AIIB to Continue Aiding Bangladesh to Strengthen Infrastructure

Asian Infrastructure Investment Bank (AIIB) will continue to support the strengthening of Bangladesh's infrastructure sectors to support the country's growth.

"Given its recent successes, Bangladesh still needs significant efforts on many fronts, such as resolving chronic infrastructure gaps and responding to climate change. AIIB is very optimistic about the prospects that will foster sustainable development in Bangladesh, "AIIB Key Operations Specialist Hongliang Yang told in an e-mail interview from Beijing.

He said the upcoming projects for Bangladesh will continue to help the country improve its infrastructure in sectors such as electricity, transport, water supply, and sanitation.

''Bangladesh is one of the founding members of the AIIB. AIIB is open to considering more of Bangladesh's infrastructure projects that are consistent with the Bank's mission, thematic goals, and business strategies, "he said.

The AIIB principal operations specialist said Bangladesh has maintained an impressive growth rate of more than six percent annually in the last decade with gross national income per capita rising steadily from US$800 in 2010 to around $1,900 in 2019.

The structure of its national economy is shifting from agriculture to manufacturing and services, he mentioned, saying sustained economic growth has rapidly increased the demand for infrastructures, such as energy, transport, and water supply and sanitation.

Recently, AIIB has authorized a $200 million loan to the Dhaka and Western Zone Transmission Grid Expansion Project to expand access to electricity and improve service quality in Dhaka and the western zone of the country.

With respect to the project, Hongliang Yang claimed that the project is in line with Bangladesh's growth goals and the Business Development Plan. "Compared with other countries, there is tremendous room for Bangladesh to improve the performance of its power system. High network losses threaten the financial health of power sector companies and their ability to contribute to the country's growth agenda, "he added.

He informed us that there is an urgent need to upgrade its power transmission and distribution network.

Hongliang Yang said the project is expected to add substantial value to the country’s economy and environmental sustainability.

“First, AIIB’s long-term financing support will help reduce the project’s financing uncertainty and move the project forward more quickly. Second, the project will help Power Grid Company of Bangladesh (PGCB) to strengthen its institutional capacity and improve project quality by applying international environmental and social standards and good practices,” he added.

By 2025, the Dhaka and Western Zone Transmission Grid Expansion Project is expected to reduce the number of annual power outages to 15 (from 60), decrease transmission losses to 2.50 percent (from 2.76 percent) and introduce 7.440 mega volt-amperes of power transmission.

The total cost of the project cost is around $750 million. Out of the project cost, $200 million will come from AIIB while $300 million from ADB, $0.75 million from People’s Republic of China Poverty Reduction and Regional Cooperation Fund and the rest of $249.25 million will come from the Bangladesh government.

AIIB is a multilateral development bank with a mandate to enhance social and economic efficiency in Asia. Headquartered in Beijing, it began operations in January 2016 and has now expanded to 102 licensed members worldwide.

By investing in sustainable infrastructure and other productive sectors in Asia and beyond, it better connects people, services and markets that over time will impact the lives of billions and build a better future.

Source: BSS