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ADB-led lenders readying $1.40b for power sector
Financial Express :: Financial Newspaper of Bangladesh
FHM Humayan Kabir
Four lenders including the Asian Development Bank are readying a fund worth about US$ 1.40 billion for development of the Bangladesh's power sector in phases, officials said Friday.
Negotiations for the loan package were completed successfully last week with the ADB, the provider of the major part of the fund, a senior official at the Economic Relations Division (ERD) told the FE.
Under the package, the Manila-based lender will provide $700 million while the Jeddah-based Islamic Development Bank will extend $380 million, the European Investment Bank (EIB) $198 million and the French donor agency AFD $100 million.
A framework financing agreement would be signed with the four lenders in the current year, the ERD official said.
Under a five-year development programme involving nearly $1.6 billion for the power sector, the government will also contribute the remaining amount of $220 million.
"We had negotiations on it early this month in Dhaka. The ADB agreed to provide the loan," the ERD official said.
The ADB will administer the fund to be disbursed in three tranches over the next three years.
The Manila-based lender will place the loan proposal before its board meeting next month seeking its approval for disbursement, the official said.
Besides, the other lenders-IDB, EIB and AFD-are also
expected to confirm their loans within the current year, he added.
Under the $1.60 billion Power System Expansion and Efficiency Improvement Programme, the government would boost power generation, expand transmission and distribution lines and upgrade some plants to enhance their capacity over a period of five years from the current 2012-13 fiscal year, a power division official said.
Besides, solar power would also be tapped for irrigation while new power plants would also be built under the programme.
He said it would be the largest investment programme the government would be implementing with support from the four lenders for developing the country's power sector.
"For the first time in Bangladesh the quartet are expected to finance the massive power development programme jointly with the government," he said.
The country's poor power supply situation has affected the economic growth severely as many newly-built industrial units, homes and other establishments have been deprived of power connections for years.
All the power plants in Bangladesh now generate 5,500 megawatts (mw) of electricity a day against the demand for more than 6,500mw.
In the first phase of the $1.6 billion programme, Bangladesh Power Development Board (PDB) would upgrade the generation capacity of the 150mw Khulna plant, the 150mw Shahjibazar plant, the 100mw Baghabari power plant and the 150mw Sylhet power plant, the power division official said.
The state-owned power developer will also build solar-based irrigation systems in rural areas to boost the country's agricultural production.
In the second phase of the programme, the state-owned power transmission company and distributors will expand their electricity supply lines in a bid to upgrade their supply system.
In the third phase, the government-owned power generation companies will set up some power generation plants for weathering the poor electricity supply.
Financial Express :: Financial Newspaper of Bangladesh
FHM Humayan Kabir
Four lenders including the Asian Development Bank are readying a fund worth about US$ 1.40 billion for development of the Bangladesh's power sector in phases, officials said Friday.
Negotiations for the loan package were completed successfully last week with the ADB, the provider of the major part of the fund, a senior official at the Economic Relations Division (ERD) told the FE.
Under the package, the Manila-based lender will provide $700 million while the Jeddah-based Islamic Development Bank will extend $380 million, the European Investment Bank (EIB) $198 million and the French donor agency AFD $100 million.
A framework financing agreement would be signed with the four lenders in the current year, the ERD official said.
Under a five-year development programme involving nearly $1.6 billion for the power sector, the government will also contribute the remaining amount of $220 million.
"We had negotiations on it early this month in Dhaka. The ADB agreed to provide the loan," the ERD official said.
The ADB will administer the fund to be disbursed in three tranches over the next three years.
The Manila-based lender will place the loan proposal before its board meeting next month seeking its approval for disbursement, the official said.
Besides, the other lenders-IDB, EIB and AFD-are also
expected to confirm their loans within the current year, he added.
Under the $1.60 billion Power System Expansion and Efficiency Improvement Programme, the government would boost power generation, expand transmission and distribution lines and upgrade some plants to enhance their capacity over a period of five years from the current 2012-13 fiscal year, a power division official said.
Besides, solar power would also be tapped for irrigation while new power plants would also be built under the programme.
He said it would be the largest investment programme the government would be implementing with support from the four lenders for developing the country's power sector.
"For the first time in Bangladesh the quartet are expected to finance the massive power development programme jointly with the government," he said.
The country's poor power supply situation has affected the economic growth severely as many newly-built industrial units, homes and other establishments have been deprived of power connections for years.
All the power plants in Bangladesh now generate 5,500 megawatts (mw) of electricity a day against the demand for more than 6,500mw.
In the first phase of the $1.6 billion programme, Bangladesh Power Development Board (PDB) would upgrade the generation capacity of the 150mw Khulna plant, the 150mw Shahjibazar plant, the 100mw Baghabari power plant and the 150mw Sylhet power plant, the power division official said.
The state-owned power developer will also build solar-based irrigation systems in rural areas to boost the country's agricultural production.
In the second phase of the programme, the state-owned power transmission company and distributors will expand their electricity supply lines in a bid to upgrade their supply system.
In the third phase, the government-owned power generation companies will set up some power generation plants for weathering the poor electricity supply.
