Bangladesh receives $130m World Bank loan for rural solar project

The World Bank is providing Bangladesh with a $130m (£77m) loan to install solar energy panels capable of powering 300,000 rural households.

The Bank said the fund will go directly towards the installation of affordable solar home systems, which will help alleviate severe power shortages in the country's rural areas.

"Investing in grid electricity alone will not realise the government of Bangladesh's goal of universal access to electricity by 2020," said Robert Floyd, the World Bank's acting country director for Bangladesh, adding that of the country's 156 million citizens, only 40 per cent have access to power. " Many of these households in poor areas are too remote to connect to the electricity grid and would never receive electricity through conventional methods."

The loan, announced at the weekend, will come from World Bank affiliate the International Development Association, which provides low-cost lending and grants to the world's poorest countries. The credit matures in 2049, carrying a service charge of 0.75 per cent.

Aside from solar panels, part of the funding will also be used to buy and install about 10 million energy-efficient compact fluorescent lamps in densely populated areas, which will replace less-efficient incandescent lights.

The solar and lighting initiatives are part of Bangladesh's Rural Electrification and Renewable Energy Development project, which aims to extend the national grid to rural districts. It also intends to use solar and biomass technologies to provide low-carbon power to villages off the grid.

Since 2003, the scheme has connected 600,000 citizens to the electricity grid and provided 320,000 people with solar home systems, according to government figures.
The database of social enterprise Devex lists the overall cost of the project at $266m, with the IDA providing $191m. However, it is not clear if the $130m loan is included in the figure.