WB assisting govt to light up rural Bangladesh
NATION BUSINESS REPORT
The World Bank is supporting a government initiative to increase rural people’s access to electricity through the Rural Electrification and Renewable Energy Development (RERED) project.
Under this project, more than 520,000 consumers in rural areas have received electricity connections since January 2003.
The Rural Electrification Board (REB) has so far constructed and renovated about 19,500 km of electricity distribution lines, which has helped REB reduce its system loss. Electricity in rural areas is used mainly for domestic and rural market lighting, operating small and medium enterprises, irrigation pumps and sometimes industries.
The government has embarked on a renewable energy scheme to provide electricity to remote areas where grid expansion is either difficult or expensive. Through the Infrastructure Development Company Ltd (IDCOL), the project is promoting Solar Home Systems (SHS). A SHS uses solar panel to generate electricity from sunlight, which can then stored in a rechargeable battery. This battery allows a household to switch on 3 to 4 light bulbs and one black and white television for at least 4 hours a day. The SHS scheme has been a highly successful program. So far more than 250,000 SHSs have been installed in rural Bangladesh by IDCOL through various NGOs working as Partner Organizations (POs).
Among other renewable energy options, the project has supported a 250kW biomass power plant as a pilot project. This biomass power plant is now under operation and supplies electricity to more than 300 consumers. This plant uses rice husk as fuel to generate electricity.
The successful operation of this plant has generated interest among local sponsors and IDCOL has received many more project proposals to finance similar types of plants in rural areas.
IDCOL is now in the process of financing another small biogas power plant. Upon the success of these projects, IDCOL will be able to use these power plants to training, demonstrate and create awareness among the local investors.
This has the potential to open up a new era where areas isolated from the national grid could generate their own electricity based on biomass and biogas fuels.
The Bangladesh government has requested for additional financing to install an additional 300,000 SHSs under the project. In response to this request, an IDA team has recently conducted a preliminary analysis of the suitability of bank financing.
The bank team has discussed with government and IDCOL counterparts whether in addition to SHS, other renewable energy based power plants, using biomass or biogas should be included in the project scope. IDCOL’s interest to finance projects promoting energy efficiency and energy conservation was also discussed.
If documented properly, these projects can be used to attract carbon financing. The team is expected to carry out a detailed appraisal in March 2009 to mobilize additional resources to continue funding this highly successful program.