DHAKA, March 6, 2020 (BSS) – The Asian Infrastructure Investment Bank (AIIB) will continue its supports for strengthening Bangladesh’s infrastructure sectors to sustain the country’s development.
“Despite its’ recent achievements, Bangladesh still needs substantial efforts on many fronts, such as addressing persistent infrastructure deficits and adapting to climate change. AIIB is very positive on opportunities which will promote Bangladesh’s sustainable development,” AIIB Principal Operations Specialist Hongliang Yang told BSS in an email interview from Beijing.
He said the upcoming projects for Bangladesh will continue to help the country strengthen its infrastructure in sectors, such as energy, transport, and water supply and sanitation.
“Bangladesh is one of the founding members of AIIB. AIIB is open to considering more infrastructure projects from Bangladesh that are aligned with the Bank’s mandate, thematic priorities and sector strategies,” he added.
The AIIB principal operations specialist said Bangladesh has maintained an impressive growth rate of more than six percent annually in last decade with gross national income per capita rising steadily from US$800 in 2010 to around $1,900 in 2019.
The structure of its national economy is shifting from agriculture to manufacturing and services, he mentioned, saying sustained economic growth has rapidly increased the demand for infrastructure, such as energy, transport, and water supply and sanitation.
Recently, AIIB has approved a $200 million loan for the ‘Dhaka and Western Zone Transmission Grid Expansion Project’ to increase access to electricity and improve service efficiency in Dhaka and the country’s western zone.
Regarding the project, Hongliang Yang said the project is in line with Bangladesh’s development priorities and sector development plan. “Compared to other countries, there is significant scope for Bangladesh to improve its power system performance. The high system losses undermine the financial health of power sector entities and their capacity to contribute to the country’s development target,” he said.
He informed that there is an urgent need to upgrade its power transmission and distribution network.
Hongliang Yang said the project is expected to add substantial value in the country’s economy and environmental sustainability.
“First, AIIB’s long-term financing support will help reduce the project’s financing uncertainty and move the project forward more quickly. Second, the project will help Power Grid Company of Bangladesh (PGCB) to strengthen its institutional capacity and improve project quality by applying international environmental and social standards and good practices,” he added.
By 2025, the Dhaka and Western Zone Transmission Grid Expansion Project is expected upon completion to reduce the number of annual power outages to 15 (from 60), reduce transmission loss to 2.50 percent (from 2.76 percent) and add 7,440 megavolt-amperes of power transmission capacity.
The total cost of the project cost is around $750 million. Out of the project cost, $200 million will come from AIIB while $300 million from ADB, $0.75 million from People’s Republic of China Poverty Reduction and Regional Cooperation Fund and the rest of $249.25 million will come from the Bangladesh government.
AIIB is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, it began operations in January 2016 and has now grown to 102 approved members worldwide.
By investing in sustainable infrastructure and other productive sectors in Asia and beyond, it better connects people, services and markets that over time will impact the lives of billions and build a better future.