The government today signed a $55 million financing agreement with the World Bank to expand renewable energy uses in rural areas.
The additional financing to the Second Rural Electrification and Renewable Energy Development (RERED II) Project will install 1,000 solar irrigation pumps, 30 solar mini-grids, and about 4 million improved cookstoves in rural areas, reads a WB press release.
The agreement was signed by Kazi Shofiqul Azam and Qimiao Fan on behalf of the government and the World Bank, respectively, at the Economic Relations Division in Dhaka.
“This additional financing will help scale up use of clean and renewable energy such as solar irrigation pumps and solar mini-grids, which will help reduce poverty, improve the environment, create jobs, and open up new opportunities for rural people,” the press note said quoting Qimiao Fan, WB country director for Bangladesh, Bhutan, and Nepal.
The credits are from the International Development Association, the WB’s concessional lending arm, which provides grants or zero-interest loans. The credits have a 38-year term, including a six-year grace period, and a service charge of 0.75 per cent, it said.
With an additional $20 million support from the Green Climate Fund, the project will scale up the use of improved cookstoves, which emit 90 per cent less carbon monoxide and use half as much firewood as a traditional cookstove. These interventions will reduce greenhouse gas emissions and indoor air pollution.
“The government of Bangladesh targets a 100 per cent coverage of improved cookstove by 2030,” said Shofiqul Azam adding that, “The additional financing will be important to ensure that every rural household has an improved cookstove.”