ADB signs $120m loans for cross-border electricity

The Asian Development Bank lent $120 million to scale up the transmission capacity of a cross-border electricity link between India and Bangladesh.

The funds will help double the capacity of the existing 500 megawatt interconnection system, which links the power grid of western Bangladesh at Bheramara and the grid of eastern India at Bahrampur, ADB said in a statement.

Along with ADB's loans, the Bangladesh government will provide $63.2 million in funds for the project, which is expected to be completed in June 2018, the Manila-based lender said.

The two networks were first connected in 2013, under a previous project financed by ADB, it added. 

Mohammad Mejbahuddin, senior secretary of the Economic Relations Division of Bangladesh, and Kazuhiko Higuchi, ADB's country director for Bangladesh, signed the agreement at the Economic Relations Division in Dhaka yesterday.

“This assistance will support Bangladesh to better meet the rapidly rising power demand,” said Higuchi.

“The interconnection project is part of efforts under the South Asia Subregional Economic Cooperation (SASEC) Programme to promote regional prosperity and improve economic opportunities through strengthened cross-border links in trade, power, road and rail networks.”

Bangladesh's fast-growing economy has soaring energy needs, and demand is exceeding domestic natural gas supply, resulting in an increasing dependence on oil and diesel-based plants. To meet its goal of providing electricity for all by 2021, the government is working to increase generating capacity and to source additional supply.  The initial linking of the two national grids helped India deliver over 2,000 gigawatt-hours of electricity across the border in 2014.

The interconnection project is part of efforts under SASEC to promote regional prosperity and improve economic opportunities through strengthened cross-border links in trade, power, road and rail networks.

Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka are members of the initiative, according to ADB.

ADB works to reduce poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.