The government yesterday signed a $185 million financing agreement with the World Bank for a project that aims to generate 310 megawatts of renewable energy.
The Scaling-up Renewable Energy Project will focus on utility-scale solar photovoltaic (PV) and rooftop PV to expand new markets in renewable energy generation in the country.
The project will establish the country’s first large-scale 50MW grid-tied solar PV generation plant in Feni, implemented by the Electricity Generation Company of Bangladesh, according to a statement from the WB Dhaka office.
For filling the gap in the long-term domestic financing market for renewable energy, the project will also support the Infrastructure Development Company Ltd to manage a Renewable Energy Financing Facility for both rooftop and utility-scale solar PV.
It will also help the Sustainable and Renewable Energy Development Authority identify sites for large-scale projects and promote new net metering policy for rooftop PV.
“Since the last decade, the World Bank has helped Bangladesh increase access to electricity in rural areas through renewable energy. Today, Bangladesh has one of the world’s largest domestic solar power programmes,” said Dandan Chen, acting country director of the WB for Bangladesh and Bhutan.
“Now, we are going one step further to help Bangladesh expand renewable energy generation on a larger scale. With strong collaboration between the public sector and the private sector, we hope the project will help meet the growing energy demands of the population.”
The project will help unlock private investment and aim to raise up to $212 million in financing from the private sector, commercial banks, and other sources, the statement said.
“The project will be important for Bangladesh to tap into its potential for renewable energy generation. Furthermore, it will help reduce a substantive amount of CO2 emissions per year, which is in line with the country’s nationally determined contribution to the Paris climate agreement,” said Monowar Ahmed, secretary of the Economic Relations Division.
The $185 million credit also includes a $26.38 million loan and a $2.87 million grant from the Strategic Climate Fund of the WB’s Climate Investment Funds.
The credit from the International Development Association has a 30-year term, including a five-year grace period, and an interest rate of 1.25 percent with a service charge of 0.75 percent.
The SCF loan has a maturity period of 40 years, including a grace period of 10 years with a service charge of 0.1 percent.
With this project, the WB’s ongoing support in the energy sector totals close to $2.4 billion, covering generation, transmission, and distribution, including renewable energy, the statement added.