The government signed two financing agreements with the World Bank on Tuesday totalling US$ 515 million to help expand the country's electricity transmission network and to improve insurance coverage.
Additional Secretary of the Economic Relations Division, Mahmuda Begum, and World Bank Country Director for Bangladesh, Bhutan and Nepal, Qimiao Fan, signed the agreements.
The $450 million Enhancement and Strengthening of Power Transmission Network in Eastern Region Project will improve electricity supply and reduce load-shedding in the eastern region, covering greater Cumilla and Noakhali and part of greater Chattogram, said a press release.
About 275,000 households and 16,000 agricultural consumers will get new electricity connections.
The project will build 13 new substations and rehabilitate an existing one in the country's eastern part. These will also help integrate renewable energy and new power generation into the grid.
The project will build one 230 kV transmission line through greater Cumilla, and four short distance 132 kV lines in Cumilla and Noakhali.
"In recent years, the government has significantly increased power generation. But only investing in power generation is not sufficient unless that is supported by improvement in transmission and distribution," said Qimiao Fan.
"By supplying uninterrupted power to the Mirsarai Economic Zone, port, airport or other key economic facilities, the project will help unlock private sector growth," he said.
The $65 million Insurance Sector Development Project (ISDP) will help strengthen the regulatory and supervisory capacity of the Insurance Development and Regulatory Authority (Idra), and the country's two state-owned insurance corporations-Sadharan Bima Corporation and Jiban Bima Corporation-by modernizing their systems and business practices.
It will also help enhance the capacity of the Bangladesh Insurance Academy to become a reliable resource for training and research, and thereby address the severe lack of insurance professionals.
"Insurance helps people, especially the poor, and businesses to protect themselves from shocks. But, in Bangladesh, insurance penetration is particularly low: less than 1 percent of the population has insurance coverage. This project will help individuals, families, and businesses increase insurance coverage," added Qimiao Fan.
The loans are from 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-year maturity, including a four-year grace period. ISDP will receive interest-free IDA credit, which is repayable in 38 years, including a six-year grace period, and carry a service charge of 0.75 percent.