Bangladesh receives energy boost

The Asian Development Bank (ADB) has loaned Bangladesh US$ 300 million to help improve the country's energy infrastructure.

The funds will be used to support Bangladesh's Power System Efficiency Improvement Project, and will specifically support the replacement of five ageing generation units at Ashuganj power station in the Chittagong Division of the country, near the Meghna River delta, with a new combined cycle natural gas power plant.

The loan will also finance a 5 MW solar photovoltaic generating system that will connect to the national grid, along with a hybrid wind, solar and diesel system on the island of Hatiya. Streetlights will also be installed or retrofitted with solar and light emitting diode technology in the cities of Barisal, Chittagong, Dhaka, Khulna, Rajshahi and Sylhet.

The Islamic Development Bank is providing co-financing of US$ 200 million and the Government of Bangladesh is adding US$ 81 million for a total project cost US$ 581 million. The project is due for completion by June 2017.

The ADB said critical power shortages were undermining Bangladesh's economy. Ageing thermal plants, inadequate natural gas supplies and lack of diverse power sources have left the country with an estimated gap of over 1200 MW between electricity supply and demand.