The Asian Development Bank (ADB) approved a $500 million loan to develop a "state-of-the-art" 800 megawatt (MW) power plant in Khulna, Bangladesh, along with associated connections to natural gas and power transmission facilities, the bank announced Tuesday.
"In the face of rising demand for energy in a growing economy, the Rupsha power plant will be the first of its kind in Bangladesh, vastly increasing the availability of efficient and cleaner energy," said ADB Energy Specialist Aziz Yusupov in a statement.
"By providing additional electricity supply to about 300,000 consumers, the plant will stimulate business expansion and create new job opportunities," he added.
According to the statement, the total cost of the project is $1.14 billion, with the Islamic Development Bank contributing $300 million in co-financing and the government contributing $338.5 million on top of ADB's support.
The project is due to be completed by the end of June 2022.
The plant, Rupsha, will use the latest combined cycle technology, "which offers the highest efficiency to convert gas to electricity," the statement read.
"It will also use the most advanced water treatment processes to purify and recycle liquid waste at the end of the industrial process, leaving zero discharge," it said.
To supply gas to the Rupsha power plant, the project will construct gas distribution pipelines of 12 kilometers (7.45 miles). The project will also finance construction of a 230-kilovolt switchyard at the power plant and 29 km (18 miles) of high capacity transmission lines to transfer generated electricity from Rupsha to the grid.
According to the bank, the country faces a major challenge in providing modern and affordable energy, while suffering from recurring generating capacity shortages in the power sector.
"In financial year 2017, peak demand was estimated at 10,400 MW while available generation capacity was just 9,479 MW," it said, adding net peak demand was expected to exceed 13,300 MW by 2020 and 19,900 MW by 2025, while existing generation facilities would gradually retire and need replacement.
By Huseyin Erdogan