Originally posted in The Financial Express on 24 December 2022
The German KfW Development Bank will provide Euro 181.5 million in assistance to Bangladesh for increasing energy efficiency in local industries and developing renewable-energy sources here.
The KfW signed two loan agreements and a grant agreement with the Economic Relations Division (ERD) in Dhaka on Thursday, a statement said on Friday.
Of the Euro 181.5 million funds, the development partner will provide Euro 82 million to the project – “Energy Efficiency in the Industry” and Euro 80 million to “Renewable Energy Programme II” – and Euro 19.5 million grant to “Renewable Energy Programme III”.
Sharifa Khan, Secretary of the ERD, and Carolin Gassner, First Vice President and Director, South Asia of the KfW, signed the agreements.
Michael Sumser, Director, the KfW Dhaka Office, and other senior representatives from the ERD and the KfW, attended the signing ceremony.
The “Energy Efficiency in the Industry” project will support the energy-intensive industries in Bangladesh with access to concessionary loans for extension and/or replacement of their existing machinery and equipment along with more energy efficient substitutes for production systems and processes.
As a result, final energy consumption and associated carbon-di-oxide (CO2) reduction by at least 20 per cent will be realised. The programme will be implemented by the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Limited (BIFFL).
Furthermore, the IDCOL will also implement the “Renewable Energy Programme II” and the “Renewable Energy Programme III”.
The main objective of these programmes is to increase use of renewable energy sources and to reduce CO2 emission in the Bangladesh power sector.
The IDCOL and the BIFFL will extend concessional loan facility to renewable energy sector investors in combination with the grant funds.
A total of Euro 18.5 million will be utilised for dissemination of off-grid renewable energy, like solar irrigation pumps, domestic biogas plants, etc.
Additionally, Euro 1.0 million grant will be used for providing support and capacity building in technical assessment of the projects, their monitoring, training, and project acquisition as well as development of pipeline projects.
Since 1972, Germany has been providing financial and technical assistances to Bangladesh for its socio-economic development. The signed agreements are a continuation of development cooperation between the two countries