The Asian Development Bank (ADB) has approved a $200 million loan to modernise and strengthen Bangladesh’s power distribution network in peri-urban areas around Dhaka, aiming to improve the reliability, efficiency and resilience of electricity supply for households and businesses.
The Power Distribution Network Enhancement Project will support the Bangladesh Rural Electrification Board (BREB) in upgrading electricity distribution infrastructure across 13 Palli Bidyut Samities (PBSs), or electric cooperatives, serving rapidly expanding industrial and urban areas surrounding the capital, according to ADB.
Under the ADB-supported Integrated Growth Network Development initiative, the project will address challenges including overloaded substations, ageing infrastructure, power losses and rising risks from natural hazards that affect electricity service delivery.
“As Bangladesh advances its vision of becoming a more prosperous, resilient and globally competitive economy, modern power distribution networks will be essential to sustaining growth, creating more jobs and attracting investment,” ADB Country Director for Bangladesh Qingfeng Zhang said.
“This project will help future-proof the power system in key growth corridors around Dhaka through advanced technologies, stronger infrastructure and enhanced resilience measures, ensuring that businesses and communities have the reliable electricity they need to thrive,” he added.
The project will install 1,150 megavolt-amperes of new transformer capacity across 52 substations and increase the capacity of 12 existing substations by 115 megavolt-amperes.
It will also construct or upgrade more than 2,600 kilometres of overhead and underground distribution lines and install insulated conductors to improve network reliability, efficiency and safety.
To modernise system operations, the project will build river-crossing transmission structures and switching stations, while deploying 900 fault locator sets to enable faster fault detection and restoration of services.
ADB said Bangladesh achieved universal electrification in 2022, but rising electricity demand driven by rapid urbanisation and industrial growth has increased pressure on the power distribution system.
The project will strengthen the capacity of the distribution network to meet growing demand while supporting Bangladesh’s climate-resilient and low-carbon development goals.
ADB’s dedicated resilience financing for the project amounts to $146.52 million. The funding will support adaptation measures, including the use of environment-friendly gas-insulated switchgear technology, which is expected to reduce annual greenhouse gas emissions by about 203,751 tonnes of carbon dioxide equivalent through improved distribution efficiency and lower technical losses.
The project will also enhance the institutional capacity of BREB and PBSs through training on digital system integration, cybersecurity, natural hazard-resilient operations, environmental and social safeguards, and financial management.
By improving the financial sustainability of PBSs, the project aims to encourage greater private sector participation and investment.
It will also promote gender-responsive practices, including measures to increase women’s participation in the power sector and improve workplace conditions.
ADB’s assistance will be complemented by $107.95 million in co-financing from the Government of Bangladesh and $141.39 million from BREB.
A $1 million technical assistance grant from the Republic of Korea’s e-Asia and Knowledge Partnership Fund, administered by ADB, will support institutional development, financial sustainability planning and the adoption of innovative technologies.
