The Asian Infrastructure Investment Bank (AIIB) has approved a loan of $120 million for a project that will upgrade and expand the power transmission system in Chittagong.
The Bangladesh Power System Upgrade and Expansion Project marks the first AIIB financing approved under the bank's Accountability Framework. The framework, which came into effect on January 1, delegates authority to AIIB President Jin Liqun to approve those projects that meet the predetermined criteria agreed with the board.
“This vital investment marks the first project approved under the AIIB's Accountability Framework, which clearly demarcates the roles and responsibilities of the board of directors and the president in respect of financing operations of the bank,” Liqun said in a statement yesterday.
The project will construct and upgrade more than 46km of double-circuit transmission lines and associated substations and line bays. It will also improve voltage stability, reduce voltage fluctuations and allow more residences and businesses to connect to the regional grid.
It is one of four energy projects in Bangladesh that have received funding from the AIIB. All of the four projects are aligned with the Bangladesh government's target to achieve affordable electricity for all by 2021.
“Ensuring a more stable source of electricity in Bangladesh's second largest economic centre will encourage more businesses to invest in the region, creating jobs and other economic benefits,” said AIIB Vice President and Chief Investment Officer DJ Pandian.
“Addressing the power shortages will also remove the risk local businesses face when having to rely on an unstable power supply.”