$200m ADB loan to strengthen power supply around Dhaka

The Asian Development Bank (ADB) has approved a $200 million loan to modernise power distribution network in the fast-growing areas around Dhaka.

The Power Distribution Network Enhancement Project will support the Bangladesh Rural Electrification Board (BREB) in upgrading infrastructure across 13 Palli Bidyut Samities (PBSs) serving industrial and urban areas around the capital. It targets overloaded substations, ageing infrastructure, power losses and risks from natural hazards.

Under the project, 1,150 megavolt-amperes of new transformer capacity will be installed across 52 substations, while capacity at 12 existing substations will rise by 115MVA. More than 2,600 kilometres of overhead and underground distribution lines will be built or upgraded, along with insulated conductors to improve reliability and safety.

The project will also introduce 900 fault locator sets for faster fault detection and service restoration, plus river-crossing transmission structures and switching stations.

ADB Country Director for Bangladesh Qingfeng Zhang said modern power distribution networks would be essential to sustaining growth, creating jobs and attracting investment. 

He said the project would strengthen the power system in key growth corridors around Dhaka through advanced technologies and stronger infrastructure.

Bangladesh achieved universal electrification in 2022, though rapid urbanisation and industrial growth have continued to raise electricity demand and strain the distribution network.

The financing includes $146.52 million in dedicated ADB resilience funding, including support for gas-insulated switchgear technology. 

The ADB estimates that improved distribution efficiency and reduced technical losses could cut annual greenhouse gas emissions by around 203,751 tonnes of carbon dioxide equivalent.

The project will also build the institutional capacity of BREB and the PBSs through training in digital system integration, cybersecurity, natural hazard resilience, environmental and social safeguards, and financial management. 

The ADB said strengthening the financial sustainability of PBSs would help attract greater private-sector investment. Measures to boost women's participation in the power sector are also included.

ADB’s loan will be complemented by $107.95 million from the government and $141.39 million from BREB. 

A further $1 million technical assistance grant from South Korea’s e-Asia and Knowledge Partnership Fund will support institutional development, financial sustainability planning and adoption of new technologies.