Govt, ADB sign loan deals for power system capacity improvement | Greenwatch Dhaka | The leading online daily of Bangladesh

Govt, ADB sign loan deals for power system capacity improvement


The Asian Development Bank (ADB) and the government of Bangladesh on Tuesday signed $205 million loan agreements for increasing access to reliable supply of electricity and improving efficiency and capacity of power systems in Bangladesh.The assistance is the third tranche of the $700 million Power System Expansion and Efficiency Improvement Investment Program (PSEEIIP) approved by ADB in 2012.

Economic Relations Division (ERD) Senior Secretary Mohammad Mejbahuddin and Kazuhiko Higuchi, Country Director, Bangladesh Resident Mission of ADB, signed the agreements on behalf of their respective sides at a ceremony at ERD, Sher-e-Bangla Nagar, Dhaka.

The ADB assistance under third tranche of the PSEEIIP will help replace aging steam and gas turbine power plants with a more efficient 400 MW gas-fired combined cycle power plant at Ashuganj Power Station complex. It will also upgrade and construct 72 kilometres of transmission lines, and four substations. Existing analog billing metres will be replaced by 700,000 pre-payment metres in Dhaka division.

“The project will generate 400 MW of electricity, using the same amount of energy that previously produced 220 MW, achieving more than 80 percent efficiency increase in energy use,” said ADB Country Director Kazuhiko Higuchi.

“In addition to bringing more stable and reliable electricity supply to users, the project also aims for higher operational and financial efficiency in the distribution utilities by bringing in prepaid metres in an operational scale,” he added.

The Power system expansion and efficiency improvement investment program (tranche-3) is a five-year term project (January 2016-December 2020) and the total cost of the project is estimated at $530 million. Out of the amount, ADB will provide $ 205 million from OCR, and $ 220 million will come from the Islamic Development Bank (IDB) and $ 105 million from the government. The OCR loan is refundable in 25 years with a grace period of five years.

The interest rate is LIBOR based with 0.15 percent commitment charge on the undisbursed loan and 0.10 percent maturity premium.

The Power Division is the executing agency and Ashuganj Power Station Company Ltd (APSCL), Power Grid Company of Bangladesh Ltd (PGCB) and Bangladesh Rural Electrification Board (BREB) are the implementing agencies of the projects under the programme. The main objective of this programme is to enhance the capacity of power generations, transmission and distribution in the power sector of Bangladesh.

The main activities under the programme are replacement of aging steam and gas turbine power plants of 220 MW with a more efficient 400 MW gas-fired combined cycle power plant at Ashuganj power station, upgrading of approximately 65 kilometre of 132 kilovolt double circuit Comilla (South) Chandpur transmission line and construction of approximately 7 km of 132 KV double circuit Madunaghat-Kalurghat underground transmission line, construction of 132/33 KV air-insulted substation (AIS) at Kachua (Chandpur) and 132/33 KV gas-insulted substation (GIS) at Kalurghat (Chittagong) and upgrading of existing 132/33 KV substation at Madunaghat (Chittagong) and 132/33 KV substation at Comilla (south) from AIS to GIS and replacement of existing metres with approximately 7,00,000 pre-payment meters in Dhaka Division.


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