The Asian Development Bank is extending a $100-million equivalent loan for a cross-border electricity initiative between India and Bangladesh.
ADB's Board of Directors has recently approved the loan for the Bangladesh-India Electrical Grid Interconnection Project, which will provide impetus for increased power trading in South Asia.
Around 500 megawatts of power are expected to flow into Bangladesh by 2012 as a result of the project, with the possibility of more in the future, according to an ADB statement.
The funds will be used to build a 40-kilometre 400-kilovolt transmission line, along with a high voltage direct current substation and connecting loop, linking the western electrical grid of Bangladesh with India's eastern grid.
Bangladesh's fast growing economy has seen power demand sharply outstripping supply, resulting in frequent power cuts, voltage fluctuations and losses in economic output estimated at nearly $1 billion a year.
While the economy has grown by an average of 6 per cent a year since 2005, less than half the population of 156 million has access to power.
Unreliable power supply has hurt industry and will hamper efforts to provide better economic opportunities and social services for the poor.
The project will signal a new era in energy cooperation in South Asia and is likely to herald further power trading agreements, resulting in the more effective use of existing energy resources in the region, said Sultan Hafeez Rahman, director general of ADB's South Asia Department.
Rahman said, 'Connecting the two grids will demonstrate the substantial economic benefits that come from enhanced regional cooperation and help to address energy gaps across the region.'
The statement said staff from the Power Grid Company of Bangladesh would be trained to manage the new facilities, while officials of the state-owned Bangladesh Power Development Board will learn cross-border power trading skills.
The Power Grid Company of Bangladesh is the executing agency for the project, which is due for completion in December 2012, the statement added.
Source : New Age
