Energy Bangla

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Dhaka Thursday,  Mar 28, 2024

Germany extends loan to Bangladesh for power transfer

EB Reporter

The KfW, on behalf of the German Government, today signs an agreement with Bangladesh to provide funds for the energy transmission sector. The German Development Cooperation provides grant funds of about €320 million to support renewable energy and energy efficiency of the Bangladesh power sector. From this fund, a Financing Package of €60 million (comprising of €15 million grant and a promotional loan of €45 million) is being signed between the Economic Relations Division of the Ministry of Finance and KfW (the German Development Bank acting on behalf of the German Government). This money will be used for the modernisation of the power transmission system, thus reducing transmission losses, equivalent to a saving of more than 100,000 tonnes of CO2  emission per year.
The funds will be used in the Western Zone of Bangladesh, where parts of the population have very inadequate access to the power supply grid due to under-developed infrastructure. The efficiency gains from this project alone will be big enough to provide electricity to nearly 200,000 additional households.
Primarily three types of works will be undertaken: (i) the extension and upgrading of existing transmission lines, (ii) the construction of new transmission lines and (iii) the extension and construction of substations.
“Today we are taking our relation as development partners to a new level. This will be the first soft loan in our bilateral partnership. Thanks to the reduction of transmission losses many people in the western parts of Bangladesh will now have electricity. Business can develop. The CO2 footprint will be reduced. This will help us in our struggle to mitigate Climate Change“, said the Chargé d’Affaires of the German Embassy Dhaka, Dr. Ferdinand von Weyhe after the signing ceremony.
The preparation and implementation of the infrastructure works will be accompanied by highly professional consulting services, and is due to start immediately after signing the Financing Package with the preparation of the procurement processes of goods and services. This project is to be implemented by the state-owned utility Power Grid Company of Bangladesh (PGCB).

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