The Asian Development Bank (ADB) has earmarked US$700million for the development of the severely strained power infrastructure of the country. While rental power plant contracts get all the headlines, what has for decades been overlooked is the issue of transmission system upgradation -- without which power shortfalls and outages cannot be mitigated. The ADB commitment is part of a $1.6 billion programme that is being co-financed by Agence FranÃ§aise de DÃ©veloppement, the European Investment Bank (EIB), and the Islamic Development Bank, as well as a government contribution of $222 million.
Needless to say, a modernisation scheme specifically targeting improvement of the power supply network is a prerequisite for more sustained and reliable power availability. This, of course, has been a missing piece in the equation so far as industry has been concerned. Low voltages coupled with power outages tends to reduce GDP growth rate by an estimated 0.5% annually. The ADB loan comes at the nick of time. It will help the country to invest in power sector development. The role of electricity simply cannot be underestimated, especially in the face of so much foreign interest in making Bangladesh a favourite investment destination over the next decade or so.
If we are to attain an estimated GDP 8% or more growth rate to attain the status of a middle income country by the year 2021, reliable and sustained power is a must. When potential investors read Bangladesh's ranking in internationally reputed publications such as IFC's Doing Business 2013 where we take the 'gold' in being the least impressive country among 185 economies when it comes to obtaining a power connection for industry, they think twice before investing. One of the major impediments in this journey towards economic emancipation is the inadequate infrastructure especially lack of reliable power supply for industrial development.
We are happy to see that policymakers have finally realised that there is now a real possibility of making Bangladesh the next potential hub for regional apparels' production. However, in order to cash in on this opportunity, infrastructure deficiencies that include power must be addressed now.