The French Development Agency AFD has agreed to provide 100 million euros in loan to Bangladesh for the digitalisation of the country’s power and energy sector.
The deal aims to reinforce France’s role as an “active participant in the search for and use of advanced digital solutions in power and energy sector in Bangladesh”, the French embassy said in a statement on Thursday, reports bdnews24.com.
The support comes via AFD’s concessional sovereign loan and will go towards financing projects titled Construction and Augmentation of Substation and Installation of the Capacitor Bank in Power System under DPDC.
Fatima Yasmin, economic relations secretary, and Benoit Chassatte, AFD country director for Bangladesh, signed the credit facility agreement. Jean-Marin Schuh, ambassador of France to Bangladesh, was the co-signatory.
In addition to the loan, a grant facility agreement for a delegated grant worth 12 million euros from the European Union Alternative Investment Fund would be signed in the beginning of 2021, according to the statement.
AFD’s loan aims to equip existing infrastructure with these new, innovative and reliable technologies in order to ensure services are prepared for the future, the embassy said.
Moreover, by integrating digital technology in the projects, France speeds up the adoption of renewable energies, and thus contribute towards achieving Bangladesh’s Sustainable Development Goals or SDGs.
The additional 12 million euros grant will support piloting the smart grid project in five substations in Dhaka. The smart grid gives shape to this transformation by making the grid more effective and efficient.
A total of 1.141 million people are expected to benefit from a significant improvement in the quality of electricity service through the project. It will also help fight climate change by preventing an accumulated 104,000 tonnes of CO2 emissions per year.