ADB grants $100m loan for Indo-Bangla power line

Financial Express Report

VOL 18 NO 94 REGD NO DA 1589

Dhaka, Wednesday September 1 2010

 

The Asian Development Bank (ADB) Tuesday approved US$100 million loan for Bangladesh to install Indo-Bangla cross-border power transmission line in a bid to import electricity, officials said.

The Manila-based lender said its board of directors approved the loan for the Bangladesh-India 40-kilometre power grid installation project.

The government in early August completed negotiations for getting the loan. Bangladesh will install the 400-kilovolt cross-border power transmission line, investing Tk 10.40 billion ($150 million) by June 2012.

Power Division officials said the state-owned Power Grid Company of Bangladesh Ltd (PGCB) has already undertaken the project to build the line having the capacity of exchanging 500-megawatt electricity between the two nations.

About 100-kilometre cross-border power grid would connect Bangladesh's western Bheramara and India's eastern Baharampur in West Bengal.

The PGCB would install nearly 40-km grid from Bheramara to the border point, and the rest 60-km portion from the border point to Baharampur would be installed by the Power Grid Corporation of India Ltd (PGCI) by its own fund.

Bangladesh Power Development Board (PDB) and PGCI on July 26 signed a 35-year power transmission agreement to import 500-mw electricity, starting from late 2012.

The agreement keeps the provision for Bangladesh to export power to India in the future, and the transmission system will have the capacity to exchange 500-mw of power soon after the system is launched.

The project marks a new era in energy cooperation in South Asia, and is likely to herald further power trading agreements, resulting to more effective use of energy resources in the region, said Sultan Hafeez Rahman, director general of ADB's South Asia Department.

"Connecting of the two grids demonstrates substantial economic benefits that come from enhanced regional cooperation, helping to address energy gaps across the region," he added.

The ADB's $100 million loan has a 32-year repayment period including a grace period of eight years, with 1.0 per cent interest per annum during the grace period and 1.5 per cent for the rest of the term.