The government on Sunday signed a $177-million additional financing agreement with the International Development Association (IDA) to complete the ongoing construction of a 335 megawatt combined cycle power plant at Siddhirganj near capital Dhaka.
Kazi Shofiqul Azam, additional secretary of Bangladesh’s Economic Relations Division, and Iffath Sharif, acting World Bank country director for Bangladesh, signed the agreement on behalf of their respective sides on Sunday.
The power plant will account for six percent of the total electricity delivered to the national grid, said the Washington-based lender. IDA is the World Bank’s concessional arm that helps the world’s poorest countries.
The additional financing to the Siddhirganj Power Project will help increase clean, reliable and low-cost electricity supply in Bangladesh, said the bank.
In 2008, the World Bank (WB) provided $350-million for the construction of a 300 megawatt gas turbine power plant in Siddhirganj.
In the face of increasing power demand and gas shortages, the government decided to convert the peaking power plant to an energy-efficient 335 megawatt combined cycle power plant.
The additional financing will fill the financing gap for constructing the power plant, said the lender. “This additional financing will add much-needed new power generation capacity for Bangladesh.
“This financing will contribute to the World Bank’s current support to the energy sector, raising it to over $1.5-billion,”said Sharif, acting World Bank country director for Bangladesh.
The combined cycle technology allows the plant to produce higher energy with lower gas consumption. This cleaner technology reduces carbon emission.
The plant will start commercial operation in 2016. “In the last few years, the country has increased its power generation capacity significantly. But at the same time, the demand for electricity has gone up,” said Azam, additional secretary of Bangladesh’s Economic Relations Division.
“The project will increase uninterrupted and low-cost power supply during the peak demand period, and thus help spur economic activities and reduce the cost of doing business in Bangladesh.”
In addition to financing the construction of the power plant, the project will also help strengthen the institutional capacity of the three implementing agencies: Gas Transmission Company Limited (GTCL), Electricity Generation Company of Bangladesh (EGCB) and Power Grid Company of Bangladesh (PGCB), said the World Bank.