US$130m for solar in Bangladesh

Rural areas will be provided with solar electricity

The World Bank has approved a US$130 million International Development Association (IDA) credit to Bangladesh, designed to increase access to electricity through the installation of solar systems in rural areas.

This credit is additional financing for the Rural Electrification and Renewable Energy Development Credit. Previous rounds of the project have helped connect 600,000 consumers to the electricity grid, constructed about 8,500 km of new distribution, and provided 320,000 consumers with solar systems since 2003.

The credit from the IDA, the World Bank’s concessionary arm, has 40 years to maturity, with a ten-year grace period, and carries a service charge of 0.75%.

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Bangladesh currently has only 40% grid connection. Power shortages and load shedding are severe, especially in rural areas. In addition, population growth, increased industrialisation, additional connections and rise in the use of modern, electrical appliances have boosted demand for electricity by 500 MW a year.

“Investing in grid electricity alone will not realise the government of Bangladesh’s goal of universal access to electricity by 2020,” warned Rob Floyd, acting World Bank country director for Bangladesh. “This additional financing will be used to provide electricity to 300,000 households through solar home systems. Many of these households in poor areas are too remote to connect to the electricity grid, and would never receive electricity through conventional electrification methods.”

Part of the financing will also be used to purchase and install about ten-million energy-efficient compact fluorescent lamps in densely populated areas in the country. These will replace an equivalent number of incandescent lamps.