Bangladesh wins World Bank solar power loan

DHAKA (Reuters) - The World Bank said on Saturday it will loan Bangladesh $130 million to install solar energy panels to power 300,000 households.

"The World Bank today approved a $130 million credit to Bangladesh, designed to increase access to electricity through installation of affordable solar home systems in rural areas," the statement said.

Only around 40 percent of Bangladeshis have access to electricity. Power shortages are severe, especially in rural areas.

In addition, population growth, increased industrialisation, additional connections, and rise in the use of modern, electrical appliances have boosted demand for electricity, currently growing at a rate of over 500 megawatts (MW) a year.

"Investing in grid electricity alone will not realise the government of Bangladesh's goal of universal access to electricity by 2020," said Robert L. Floyd, acting World Bank country director for Bangladesh.

A part of the financing will also be used to purchase and install about 10 million energy efficient compact fluorescent lamps in densely populated areas, replacing an equivalent number of incandescent lamps.

"Replacing these lamps, which will be free of charge for residential consumers, is expected to reduce the peak demand by about 360 MW," said Raihan Elahi, senior energy specialist of the World Bank.

The credit from the International Development Association (IDA), the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period and it carries a service charge of 0.75 percent.