France Development Agency (AFD) and the Bangladesh government have signed a financing agreement of Tk 1.24 billion (EUR 12 million) to support advanced digital solutions in the power and energy sector in Bangladesh.
The first ever smart grid project in the country titled ‘Power Factor Improvement and Smart Grid under Dhaka Power Development Company (DPDC) Dhaka, Bangladesh’ will be implemented over the next five years, says a media release.
The agreement is part of a larger multi-donor project involving the joint commitment of the European Union (EU) and the AFD, for a total investment of EUR 112 million, said the release.
Through the project, 1,141,000 people will benefit from a significant improvement in the quality of electricity service.
The project will also prevent an accumulated 104,000 tons of CO2 emissions per year, thereby contributing to Bangladesh’s climate goals.
With the project, AFD and the EU are reinforcing their role in supporting the government in the search for and use of advanced digital solutions in distribution stations and in medium-voltage grids.
Rensje Teerink, European Union Ambassador to Bangladesh, said, “The EU is committed to supporting Bangladesh in adopting advanced digital solutions in power distribution, in view of a sector decarbonisation, thanks to the joint effort with one of our Member States, France.”
“This project is also relevant for the Team Europe Initiative on Green Energy Transition, which involves the EU, its Member States, and like-minded partners. It aims at supporting Bangladesh in its transformative, low-carbon development, through increased use of renewable energy and energy efficiency enhancement,” he said.
Benoit Chassatte, AFD Country Director for Bangladesh, said, “For AFD in Bangladesh, 2020 was an opportunity to amplify existing commitments to modernise Dhaka’s power grid.”
“This is the first-ever initiative in Bangladesh to equip the existing grid with reliable, cutting-edge new technology, allowing DPDC to optimise energy distribution without making an unnecessary additional heavy network capital investment,” said the country director.
“In addition, AFD has increased its commitment in the energy and power sector in Bangladesh by financing (EUR 151.56 million) in 2020 the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Limited (BIFFL), both public financial institutions specialising in the financing of infrastructure and renewable energy projects, and the promotion of green initiatives,” he added.