The government on Tuesday signed two financing agreements totaling $515 million with the World Bank to help expand electricity transmission network and improve insurance coverage, reports BSS.
The agreements were signed by Economic Relations Division (ERD) Additional Secretary Mahmuda Begum and World Bank Country Director Qimiao Fan on behalf of the government of Bangladesh and the World Bank, respectively, at the ERD.
The $450 million Enhancement and Strengthening of Power Transmission Network in Eastern Region Project will improve reliable electricity supply and reduce load shedding in the eastern region, covering greater Cumilla and Noakhali and part of greater Chattogram.
About 275,000 households and 16,000 agricultural consumers will get new electricity connection.
The project will build 13 new substations and rehabilitate an existing one in the country's eastern part. These will also help integrate renewable energy and new generations into the grid.
"In recent years, the government has significantly increased power generation. But, only investing in power generation is not sufficient, unless that is supported by improvement in transmission and distribution," said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan, and Nepal.
"By supplying uninterrupted power to Mirsharai Economic Zone, port, airport or other key economic facilities, the project will help unlock private sector growth,"he added.
The $65 million Insurance Sector Development Project (ISDP), also signed today, will help strengthen the regulatory and supervisory capacity of the Insurance Development and Regulatory Authority (IDRA), and the country's two state-owned insurance corporations-Shadharan Bima Corporation and Jiban Bima Corporation-through modernizing their systems and business practices.
It will also help enhance the capacity of the Bangladesh Insurance Academy to become a reliable resource for training, and research, and thereby address the severe lack of insurance professionals.
"Insurance helps people, especially the poor, and businesses to protect themselves from shocks. But, in Bangladesh, insurance penetration is particularly low: less than one percent of the population has insurance coverage. This project will help individuals, families, and businesses increase insurance coverage" added Qimiao Fan.
"The 7th Five-Year Plan includes a vision for providing electricity to all as well as improving the insurance coverage," said ERD Additional Secretary Mahmuda Begum.
"Both projects will contribute to creating more and better jobs, and boosting growth," she added.
The credits are from the International Development Association (IDA), the World Bank's concessional lending arm. The Power Transmission Project will receive a scale-up facility credit from IDA, which has a 35-years maturity including a four-year grace period.
ISDP will receive interest-free IDA credit, which is repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent.