DHAKA, Jan 2, 2024 (BSS) - The Asian Development Bank (ADB) and the government of Bangladesh today signed a $160 million loan agreement to help upgrade Dhaka's power distribution network, enhance its efficiency, and increase energy supply.

Md. Shahriar Kader Siddiky, Secretary of Economic Relations Division (ERD), and Jiangbo Ning, Deputy Country Director, ADB, signed the loan agreement on behalf of Bangladesh and ADB, respectively, at a ceremony held at ERD in the capital.

The Dhaka Power System Expansion and Strengthening Project will construct eight substations and install over 100 kilometers of climate and disaster resilient underground cables and 150 kilometers of overhead lines, said a press release.

The project will help the Dhaka Electric Supply Company Limited (DESCO) improve its overall operations to meet the globally accepted standards, establish a safeguards unit covering environmental, social, and gender issues that will ensure internationally accepted standards for all future infrastructure projects.

The project will also help adopt environment-friendly technologies such as alternative insulating gases for future gas-insulated substations instead of sulfur hexafluoride following a detailed feasibility study on alternative insulating gases.

"The assistance will ensure reliable, efficient, and improved quality electricity supply to 200,000 new and 1.1 million existing residential, commercial, and industrial customers as well as the new airport terminal in Dhaka," said Deputy Country Director Jiangbo Ning.

"It will also promote the climate agenda by helping to optimize power usage, reduce wastage, modernize aged and overloaded power infrastructure, and reduce at least 14,700 tons of carbon dioxide emissions every year." added Ning.

Through an attached technical assistance, the knowledge and capacity of the Dhaka Electric Supply Company Limited and related government agencies to handle public-private partnerships (PPPs) will be enhanced through a capacity development program and policy recommendations to strengthen PPP processing and implementation and the handling of future commercial financing.

The $750,000 technical assistance grant will be funded by the Republic of Korea e-Asia Knowledge Partnership Fund, administered by ADB.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members-49 from the region.