World Bank Supports Bangladesh to Increase Reliable Energy | ||
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| Press Release No:2009/124/SAR | ||
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| Contacts: In Dhaka: Mehrin A. Mahbub (880-2) 8159001-28 Ext. 4251 In Washington: Erik Nora (202) 458 4735
WASHINGTON, October 30, 2008—The World Bank today approved a US$350 million IDA credit to Bangladesh, designed to increase reliable power during peak demand times in a country where poor supply is estimated to cost around 2 percent in GDP growth each year.
The Siddhirganj Peaking Power Project will finance the construction of a 300 megawatt, gas turbine power plant at Siddhirganj, an existing power generation site to the southeast of Dhaka. It will also finance a 60 km natural gas pipeline from Bakhrabad to Siddhirganj that will improve the reliability of gas supply to the Siddhirganj power plant, and an 11 km electricity transmission line so that power from the plant can be distributed to consumers.
While Bangladesh has posted economic growth averaging over 6 percent the past five years, inadequate infrastructure —especially unreliable power supply — remains a significant constraint on growth. Manufacturers, surveyed in the World Bank's most recent Investment Climate Assessment, estimate that power shortages cost them around 12 percent in lost sales on an annual basis.
"Bangladesh is now in the midst of a serious power crisis," said Xian Zhu, World Bank Country Director for Bangladesh. "Power generation has failed to keep pace with demand, and, in the last two years, increasing shortages of natural gas, the primary fuel used in power generation, have added to the sector's woes. This project is expected to make a major contribution to meeting peak demand for power, and bolstering the capacity and reliability of the gas and power transmission networks."
The project will also help strengthen the institutional capacity of three implementing agencies: Gas Transmission Company Limited (GTCL), Electricity Generation Company of Bangladesh (EGCB), and Power Grid Company of Bangladesh (PGCB).
"This includes environmental and social impact management, and measures to bolster corporate governance, address corruption risk, and assure good procurement and financial management practices," saidAlan Townsend, Senior Energy Specialist and Task Leader for the project.
The Siddhirganj power plant is expected to begin operation in 2011 following the construction period.
The credit from the International Development Association (IDA), the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent.
For more project information, please visit this website
For more information on the World Bank in Bangladesh, please visit: http://www.worldbank.org/bd | ||
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