$500 million loan from the World Bank for the modernization of the power supply

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The World Bank is set to provide a half-billion US dollar loan to upgrade the rural electricity distribution system in Dhaka and Mymensingh regions, officials said on Saturday.

After the approval of the project proposal, the WB is ready to sign the $500 million loan agreement with the government, a senior Economic Relations Division (ERD) official said.

“The proposed development project financed by the World Bank is now awaiting approval by the Planning Commission. After approval, we will sign the loan agreement,” he added.

Last December, the Washington-based lender’s board of directors approved the $500 million loan to expand work to upgrade the electricity distribution and transformation system.

The DRE official said the World Bank would provide the $500 million loan from the Scaling Fund (SUF), a fixed-term lending window from the global lender.

“We hope to sign the loan agreement with the World Bank within a few months,” the official said.

Under the electricity distribution modernization program, the Rural Electricity Board (REB) will improve electricity distribution services to about 40 million people in Dhaka and Mymensingh divisions, REB sources said.

It will upgrade and build more than 31,000 kilometers of distribution lines, 157 distribution substations and related infrastructure, and integrate measures to increase the climate resilience of grid infrastructure in 25 rural electricity cooperatives (Palli Bidyut Samities) in the REB.

Some new and advanced technologies will be added to help modernize the power distribution and transformation system, CER officials said.

According to the REB, although it has already covered almost 100% of the village areas with electricity, much of the distribution system is still in poor condition.

Thus, improving modern facilities is essential for uninterrupted power supply to customers, REB officials said.

The project will introduce a modern grid system capable of supporting the two-way flow of electricity and information, minimizing and rapidly recovering from climate and cyber risks, including natural disasters and extreme weather events.

It will introduce advanced technologies such as monitoring and data acquisition control system and install advanced measurement infrastructure, the REB sources added.

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