WB grants $500m loan for power supply modernisation

The World Bank (WB) has approved a $500 million fund to help Bangladesh expand and modernise the electricity distribution mechanism and support the sustainable transformation of its electricity system.

The credit, sanctioned on Tuesday, comes from the WB's International Development Association (IDA) with a 30-year term, including a five-year grace period.

In addition, the program also includes a $15 million grant from the Clean Technology Fund, read a press statement.

The Electricity Distribution Modernisation Program aims at delivering improved electricity services to about 40 million people in Dhaka and Mymensingh Division. It will upgrade and construct more than 31,000 km of distribution lines, 157 distribution substations, and related infrastructure, and incorporate measures to increase climate resilience of network infrastructure in 25 rural electric cooperatives (Palli Bidyut Samities) in the Bangladesh Rural Electrification Board (BREB), added the release.

"In the last decade, Bangladesh achieved more than fourfold increase in electricity generation capacity and delivered electricity connections to more than 99% of its population. But the electricity distribution network could not keep pace with the remarkable increase in electricity generation," said Dandan Chen, World Bank acting country director for Bangladesh.

"This program will help modernise and ensure climate resilience of the distribution network, which is the backbone of a secure and reliable power system," he added.

The program will introduce a modern grid system that can support the two-way flow of electricity and information, minimising and recovering quickly from climate and cyber risks, including natural disasters and extreme weather events.

It will also introduce state-of-art technologies such as Supervisory Control and Data Acquisition System and install Advanced Metering Infrastructure.

Including this program, the WB has over $1.8 billion ongoing support in Bangladesh's energy sector, covering generation, transmission, and distribution of power, including from renewable energy sources. Since 1981, the WB has partnered with the BREB to support the government's electrification and access programs.

Bangladesh currently has the largest ongoing IDA program totalling over $14 billion in support. The World Bank has committed more than $35 billion in grants, interest-free and concessional credits to Bangladesh since its independence.