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WB lends $600m to improve rural electricity supply

  • Published at 09:37 pm June 19th, 2014

Bangladesh received $600m credit from World Bank (WB) to improve the quality of electricity supply for 25m people in the rural areas of the eastern part of Bangladesh.

The credit for the Rural Electricity Transmission and Distribution Project (T&D) is from the International Development Association (IDA), the WB Group’s soft loan arm, says a WB press release yesterday.

The IDA credit has 40 years of maturity, including a 10-year grace period; and carries a service charge of 0.75%.

To this effect, Economic Relations Division Secretary Mohammad Mejbahuddin and acting head of World Bank, Bangladesh Christine E. Kimes signed the deal on behalf of their respective organisations.

The project will support construction of new lines and new substations, while upgrading existing lines in the rural areas of Dhaka, Chittagong and Sylhet divisions, to reduce system losses and enhance the capacity of the rural electricity network in Bangladesh.

“Only 42% of the rural population currently has access to electricity in Bangladesh, leaving about 13m rural households without electricity,” said Kimes. The project will reduce technical losses in the rural grid electricity system and will make available more energy to consumers, thus improving the quality of supply for 25m people in rural Bangladesh.

It will contribute to increasing the capacity of the transmission and rural distribution system to supply and distribute additional power to rural consumers as additional generation becomes available.

The rural electrification program of Bangladesh is recognised globally as one of the most successful programmes in the world.  However, over the years the transmission and distribution network has become overstretched.  This project will provide support for upgrading the network as well as strengthening the institutional capacity of the rural electricity service delivery.