AFD to provide loan of 100 million euros for digital solutions in energy sector

The French Development Agency (AFD) will provide a loan of 100 million euros to Bangladesh for reinforcing its role as an active participant in the search for and use of advanced digital solutions in power and energy sector in Bangladesh.

This support comes via AFD's concessional sovereign loan and will go towards financing project titled "Construction and Augmentation of Substation and Installation of the Capacitor Bank in Power System under DPDC".

A credit facility agreement from AFD worth 100 million euros was signed between Fatima Yasmin, secretary of the Economic Relations Division and Benoit Chassatte, AFD Country Director for Bangladesh and French Ambassador to Bangladesh Jean-Marin Schuh, said France Embassy in a statement today.

In addition, a Grant Facility Agreement for a delegated grant from the EU Alternative Investment Fund worth 12 million euros would be signed in the beginning of 2021.

AFD's loan aims to equip existing infrastructure with new, innovative and reliable technologies in order to ensure services are prepared for the future.

"Moreover, by integrating digital technology, we speed up the adoption of renewable energies and thus contribute towards achieving the country's Sustainable Development Goals (SDGs)," the statement said.

The additional 12 million euros grant will support piloting the smart grid project in five substations in Dhaka. The smart grid gives shape to this transformation, by making the grid more effective and efficient.

A total of 1,141,000 people will benefit from a significant improvement in the quality of electricity service through the project. It will help fight climate change by preventing an accumulated 104,000 tonnes of CO2 emissions per year.

Present in Bangladesh since 2012, AFD supports projects in urban development and infrastructure, as well as in the power and green energy sectors. It also focusses on corporate and social responsibility. As of 2020, AFD has committed 910 million euros to Bangladesh including 24 million euros in the form of grants.

In Asia and the Pacific, AFD promotes green and inclusive growth as climate is at the core of its strategy in South Asia.