German bank to provide €140.5m to IDCOL

Bangladesh’s renewable energy sector is expected to get a boost with a massive €140.5 million loan funding Germany’s state-owned development bank Kreditanstalt fur Wiederaufbau (KfW).

KfW will provide the loan to Infrastructure Development Company Limited (IDCOL), a state-owned specialised non-bank financial institution that finances renewable infrastructure projects in the country, a senior KfW official confirmed to The Business Post on condition of anonymity.

Of the total loan, €41 million will be given for energy efficiency and €99.5 million for renewable energy projects.

The two parties signed two separate loan agreements to these ends at the Westin Dhaka hotel on Sunday, IDCOL said in a statement.

Under the deals, IDCOL will be acting as the project executing agency to finance companies undertaking energy efficiency and renewable energy measures.

The funds for energy efficiency projects will be used for various purposes, including including energy efficiency extensions or replacement of equipment and machinery. The projects aim to reduce final energy consumption and related carbon dioxide emission by at least 20 per cent, according to the IDCOL statement.

In the meantime, the renewable energy concentrated fund will be used to finance solar irrigation, solar grid-tied, and biogas (domestic and commercial) projects, the statement added.

“I believe, separate agreement signing ceremony is the beginning of something extraordinary for Bangladesh,” said Sharifa Khan, secretary of the Economic Relations Division and chairman of IDCOL.

Also speaking on the deals, Alamgir Morshed, executive director and chief executive officer of IDCOL, said “KfW has been a long-term development partner for IDCOL in financing renewable energy projects.

“It is a great pleasure for us to continue the relationship for energy efficiency and renewable energy projects in Bangladesh. We hope to achieve greater things together for a better tomorrow.”

Meanwhile, Michael Sumser Hellstern, director of KfW Bangladesh, said, “IDCOL has been a key implementing agency for the development of energy efficiency and renewable energy projects in Bangladesh. KfW is looking forward to working with IDCOL in future projects.”