World Bank to Support Bangladesh to Increase Power Supply

Contacts:

In Dhaka:  Mehrin A. Mahbub  (880-2) 8159001; mmahbub@worldbank.org

In Washington: Erik Nora (202) 458 4735; enora@worldbank.org

September 18, Dhaka:  Yesterday, the Bangladesh Government successfully concluded negotiations with the World Bank for US$350 million Siddhirganj Peaking Power Project (SPPP). The proposed project will be Bangladesh’s first integrated gas-to-power project, and will contribute 300 MW of generation capacity to help address the country’s shortage of power.

Dr. M. Fouzul Kabir Khan, Secretary, Power Division, Ministry of Power, Energy and Mineral Resources and Mr. Alan F. Townsend, Senior Energy Specialist, World Bank led the government and the IDA delegations, respectively at the negotiation concluding on September 17, 2008.

“For achieving the middle income country status by 2020, Bangladesh must meet the rapidly growing demand for power. We are happy to support the Government to increase power supply,” said Zahid Hussain, Acting Country Director, World Bank Bangladesh.  “The Siddhirganj project will be an important part of the solution leading to sustainable provision of energy services, and will help Bangladesh to continue to expand electricity access to the poor.”

SPPP will increase the power supply during periods of peak demand in Bangladesh. The project would begin operation in 2011, following the construction period.

The project includes three linked infrastructure components, and will help the country make efficient use of scarce natural gas resources while reducing power outages which have become a huge burden to Bangladeshi households and businesses.

  “The project re-affirms our support to development of the energy sector, and complements projects in rural electrification, renewable energy, private power generation, and sector reform,” said Alan Townsend, Sr. Energy Specialist and Task Leader for the Siddhirganj project.

The project will construct state-of-the-art 300 MW gas turbine power plant at Siddhirganj.  It will also build a 60 km natural gas pipeline to link the main natural gas transmission network to the Siddhirganj site, and an 11 km electricity transmission line so that power from the plant can be delivered to the distribution network.

The project also aims to strengthen the three implementing agencies:  Gas Transmission Company Limited (GTCL), Electricity Generation Company of Bangladesh (EGCB), and Power Grid Company of Bangladesh (PGCB). 

The credit is scheduled for World Bank Board consideration and approval on October 30, 2008.

The credits from the International Development Association (IDA), the World Bank’s concessionary arm, have 40 years to maturity with a 10-year grace period; they carry a service charge of 0.75 percent.