$300m ADB loan to expand power lines
The Asian Development Bank has approved a €271.84 million, or $300 million, loan for a project to expand transmission lines in greater Dhaka and the western zone of Bangladesh.
Besides, the Asian Infrastructure Investment Bank is considering $200 million in co-financing to finance transmission lines, substations, and an enterprise resource planning system.
The assistance also comprises a $750,000 grant from China’s Poverty Reduction and Regional Cooperation Fund (PRC Fund), the Manila-based lender said in a statement on Friday.
“As the Bangladesh economy grows and the power grid becomes more congested,” said ADB Principal Energy Specialist Aiming Zhou, adding that the upgradation and expansion of the country’s transmission network was crucial for sustaining the growth and reducing poverty.
“The project will improve the reliability and efficiency of the electricity supply in the greater Dhaka and western zone of Bangladesh, helping to bolster economic growth and achieve the government target of electricity for all by 2021.”
Bangladesh has yielded an average annual gross domestic growth of 6.5 percent during fiscal years 2009 to 2018 and achieved lower middle-income country status in FY2015. Despite its economic success, Bangladesh faces major challenges in maintaining growth trends and reducing poverty because of infrastructure deficiencies in the energy sector and elsewhere.
Despite considerable progress in increasing generation capacity to meet the growing demand for electricity, the sector is still characterised by recurring power supply shortages, an increasing number of interruptions, and damaging voltage fluctuations.
The Dhaka and Western Zone Transmission Grid Expansion Project builds on the 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 western zones.
The new project will continue to fund high-level advanced conductors, which 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 project will construct 40 kilometres of transmission lines and 4,450 megavolt-ampere (MVA) of substations in greater Dhaka, as well as 368km of transmission lines, 3,070 MVA of substations, and 20 bay extensions in the western zone, the statement said.
It will also establish an enterprise resource planning system, and a drone inspection centre to improve operation efficiency and enhance workspace safety in the executing agency, the Power Grid Company of Bangladesh.
The government and the executing agency will contribute $249.25 million for the $750 million-project, which is due for completion at the end of June 2024.
