The World Bank on Tuesday approved $500 million to help Bangladesh expand and modernise the electricity distribution system and support the sustainable transformation of its electricity system.

The Electricity Distribution Modernisation Program will deliver improved electricity services to about 40 million people in Dhaka and Mymensingh Divisions, according to a release from the World Bank.

It will upgrade and construct more than 31,000 kms of distribution lines, 157 distribution substations, and related infrastructure, and incorporate measures to increase climate resilience of network infrastructure in 25 rural electric cooperatives (Palli Bidyut Samities) in the Bangladesh Rural Electrification Board.

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Network investment will be paired with new and advanced technologies to help modernising and transforming the electricity system.

World Bank Acting Country Director for Bangladesh Dandan Chen said in the last decade, Bangladesh achieved a more than fourfold increase in electricity generation capacity and delivered electricity connections to more than 99 percent of its population.

“But the electricity distribution network could not keep pace with the remarkable increase in electricity generation,” he said.

“This program will help modernize and ensure climate resilience of the distribution network, which is the backbone of a secure and reliable power system.”

The program will introduce a modern grid system that can support the two-way flow of electricity and information, minimizing and recovering quickly from climate and cyber risks, including natural disasters and extreme weather events.

It will introduce state-of-art technologies such as Supervisory Control and Data Acquisition System and install Advanced Metering Infrastructure.

It will support the decarbonization of the power sector by facilitating the integration of renewable energy and Battery Energy Storage Systems in the electricity distribution network.

All these will lead to a sustainable transformation of the electricity system.

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The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing, has a 30-year term, including a five-year grace period. In addition, the program also includes a $15 million grant from the Clean Technology Fund (CTF).

Including this program, the World Bank has over $1.8 billion ongoing support in Bangladesh’s energy sector, covering generation, transmission, and distribution of power, including from renewable energy sources.

Since 1981, the World Bank has partnered with BREB to support the government’s electrification and access programs.

Bangladesh currently has the largest ongoing IDA program totaling over $14 billion in support.

The World Bank was among the first development partners to support Bangladesh and has committed more than $35 billion in grants, interest-free and concessional credits to the country since its Independence.