Bangladesh faces a major challenge in providing modern and affordable energy, while suffering from recurring generating capacity shortages in the power sector
The Asian Development Bank (ADB) will provide $500 million in loans for the construction of an 800 megawatt (MW) power plant in Khulna.
After the ADB Board of Directors approved the loan on Tuesday, the bank’s energy specialist said that the Rupsha Power Plant will be the first of its kind in Bangladesh, vastly increasing the availability of efficient and cleaner energy by June 2022.
“By providing additional electricity supply to about 300,000 consumers, the plant will stimulate business expansion and create new job opportunities,” Aziz Yusupov said in a press release.
Bangladesh faces a major challenge in providing modern and affordable energy, while suffering from recurring generating capacity shortages in the power sector.
In financial year 2017, peak demand was estimated at 10,400 MW while available generation capacity was just 9,479 MW.
Net peak demand of power is expected to exceed 13,300 MW by 2020 and 19,900 MW by 2025, while existing generation facilities will gradually be decommissioned and need replacements.
Recognizing the need to sustain Bangladesh’s economic momentum, the government has prepared an investment plan to increase power generation capacity and improve the transmission and distribution network, aiming to achieving universal access to grid-connected electricity by 2021.
The ADB-financed project will ensure that Rupsha Power Plant uses the latest combined cycle technology, which offers the highest efficiency to convert gas to electricity.
It will also use the most advanced water treatment processes to purify and recycle liquid waste at the end of the industrial process, leaving zero discharge.
To supply gas to Rupsha Power Plant, 12 kilometres of gas distribution pipelines will be laid and 29km of high capacity transmission lines constructed to transfer the electricity to the grid.
The ADB loan approved on Tuesday will also finance the construction of a 230-kilovolt switchyard at the power plant.
To ensure adequate institutional capacity, the project will strengthen the executing agency, the North-West Power Generation Company Limited.
The total cost of the project is $1.14 billion, with the Islamic Development Bank contributing $300 million in co-financing and the government contributing $338.5 million on top of ADB’s support.
Grant financing of $1.5 million will also be provided from ADB’s Japan Fund for Poverty Reduction, funded by the government of Japan, to improve living standards in nearby communities.