After a nine-year suspension, the World Bank agreed to support Bangladesh with loans of $600 million to support the country’s power sector, conditional on reforms to improve efficiency and curb system losses.
World Bank suspended aid to Bangladesh after system losses rose to 38 per cent in the late 1980s. The current level, 32 per cent. is still massive by international standards.
The new loans will be used to support training of power department employees, payment of retrenchment benefit to redundant workers and implementation of a number of reform schemes.
Measures suggested include privatization of the state-run power generation and distribution companies and the independent regulation of tariffs. The government has already opened the power sector to both domestic and foreign private sector investors. This has led to a number of barge-mounted power plant projects, one of which is ready for operation.
Total demand in Bangladesh now exceeds 2400 MWe, but capacity is only 2000-2100 MWe. Only 15 per cent of the population have access to electricity. A major scheme currently underway aims to expand rural electrification in eight districts.