WB approves $560m for two Bangladeshi projects
The World Bank on Thursday approved $560 million for two projects in Bangladesh to improve reliable power supply and turn microenterprises into environmentally sustainable.
Of the total amount, the Washington-based lending agency will provide $450 million for Enhancement and Strengthening of Power Transmission Network in Eastern Region Project while another $110 million for Sustainable Enterprise Project (SEP).
The credits will come from the International Development Association (IDA), the World Bank's concessional lending arm.
The Power Transmission Project will receive a scale-up facility credit from IDA, which has a 35-year maturity including a four-year grace period. SEP will receive interest-free IDA credit, which is repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent, said a Word Bank press release received here today.
The release said $450 million Enhancement and Strengthening of Power Transmission Network in Eastern Region Project will expand the electricity transmission network in the eastern region, covering the greater Comilla and Noakhali and part of the greater Chittagong.
It will provide new electricity connections to 275,000 households and 16,000 agricultural consumers and reduce power interruptions.
The project will expand the existing grid network by building 13 new substations and rehabilitating an existing one. It will also construct 290 kilometer new and rehabilitate 157 kilometer existing transmission lines.
"The World Bank is helping Bangladesh overcome barriers to higher growth. Unreliable power supply and environmentally-unsustainable enterprises hinder a county's competitiveness and poverty reduction efforts," said Zahid Hussain, World Bank Acting Country Director for Bangladesh.
"By improving electricity transmission and helping in micro-enterprises adopt environment-friendly technologies, these projects will help Bangladesh achieve sustainable growth and advance towards upper middle-income country vision," he added.
World Bank Task Team Leader Mohammad Anis said in the last decade, Bangladesh has increased power generation capacity by more than three-fold to 15.8 GW. "But, it still has one of the world's lowest electricity consumption rates per person. To meet the growing demand, the government plans to increase power generation to 24 GW by 2021," he said.
"But, only investing in generation without upgrading transmission and distribution systems will not meet the demand. The project will enhance transmission capacity, ensure efficient evacuation of power, and improve grid operations," added the World Bank official.
The $110 million Sustainable Enterprise Project (SEP), also approved today, will help 20,000 microenterprises adopt environmentally-friendly practices. It covers manufacturing and agribusiness sectors, including leather, mini textiles, light engineering, plastic, food processing, metal products, livestock, horticulture, aquaculture, and poultry.
"Half the country's populations depend on microenterprises for livelihoods. But, the microenterprises cumulatively affect the environment and face climate change risks," said Nadia Sharmin, World Bank Task Team Leader.
The project will incentivize microenterprise clusters to use cleaner technologies and joint amenities such as shared recycling or storage facilities. It will provide loans to microenterprises for innovative, environmental-friendly technologies and practices. About 30 percent of the firms that will benefit are owned by female entrepreneurs.
