The World Bank has approved $560 million for two projects in Bangladesh, to improve reliable power supply and help microenterprises become environmentally sustainable, respectively.
"The World Bank is helping Bangladesh overcome barriers to higher growth. Unreliable power supply and environmentally-unsustainable enterprises hinder a county's competitiveness and poverty reduction efforts," said Zahid Hussain, World Bank acting country director for Bangladesh.
"By improving electricity transmission and helping microenterprises adopt environment-friendly technologies, these projects will help Bangladesh achieve sustainable growth and advance towards upper middle-income country status," he said.
The $450 million Power Transmission Network project will expand the electricity transmission network in the eastern region, covering the greater Comilla and Noakhali areas and part of the greater Chittagong area, said a press release on Friday.
It will provide new electricity connections to 275,000 households and 16,000 agricultural consumers, and reduce power interruptions.
The project will expand the existing grid network by building 13 new substations and rehabilitating an existing one. It will also construct 290km of new and rehabilitate 157km of existing transmission lines.
"In the last decade, Bangladesh has increased its power generation capacity by more than three-fold to 15.8 GW. But, it still has one of the world's lowest electricity consumption rates per person. To meet the growing demand, the government plans to increase power generation to 24 GW by 2021," said Mohammad Anis, World Bank Task Team leader.
"Only investing in generation without upgrading transmission and distribution systems will not meet the demand. The project will enhance transmission capacity, ensure efficient evacuation of power, and improve grid operations," he added
The $110 million Sustainable Enterprise Project (SEP) will help 20,000 microenterprises adopt environmentally-friendly practices. It covers the manufacturing and agribusiness sectors, including leather, mini textiles, and light engineering.
The project will incentivize microenterprise clusters to use cleaner technologies and joint amenities, such as shared recycling or storage facilities. It will provide loans to microenterprises for innovative, environmental-friendly technologies and practices. About 30% of the firms that will benefit are owned by female entrepreneurs.
The credit will be provided by the International Development Association (IDA), the World Bank's concessional lending arm. The Power Transmission Project will receive a scale-up facility credit from IDA, which has a 35-years maturity including a four-year grace period. SEP will receive interest-free IDA credit, which is repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75%.