The government today signed a $185 million financing agreement with the World Bank to add about 310 megawatts renewable energy generation capacity, which will contribute to reliable, affordable electricity and cleaner air.

The Scaling-up Renewable Energy Project will focus on utility scale solar photovoltaic (PV) and rooftop PV to expand new markets in renewable energy generation it the country.

The project will establish the country’s first large-scale 50MW grid-tied solar PV generation plant in Feni district, which will be implemented by the Electricity Generation Company of Bangladesh (EGCB).

To fill the gap in the long-term domestic financing market for renewable energy, the project will also support the Infrastructure Development Company Limited (IDCOL) to manage a Renewable Energy Financing Facility for both rooftop and utility scale solar PV.

It will also help Sustainable and Renewable Energy Development Authority (SREDA) identify sites for large-scale projects and promote new net metering policy for rooftop PV.

“Since the last decade, the World Bank has helped Bangladesh increase access to electricity in rural areas through renewable energy. Today, Bangladesh has one of the world’s largest domestic solar power program that serves about one-tenth of the country’s population,” said Dandan Chen, acting WB country director for Bangladesh and Bhutan.

“Now, we are going one step further to help Bangladesh expand renewable energy generation on a larger scale. With strong collaboration between the public and private sector, we hope the project will help meet the growing energy demands of the population.”

The project will help unlock private investment and will aim to raise up to $212 million in financing from the private sector, commercial banks, and other sources.

“The project will be important for Bangladesh to tap into its potential for renewable energy generation. Further, it will help reduce a substantive amount of CO2 emissions per year, which is in line with the country’s nationally determined contribution to the Paris climate agreement,” said Monowar Ahmed, secretary of Economic Relations Division, Government of Bangladesh.

The $185 million credit also includes a $26.38 million loan and a $2.87 million grant from the Strategic Climate Fund (SCF) of the World Bank’s Climate Investment Funds (CIF). The credit from the World Bank’s International Development Association (IDA) has a 30-year term, including a five-year grace period, and an interest rate of 1.25 per cent with a service charge of 0.75 per cent. The SCF loan has a maturity of 40 years, including a grace period of 10 years with a service charge of 0.1 per cent.

The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed more than $30 billion in grants, interest-free and concessional credits to Bangladesh. With this project, the WB’s ongoing support in the energy sector totals close to $2.4 billion, covering generation, transmission, and distribution, including renewable energy.