AIIB stated that the loan will support the Bangladesh Power System Upgrade and Expansion Project, which will support 4 million people living in the Chittagong region.

The project will include the construction and upgradation of more than 46 km of 400kV and 230kV double-circuit transmission lines and associated substations and line bays. The project will provide 1,400 megavolt-ampere (MVA) transmission capacities at different voltage levels.

AIIB vice president and chief investment officer D.J. Pandian said: “Ensuring a more stable source of electricity in Bangladesh’s second largest economic center will encourage more businesses to invest in the region, creating jobs and other economic benefits.

“Addressing the power shortages will also remove the risk local businesses face when having to rely on an unstable power supply.”

The project is expected to improve voltage stability and reduce voltage fluctuations and the need to spread electrical power demand, allowing more households and businesses to connect to the regional grid.

The upgrade is one of the four energy projects in the country that have received funding from the bank. All the four projects are touted to be aligned with the Government’s target of achieving affordable electricity for all by 2021.

The loan is the first for AIIB in the country, under the bank’s Accountability Framework.  The new framework authorizes the President to approve those projects that meet the predetermined criteria agreed with the Board.

AIIB president Jin Liqun said: “This vital investment marks the first project approved under AIIB’s Accountability Framework, which clearly demarcate the roles and responsibilities of the Board of Directors and the President in respect of financing operations of the Bank.

“Through the Accountability Framework we sought to establish a new model of governance for AIIB with an effective, strategic Board of Directors that directs and oversees the work of an efficient, accountable management, together creating a Bank able to serve its clients’ needs effectively and efficiently.”