The credit is to double the power generation and improve efficiency of the unit 4 at Ghorashal Power Station.
Bangladesh signed a loan agreement with the World Bank’s International Development Association (IDA) at the Economic Relations Division (ERD) in Dhaka today to upgrade the unit under a repowering project for the existing electricity generation capacity.
The IDA credit has a 38-year term, including a six-year grace period, and a service charge of 0.75%.
On implementation, the gas-fired steam unit will be transformed into a combined cycle one and is expected to more than double the power generation to 409MW from the existing generation of 170 MW.
It is also expected to improve the plant’s overall efficiency from existing 30% to 54% while requiring only 18% more natural gas.
“The project will increase the efficiency in gas utilisation of an existing unit, while adding new generation capacity to address the country’s severe power needs,” said Rajashree Paralkar, World Bank Acting Country Director for Bangladesh.
The conversion is expected to reduce the fuel consumption per gigawatt hour by 44% and lower greenhouse gas emissions.
In addition, it would provide capacity building and institutional support to the Bangladesh Power Development Board.
“The government has prioritised improving the efficiency of gas-based power plants, given the shortages in natural gas production,” said Additional ERD Secretary Kazi Shofiqul Azam.
“The repowering will quickly add new generation capacity without adding major infrastructure costs for fuel supply.”
With this credit, the World Bank’s total support to the country’s power sector crosses $1.7 billion, said a press release.
In FY 16, the World Bank committed over $773 million in new financing in Bangladesh.