The Islamic Development Bank has given the go ahead for financing of a mega electricity production project in the People’s Republic of Bangladesh.
The approval for the US$ 200 million financing by IDB comes at a time when there is a sizable power shortfall of approximately 2000 mega.
The total cost of Ashuganj Power Station Efficiency Improvement Project which is scheduled to go on line by July 2016 is estimated to stand at US$ 557.7 million.
The project will facilitate replacement of old and inefficient 274 mega watt steam and gas turbine plant units in Ashuganj power station which have outlived their useful lifetime with a new high efficiency 450 mega watt combined cycle power plant.
In addition, it will also enable installation of three pilot renewable energy demonstration projects including a 5 mega watt solar photo-voltic (PV) grid-connected plant at Kaptai, an off-grid 7.5 mega watt wind-solar hybrid at Hatiya island and installation of 1000 km of street lighting based on solar PV and light emitting diode based technology, in six cities across the country.
Bangladesh, with an estimated population of 160 million, is among the most densely-populated countries in the world. The power sector is crucial to the current and future prosperity of the country through the supply of dependable electricity at rates that maintain the competitiveness of its economy and generate revenue for the financial viability of the sector.

Since it commenced operations, the IDB Group has approved 309 operations and projects totaling US$ 9.52 billion for Bangladesh covering different economic sectors such as agriculture, energy, health, education, industry and mining, transportation, trade, water, sanitation and urban services. Trade financing accounted for 90 percent of the IDB Group's intervention in Bangladesh.