World Bank to invest US$185 million in renewable energy development in Bangladesh
The World Bank has announced that it has approved a US$185 million investment to add up to 310 MW renewable energy generation capacity in Bangladesh and mobilize private sector participation to meet the growing demand for electricity in the country.
The Scaling-up Renewable Energy project will increase installed capacity of renewables through piloting and expanding investments in key market segments. It will build the first 50 MW phase of a large-scale solar park in the Feni district, which will be implemented by the Electricity Generation Company of Bangladesh (EGCB).
Currently, the share of the total installed renewable energy in grid supply is only 1.5% and has significant potential for scaling up. The project will help provide better access to cleaner electricity as well as air by avoiding burning fossil fuels. It will help cut emissions by 377,000 tons of carbon dioxide equivalent a year.
The project will help mobilize up to US$212 million from the private sector, commercial banks and other sources of financing and establish a dedicated Renewable Energy Financing Facility to provide credit to developers of both rooftop solar photovoltaics (PV) and large-scale solar PV projects.
The project will support the Infrastructure Development Company Limited (IDCOL) with the development of the Financing Facility and provide resources to the Sustainable and Renewable Energy Development Authority (SREDA) to build market capacity and develop a pipeline of renewable energy projects.
The US$185 million credit from the World Bank includes a US$26.38 million loan and a US$2.87 million grant from the Strategic Climate Fund (SCF) of the World Bank’s Climate Investment Funds (CIFs).
Provided by the World Bank’s International Development Association (IDA), the credit has a 30-year term, including a five-year grace period, and an interest rate of 1.25% with a service charge of 0.75%. The SCF loan is on Scaling-up Renewable Energy Program (SREP) loan terms and has a maturity of 40 years, including a grace period of 10 years.
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