The Asian Infrastructure Investment Bank (AIIB) on Friday approved a loan of US$165 million for the upgrade and expansion of power distribution system in Bangladesh.
The Board of Directors of the multilateral development bank, for the first time, also approved three other loans to finance as many projects.
Three of the four projects are co-financing operations with multilateral development bank (MDB) partners.
The three other approved loans are a $216.5 million loan for Indonesia, a $100 million loan for Pakistan and a $ 27.5 million loan for Tajikistan.
“I am delighted to announce that AIIB’s Board of Directors has today – just six months after the Bank’s inauguration—approved the first group of loans,” AIIB’s President Jin Liqun was quoted as saying in a press release.
The Bank’s Vice President and Chief Investment Officer, DJ Pandian, welcomed the new investments noting, “The Bank places tremendous importance on ensuring that its investments lead to positive results and measureable outcomes for its clients and will improve the lives of the millions of people in the different regions of Asia.”
The Bank, which supports infrastructure development and regional connectivity in Asia, is targeting lending of approximately $1.2 billion in 2016.
A $165 million loan to Bangladesh for a power distribution system upgrade and expansion project is designed to expand electricity coverage by providing 2.5 million new service connections in rural areas, and to upgrade two grid substations and convert 85 circuit-km overhead distribution lines into underground cables in northern Dhaka.
The project will supplement the Bank’s development partner efforts by providing additional financial resources to connect more rural and urban consumers, further reduce distribution losses, and improve the quality and reliability of power supply in Bangladesh.
The project, upon completion, is expected to benefit about 12.5 million people in rural areas and therefore create a significant and sustained impact on many economic and social dimensions of rural development in Bangladesh.