WB to lend $78.4m financing to solar home program

New Age Online

The government on Monday signed a loan agreement with the World Bank under which the lending agency will provide $78.4 million additional financing to further scale-up its support for the successful solar home systems (SHS) program in Bangladesh.
The credit for the additional financing to the ‘Bangladesh Rural Electrification and Renewable Energy Development II (RERED II) Project’ is from the International Development Association (IDA), the World Bank Group’s soft loan arm.
The project will help install an additional 480,000 solar home systems that has emerged as a viable electrification option for areas without grid access to electricity.
Economic Relations Division (ERD) additional secretary Arastoo Khan and acting Head of World Bank, Bangladesh Christine E Kimes signed the agreement on behalf of the government of Bangladesh and the World Bank respectively at a simple ceremony at the ERD in city’s Sher-e-Bangla Nagar.
The IDA credit has 40 years to maturity with a 10-year grace period and carries a service charge of 0.75 percent.
Implemented as a public-private partnership, the SHS program is currently installing over 70,000 solar home systems every month, making it the fastest growing SHS program in the world. In Bangladesh, 3 million systems have already been installed with support from the World Bank and other development partners.
“Together, the Government of Bangladesh and the World Bank is scaling up a program that delivered development results for millions of rural Bangladeshis,” said Christine E. Kimes, acting Head, World Bank Bangladesh.
“This is a proven model that works. Investing in electricity in rural areas empowers both men and women, leading to increased income and growth opportunities and reducing poverty.”
Currently, only 42 percent of the people in rural Bangladesh have access to electricity, and reliance on the grid alone will not achieve the Government’s vision of universal access by 2021. Furthermore, the dispersed nature of rural settlements and the numerous rivers that crisscross the country make grid electrification in many areas difficult and expensive.
Off-grid renewable energy, like solar home system, has thus become the only option for electrification for millions living in the remote rural areas of Bangladesh.
Building on the successful implementation of the predecessor RERED project approved in 2002, the RERED II project has so far provided clean energy access to over 414,000 households benefiting over 2 million people through installation of solar home systems in remote villages. Over 1,450 biogas plants and 40 solar irrigation pumps have already been supported under the project.
“This repeater project is building up on our efforts to support the government’s vision of providing universal access to electricity,” said ERD additional secretary Arastoo Khan.
“The benefits of using solar homes systems include increased study time for children, empowerment of women through knowledge from TV viewing, income generation from mobile phone recharging services, as well as contribution to emissions reduction as a result of kerosene replacement,” he added.
The project has also started dissemination of improved cook stoves with a target to provide clean cooking solutions to over 1 million rural households. Access to clean cooking benefits women and children in particular, reducing respiratory diseases.

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