ADB loan to help Bangladesh cut energy shortage, reduce poverty

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The Asian Development Bank is extending a 300 million U.S. dollars energy infrastructure loan to help Bangladesh address critical power shortages which are undermining the economy and slowing poverty reduction efforts, the Manila-based lender said Thursday.

It said in a press release that the board of directors of the bank Thursday approved the loan for over half a billion U.S dollars Power System Efficiency Improvement Project, which will help meet Bangladesh's urgent need for more energy-efficient generating plants and greater use of renewable power sources.

The Islamic Development Bank is providing co-financing of 200 million U.S. dollars, with the Bangladeshi government extending over 81 million U.S. dollars for a total project cost of almost 581.2 million U.S. dollars, it added.

These initiatives will help Bangladesh cut carbon dioxide emissions by hundreds of thousands of tons a year, making the project eligible for carbon financing under the Clean Development Mechanism, the bank said, adding it also incorporates a gender action plan, funded by an Asian Development Bank technical assistance grant of 350,000 U.S. dollars, that will ensure women are able to benefit equally from energy-related employment and livelihood opportunities.

Inadequate natural gas supplies and lack of diverse power sources have left the country with a large gap between electricity supply and demand, estimated at over 1,200 megawatts for 2011, it said.

According to the bank statement, only 49 percent of Bangladeshi people have access to electricity, and frequent shortages and unreliable supplies have perpetuated underdevelopment with nearly half the population living below the extreme poverty line of 1.25 U.S. dollars a day.

The project is due for completion by the end of June, 2017.

Source: Xinhua