The Asian Development Bank (ADB) and Muktagacha Solartech Energy Limited (MSEL) have entered into a financing agreement worth $24.3 million to construct a grid-connected solar photovoltaic (PV) power plant in Mymensingh, Bangladesh. The project aims to increase the share of renewable energy in the country’s power mix. According to the agreement, ADB will provide a loan of $15.5 million, while Leading Asia’s Private Infrastructure Fund 2 will provide an additional $8.8 million loan.
ADB acted as the sole mandated lead arranger for the financing package. The financing will be used to build and operate a 20-megawatt grid-connected solar power plant. The project is expected to generate 37.9 gigawatt-hours of electricity per year, which will reduce carbon emissions by 18,344 tonnes annually. This is one of the first private sector utility-scale solar facilities in Bangladesh to receive support from international financiers.
Bangladesh’s power sector is currently dominated by non-renewable energy sources, with renewable energy accounting for only 4.5% of the country’s total power capacity. The ADBMSEL partnership aims to promote private sector involvement in developing renewable energy in Bangladesh. The long-term financing provided by ADB will address the critical capital needs of renewable projects in the country.
ADB Director General for Private Sector Operations Suzanne Gaboury stated that, “the financing will help promote private sector involvement in developing renewable energy in Bangladesh.” In recent years, Bangladesh has seen a growing interest in renewable energy, with several projects. For instance a 25-megawatt solar power plant was commissioned in Chittagong, Bangladesh in 2020, which is expected to generate 35 gigawatt-hours of electricity per year. A 10-megawatt biomass power plant was also inaugurated in Khulna, Bangladesh in 2019, which is expected to generate 70 gigawatt-hours of electricity per year.
