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ADB approves $200m loan to modernise Bangladesh power distribution
Published : Wednesday, 23 September, 2026 at 7:11 PM
Observer online report
The Asian Development Bank (ADB) has approved a $200 million loan to modernise and strengthen the electricity distribution network in peri-urban areas around Dhaka, aiming to improve the reliability, efficiency and resilience of power supply for commercial and residential consumers.
The Power Distribution Network Enhancement Project will support the Bangladesh Rural Electrification Board (BREB) in upgrading distribution infrastructure operated by 13 rural electricity cooperatives, or Palli Bidyut Samitis (PBSs), serving rapidly growing industrial and urban areas around Dhaka.
The project is expected to increase distribution capacity and improve the stability and reliability of power supply in the targeted areas.
Implemented under ADB-supported initiatives, the project will address problems affecting electricity supply, including overloaded substations, ageing infrastructure, system losses and risks from natural disasters.
ADB Country Director for Bangladesh Chingfeng Zhang said modern power distribution networks were essential for sustaining growth, creating jobs and attracting investment as Bangladesh works towards a more prosperous, resilient and globally competitive economy.
He said the project would help future-proof the power system along key corridors around Dhaka through improved technology, stronger infrastructure and greater resilience, ensuring reliable electricity for businesses and consumers.
Under the project, 52 substations will receive new transformers with a combined capacity of 1,150 megavolt-amperes, while the capacity of 12 existing substations will be increased by 115 megavolt-amperes.
More than 2,600 kilometres of overhead and underground distribution lines will also be constructed or rehabilitated. Insulated conductors will be installed to improve network reliability, efficiency and safety.
River-crossing transmission structures and switching stations will be built to modernise system operations. In addition, 900 fault locator sets will be installed to enable faster fault detection and service restoration.
Bangladesh achieved its target of universal electricity access in 2022, but rapid urbanisation and industrialisation have continued to increase demand for electricity, putting pressure on the distribution network.
The project will help strengthen distribution capacity to meet growing demand while supporting climate-resilient and low-carbon development.
ADB's special resilience financing for the project amounts to $146.52 million. It includes support for adaptation measures such as environmentally friendly gas-insulated switchgear technology. Improved distribution efficiency and reduced technical losses are expected to help cut annual greenhouse gas emissions by around 203,751 tonnes of carbon dioxide equivalent.
The project will also strengthen the institutional capacity of BREB and PBSs through training in digital system integration, cybersecurity, disaster-resilient operations, environmental and social safeguards, and financial management.
It will support greater financial sustainability of PBSs, helping attract increased private-sector participation and investment. The project will also promote gender-responsive activities, including greater participation of women in the power sector and improvements in workplace conditions.
Alongside ADB's assistance, the Bangladesh government will provide $107.95 million and BREB $141.39 million in co-financing.
A $1 million technical assistance grant from ADB-administered Republic of Korea e-Asia and Knowledge Partnership Fund will support institutional development, financial sustainability planning and the adoption of innovative technologies.
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Editor : Iqbal Sobhan Chowdhury
Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
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Published by the Editor on behalf of the Observer Ltd. from Globe Printers, 24/A, New Eskaton Road, Ramna, Dhaka.
Editorial, News and Commercial Offices : Aziz Bhaban (2nd floor), 93, Motijheel C/A, Dhaka-1000.
Phone: PABX- 41053001-06; Advertisement: 41053012; 01793317829, 01550707291, E-mail: [email protected], [email protected] Online: email: [email protected] 41053014; 01550707297 Advertisement: 01550707296
