WB to provide $1.0b for power, gas transmission
The World Bank (WB) will provide $1.0 billion fresh loan to Bangladesh for expanding its power and gas transmission network. The amount will be disbursed within the next three years, a top official in the Prime Minister's Office (PMO) said.
The new loan for power sector will be provided in addition to $800 million, which is now in the pipeline.
The assurance to provide $1.0 billion from the multilateral lending agency has recently been conveyed to the PMO and the Economic Relations Division (ERD), sources said.
The WB's loan will be spent to expand the high voltage power transmission network in the country and to increase the capacities of domestic and imported gas supplies, it is learnt.
"The WB has finally agreed to extend an additional $1.0 billion loan for expanding power and gas transmission network that the country now needs badly," a top official in the PMO said.
"The ERD has been asked to finalise projects to be financed from the pledged fund of the WB."
The fresh power sector loan will be included in the next Country Assistance Strategy (CAS) of the WB spanning from 2011 to 2014. The new CAS will be made public soon, a top WB official in Dhaka said.
Presently, the WB has extended loans to two projects. They are the Rural Electrification and Renewable Energy Development Project involving a cost of $130 million and the Siddirganj Peaking Power Project at a cost of $350 million.
However, it is not immediately known whether the additional power sector loan of the multilateral lending agency will be free from conditions or whether the government will have to carry out the much-needed reforms in the state-owned enterprises (SOEs) and ensure transparency in public procurement.
Earlier, the WB in response to a request from the government to provide a loan package to establish 10 small and medium power projects in southern and northern parts of the country, wanted the government to carry forward the reforms in the SoEs and ensure transparency in public procurement, according to finance ministry sources.
Currently, the country generates between 3800mw and 4000mw, leaving a shortfall of about 1500mw.
Officials in the ERD said the proposed $1.0 loan would help expanding the power transmission network.