Power Grid Company of Bangladesh (PGCB) will soon start installation of necessary equipment for reliable transmission of power as the existing distribution lines have become obsolete causing disruption to power distribution.
Despite having sufficient power generation capacity, power transmission is often disrupted due to the flawed transmission system.
To revamp and restructure the existing power supply line, the government already secured US$970 million loan from China to be used for strengthening its electricity grid although estimated project cost is $1.4 billion dollars and Bangladesh government will funnel rest of the money.
State run PGCB has under taken a project to this effect titled 'Power Grid Network Strengthening Project" which is scheduled to end by 2024.
PGCB officials hope that successful completion of the project will ensure safe, smooth transmission and distribution of electricity in the country.
Talking to The Business Post on Friday, Project Director Sukanto Lal Nag said, this project was undertaken in a bid to ensure sustainable and efficient transmission and distribution of electricity in the country.
He said, "Most of the transmission and distribution lines in the country are outdated which do not guarantee the security of our power sector. Bangladesh is eyeing for an industrial boom in the upcoming days and power sector will play a significant role in this regard. We need to be better prepared to endure safe and sound distribution of electricity in industrial belt and so on."
The implementation of the project will bring a qualitative change to the power transmission system of the country, he added.
Under the project some 41 new substations will be constructed and over 1,000km of new transmission lines will be set up in different parts of the country replacing the existing outdated electricity lines.
The task of implementation was assigned to a Chinese consortium comprising CCC Engineering Ltd, Jiangsu ETERN Co Ltd and Fujian Electric Power Company as China is the major financier of the project.
During the visit of Prime Minister Sheikh Hasina to China in July, 2019, a primary deal was signed between the two countries and China already granted $970 million dollars to finance the project and $690 million will be provided under preferential buyers' credit and $280 million under the government concessional loan.
This project is among the 17 priority projects for which the government sought financial back up from China.
According to the agreement, the rate of interest applicable to the buyers' credit is 3.0 per cent annually coupled with 0.25% management fee and 0.25% commitment fee which many economists rated as inflated interest rate compared to the interest rate of World Bank and other global lenders.
During the visit of the Chinese President Xi Jinping to Dhaka in 2016, China had pledged a credit line of over $25 billion for different infrastructure projects under its Belt and Road initiatives.
sh/wi
