The Asian Development Bank has signed a $17.7 million financing package with Spectra Solar Park Limited to invest in a 35-megawatt utility-scale solar photovoltaic plant in Bangladesh.
The solar park is one of the first private sector solar plants in Bangladesh to be financed by multilateral institutions, and will support the country's efforts to attain long-term energy security and meet climate goals by stepping up its use of clean energy, according to a statement.
The agreement for the Spectra solar power project was signed by Shantanu Chakraborty, director of infrastructure finance for South Asia, Central Asia and West Asia at the ADB's private sector operations department, and Khan Md Aftabuddin, managing director of Spectra Solar Park.
Deutsche Investitions-und Entwicklun-gsgesellschaft (DEG), a development finance institution based in Germany, is co-financing the project with ADB.
Once operational, the plant is expected to provide over 50 gigawatt-hours of clean electricity annually to the national grid and avoid 33,200 tonnes of carbon dioxide emissions.
The project aligns with the Bangladesh government's aim to reduce the country's dependence on fossil fuels through renewable energy under Bangladesh Vision 2021.
"This project strongly demonstrates that the solar energy sector in Bangladesh is an attractive destination for private sector engagement," said Chakraborty.
"This is a landmark project that will also incorporate very specific and meaningful design features to empower women and ensure a gender inclusive workplace."
Bangladesh is committed to combating climate change and increasing energy access from renewable energy sources, said Aftabuddin.
"The project establishes important precedents for the solar energy sector in Bangladesh by adopting international best practices. We are grateful to ADB for their commitment and assistance on this project."
Green Delta Capital served as lead arranger for the project. "ADB's financing with co-financing by DEG in this project will help scale up solar projects and unlock foreign investments for renewable energy in Bangladesh," said Md Rafiqul Islam, managing director and CEO of Green Delta Capital.
The financing comprises a loan from ADB and a loan from the ADB-administered Canadian Climate Fund for the Private Sector in Asia II (CFPS II).
The Canadian Climate Fund for the Private Sector in Asia (CFPS) also provided a technical assistance grant to support project preparation and to catalyse the loans.
CFPS and CFPS II were established by the government of Canada to encourage private investment in climate change mitigation and adaptation projects in Asia and the Pacific.