The World Bank earlier this month approved $185 million in financing to help Bangladesh develop up to 310 megawatts (MW) of renewable energy and to mobilize private sector participation to help meet the growing electricity demand in the country.
Launched on March 1, the Bangladesh Scaling-up Renewable Energy Project will provide $185 million to add up to 310 MW in renewable energy generation capacity in Bangladesh and aims to mobilize a further $212 million in private sector investment to meet growing electricity demand in the country. Bangladesh only receives around 1.5% of its electricity from renewable energy sources but has significant potential to scale this up.
“Resource assessments indicate that Bangladesh could realize additional renewable energy capacities of over 3,600 [megawatts (MW)],” said Jari Väyrynen, World Bank Team Leader for the Scaling-up Renewable Energy Project, who spoke to me via email. “Considering the prevailing land scarcity in Bangladesh, this estimate excludes arable land needed for agriculture. The estimated potential for ground-mounted solar parks and solar rooftop is about 2,000 MW. The project includes technical assistance resources for further resource assessment of both solar and wind resources, focused on specific sites.”
The World Bank’s International Development Association (IDA) will provide $156 million over a 30-year term, while a further $26.38 million loan and a $2.87 million grant will be provided by the Strategic Climate Fund (SCF) of the World Bank’s Climate Investment Funds (CIFs).
Right out of the gate, the financing will help to build the first 50 MW phase of a large-scale solar panel energy park in the Feni district, which is set to be implemented by the Electricity Generation Company of Bangladesh (EGCB). The project is expected to help cut emissions by around 377,000 tons of carbon dioxide-equivalent per year.
“Bangladesh is well on its way towards becoming an upper middle-income country with about 80% of the population having access to grid electricity,” said Dandan Chen, World Bank Acting Country Director for Bangladesh and Bhutan. “It also has one of the most successful off-grid renewable energy programs in the world, providing electricity to another 10% of the population. This project will help expand renewable energy generation capacity. By leveraging all sources of finance, the expanded renewable energy sector is ready to push the country’s growth trajectory further.”
The Bangladesh Scaling-up Renewable Energy Project will also seek to secure a further $212 million from the private sector, commercial banks, and other sources of financing, as well as establish a dedicated Renewable Energy Financing Facility for Bangladesh to provide credit to developers of both residential and large-scale solar PV projects. “While there is potential for wind power, the Scaling-up Renewable Energy Project focuses on both land-mounted utility-scale PV and rooftop PV as they have the largest potential in Bangladesh, including for scale-up of the targeted market segments,” said Jari Väyrynen.
The project will also support the Infrastructure Development Company Limited (IDCOL) with development of the Financing Facility and provide resources to the Sustainable and Renewable Energy Development Authority (SREDA) in an effort to help build market capacity and develop a pipeline of renewable energy projects for the country.
“The power sector in Bangladesh has grown rapidly with maximum generation capacity increased from a little over 4,000 MW in 2009 to more than 20,000 MW in 2018,” said Jari Väyrynen, World Bank Team Leader for the Scaling-up Renewable Energy Project. “A strong collaboration between the public and private sector will help not only lower carbon emissions, but also meet energy demand .”