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Govt inks €162m energy loan deals with Germany’s KfW Bank

Originally posted in The Business Standard on 23 December 2022

The Economic Relations Division (ERD) of the Ministry of Finance and the KfW Development Bank of Germany have signed two loan agreements worth €162 million for the projects – Energy Efficiency in the Industry and Renewable Energy Programme II.

A grant agreement worth €19.5 million for implementing the “Renewable Energy Program III” was also signed on Thursday (22 December), said an ERD press release issued yesterday.

ERD Secretary Sharifa Khan and KfW Development Bank First Vice President and South Asia Director Carolin Gassner signed the agreements.

KfW Dhaka Office Director Michael Sumser and other senior representatives from the ERD and the KfW Dhaka Office attended the signing ceremony.

€82 million for the project “Energy Efficiency in the Industry” will support energy-intensive industries in Bangladesh with access to concessionary loans for extension and/or replacement of existing machinery and equipment, and more energy-efficient substitutes for production systems and processes, added the release.

The project also aims to realise a final energy consumption and associated CO2 reduction of at least 20%.

The programme will be executed by the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Ltd (BIFFL).

The other loan of €80 million will go for the project – Renewable Energy Program II. Both the renewable energy programs (II and III) will be executed by IDCOL.