ADB provides $160m to boost energy supply

The Asian Development Bank (ADB) and the government of Bangladesh on Tuesday signed a $160 million loan agreement to help upgrade Dhaka's power distribution network, enhance its efficiency, and increase energy supply.

Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky and ADB Deputy Country Director Jiangbo Ning signed the loan agreement on behalf of Bangladesh and ADB, respectively, at a ceremony at ERD in Dhaka Tuesday.

The Dhaka Power System Expansion and Strengthening Project will construct eight substations and install more than 100 kilometers of climate- and disaster-resilient underground cables and 150 kilometres of overhead lines, said a media release.

The project will help the Dhaka Electric Supply Company Limited (DESCO) improve its overall operations to meet the globally accepted standards, establish a safeguards unit covering environmental, social, and gender issues that will ensure internationally accepted standards are met for all future infrastructure projects, and adopt environment-friendly technologies such as alternative insulating gases for future gas-insulated substations instead of sulfur hexafluoride following a detailed feasibility study on alternative insulating gases.

"The assistance will ensure reliable, efficient, and improved quality electricity supply to 200,000 new and 1.1 million existing residential, commercial, and industrial customers as well as the new airport terminal in Dhaka," said Deputy Country Director Jiangbo Ning. "It will also promote the climate agenda by helping to optimize power usage, reduce wastage, modernize aged and overloaded power infrastructure, and reduce at least 14,700 tons of carbon dioxide emissions every year."

Through an attached technical assistance, the knowledge and capacity of the Dhaka Electric Supply Company Limited and related government agencies to handle public-private partnerships (PPPs) will be enhanced through a capacity development program and policy recommendations to strengthen PPP processing and implementation and the handling of future commercial financing.

The $750,000 technical assistance grant will be funded by the Republic of Korea e-Asia Knowledge Partnership Fund, administered by ADB.