With assistance from the PRC Fund, the project will introduce drone technology to Bangladesh as an innovative new technology to improve operational efficiency and safety.

The Government and executing agency will contribute $249.25 million equivalent toward the $750 million total cost of the project, which is due for completion at the end of June 2024.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion.