The funding will be utilised to support the Dhaka and Western Zone Transmission Grid Expansion Project


AIIB offers $200m loan to increase electricity access in Bangladesh. (Credit: Pixabay/Pexels)

Asian Infrastructure Investment Bank (AIIB) has agreed to provide a loan of $200m to Bangladesh to increase electricity access.

The funding will be utilised to support the Dhaka and Western Zone Transmission Grid Expansion Project, which aims to increase the reliability and efficiency of power transmission in Dhaka and Bangladesh’s western zone.

The project will include construction of substations with a total capacity of 7,440 megavolt-ampere (MVA) along with transmission lines of 408km in Dhaka.

The project is expected reduce 455,785 tonnes of CO2 emissions per year and strengthen the institutional capacity of Power Grid Company of Bangladesh (PGCB).

Asian Development Bank is co-financing the project

Upon completion in 2025, the project is expected to reduce transmission loss from 2.76% to 2.50%.

AIIB vice president and chief investment officer D.J. Pandian said: “AIIB’s investment gives much-needed financing to provide affordable, reliable and modern energy, especially in areas where people lack basic infrastructure.

“The project will also help the power sector tackle climate change impacts, making the grid more climate-resilient.”

The project, which is co-financed by Asian Development Bank, is expected to support Bangladesh to achieve its target to supply power for all by next year and supply continuous electricity to industries by this year.

Nearly 22% of the country’s population still lacks access to electricity, despite the various programs implemented by the Government of Bangladesh to meet growing demand for power.

In March last year, AIIB provided $120m loan to Bangladesh to upgrade and expand power transmission system in the Chittagong region.

The loan will support the Bangladesh Power System Upgrade and Expansion Project, which includes the construction and upgrade of more than 46 km of 400kV and 230kV double-circuit transmission lines and associated substations and line bays.