The European Investment Bank (EIB) is providing €82m loan to Bangladesh in support of a project that aims to boost the country’s power generation, transmission and distribution capacity.The loan will finance two specific projects under the program that include conversion of the Baghabari and Shagibacar gas-fired plants to combined-cycle power plants, leading to efficiency improvements, increase in generation capacity without any rise in the amount of fuel used, which eventually reduces CO2 emissions.
Extended under EIB’s Climate Change Mandate (2011-2013) for non-European Union (EU) countries, the loan will also contribute to climate change mitigation and improving social and economic infrastructure in Bangladesh, which represents key priorities for EU and the bank.
EIB vice president and operations incharge Asia Magdalena Alvarez said the loan demonstrates the bank’s commitment, together with that of other international financial institutions, to enhance energy access that is essential to boost economic growth and raise the standards of living of the local population.
”Sustainable access to the energy supply will also help avoid bottlenecks and will enable the more efficient and rational use of energy resources, thus reinforcing the positive effects in terms of climate change mitigation and adaptation,” Alvarez added.
EU Ambassador William Hanna said, ”This project will have important benefits for the people of Bangladesh and the sustainability of the energy sector, and will contribute to combatting climate change.”
Other international financial institutions co-financing Bangladesh’s $1.6bn energy sector improvement program include Asian Development Bank (ADB), Islamic Development Bank (IsDB), Agence Française de Développement (AFD), as well as Bangladesh Government.