Bangladesh’s economic growth hinges significantly on its expanding energy sector, essential for sustaining its population’s needs and economic advancement. Meeting these demands requires a dependable and sustainable energy supply. The Asian Development Bank (ADB) has become a pivotal ally in this pursuit, offering essential financial and technical aid to fortify Bangladesh’s energy security.
As of Dec. 31, 2023, the ADB’s public sector loans, grants, and technical assistance to Bangladesh totaled $31.8 billion. This extensive support includes 726 commitments, reflecting ADB’s commitment to enhancing infrastructure and development across the country. The current sovereign portfolio comprises 75 loans and 4 grants amounting to $13 billion, addressing critical sectors to foster sustainable growth and resilience. Since 2016, the ADB has been providing an annual assistance of $2 billion, aligned with Bangladesh’s Eighth Five-Year Plan (2021–2025) and Perspective Plan (2021–2041). These initiatives aim to accelerate economic development, improve living standards, and promote sustainable practices in line with Bangladesh’s long-term development goals.
The Asian Development Bank (ADB) has recently approved significant financing initiatives aimed at bolstering energy efficiency and infrastructure development in Bangladesh. The Efficiency and Energy Transition project, valued at $200 million and approved on Nov. 22, 2023, focuses on installing 650,000 smart prepaid gas meters (SPGMs) across South Dhaka and Narayanganj. This initiative is expected to annually reduce CO2 emissions by 400,000 tons, marking a substantial step towards sustainable energy practices.
In a parallel effort, the Boost Energy Supply and Distribution project, approved on Nov. 30, 2023 with a loan value at $160 million, targets the enhancement of Dhaka’s energy infrastructure. It includes the construction of eight substations and the installation of over 100 kilometers of underground cables and 150 kilometers of overhead lines. These developments are anticipated to lower annual CO2 emissions by 14,700 tons while providing reliable energy access to 1.3 million new and existing users, including the new airport terminal.
The Asian Development Bank (ADB) has outlined an extensive action plan and several key projects aimed at enhancing the energy sector in Bangladesh. Recently approved projects include the Road Map to Scale Up Solar Irrigation Pumps (SIPs), approved in December 2023 with an estimated value of $800 million. This initiative plans to install 45,000 SIP systems, replacing 200,000 diesel pumps and irrigating 400,000 hectares of land, benefiting over 1.3 million farmers. It is expected to displace 300,000 tons of diesel fuel annually, avoid 900,000 metric tons of CO2 emissions yearly, and potentially add up to 1,000 MWp of solar capacity, saving approximately $377 million annually.
The Efficiency and Energy Transition project, approved on Nov. 22, 2023 with a USD 200 million loan, focuses on installing 650,000 smart prepaid gas meters in South Dhaka and Narayanganj to reduce CO2 emissions by 400,000 tons annually. The Boost Energy Supply and Distribution in Dhaka project, approved on Nov. 30, 2023 with a loan of $160 million, involves constructing eight substations and installing over 100 kilometers of underground cables and 150 kilometers of overhead lines. It aims to reduce CO2 emissions by 14,700 tons annually while providing reliable energy to 1.3 million new and existing users, including the new airport terminal.
Further initiatives include the 100-MW Solar Project in Pabna, structured financing for a grid-connected solar power project, and proposed projects like Power Transmission Strengthening, Renewable Energy Integration, Northwest Distribution Network Modernization, FPEBL Rooftop Solar Power, Power Distribution Network Enhancement, Dhaka Power System Expansion, and Strengthening, and Smart Metering Energy Efficiency Improvement. These projects collectively aim to modernize infrastructure, integrate renewable energy sources, and enhance energy efficiency across Bangladesh’s energy landscape.
ADB has secured $121.55 million in financing to support the construction and operation of a 100MW grid-connected solar photovoltaic power plant in Pabna, Bangladesh, through Dynamic Sun Energy Private Limited. This marks Bangladesh’s first private sector utility-scale solar facility to receive backing from global financiers, according to an official statement released in April 2024. Acting as the sole mandated lead arranger and bookrunner, ADB structured and coordinated the debt package, comprising a $46.75 million loan from ADB, a $28.05 million collaborated B-loan from ILX Fund I, and a $46.75 million pooled parallel loan from the Japan International Cooperation Agency (JICA). Suzanne Gaboury, Director General of ADB’s Private Sector Operations Department, highlighted ADB’s commitment to promoting renewable energy in Bangladesh and overcoming financing challenges for such projects. The solar plant is expected to generate 193.5 gigawatt hours annually and reduce carbon dioxide emissions by 93,654 tons yearly. Paramount Textile PLC (PT), owner of Dynamic Sun Energy, welcomed the partnership with ADB as a significant step towards sustainable growth, reinforcing PT’s commitment to environmental stewardship alongside its textile manufacturing operations.
The collaboration between ADB and Bangladesh in the energy sector exemplifies a successful model of regional development partnerships. As Bangladesh continues its journey towards a secure and sustainable energy future, ADB’s ongoing assistance will be pivotal in achieving these ambitions. This enduring partnership ensures Bangladesh has the energy necessary to illuminate homes, drive industries, and propel economic progress.
[Representational image. By Glen Kelp from Pixabay]
Syed Raiyan Amir is a Senior Research Associate/ Research Manager at the KRF Center for Bangladesh and Global Affairs (CBGA). He was a Research Assistant at the United Nations Office on Drugs and Crime (UNODC) and International Republican Institute (IRI). He has completed his internship at Bangladesh Enterprise Institute (BEI). The views and opinions expressed in this article are those of the author.
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