AIIB approves $200m loans to increase BD's electricity access

FT ONLINE

The Asian Infrastructure Investment Bank (AIIB) has approved a $200 million loan to Bangladesh to increase access to electricity and improve service efficiency in Dhaka and the country’s western region.

By 2025, the Dhaka and Western Zone Transmission Grid Expansion Project is expected upon completion to reduce the number of annual power outages to 15 (from 60), reduce transmission loss to 2.50 percent (from 2.76 percent) and add 7,440 megavolt-amperes of power transmission capacity, the AIIB said in a statement on Tuesday.

The project, which will lead to the construction of 408 kilometres of transmission lines, will also have a positive environmental impact, reducing average annual carbon dioxide emissions by 455,785 tons.

“AIIB’s investment gives much-needed financing to provide affordable, reliable and modern energy, especially in areas where people lack basic infrastructure,” said DJ Pandian, AIIB vice president and chief investment officer.

“The project will also help the power sector tackle climate change impacts, making the grid more climate-resilient.”

About 22 percent of the population of Bangladesh still lacks access to electricity although the government has implemented various programmes to meet growing demand for power. It is estimated that poor power supply has resulted in about 3 percent loss to Bangladesh’s gross domestic product annually, with significant sums spent on diesel generators for backup.

The project is co-financed with the Asian Development Bank. It is expected to help Bangladesh achieve its target to provide electricity for all by 2021 and supply uninterrupted electricity to industries by 2020.