ADB extends $200mn loan to Bangladesh to promote energy efficiency
SUMMARY
The project will support the government’s efforts to reduce losses by installing 650,000 smart prepaid gas meters for residential customers. [Image: ADB]
By Shardul SharmaPOSTED IN:
The Asian Development Bank (ADB) will support Bangladesh's energy efficiency goals and clean energy transition with a $200mn loan, it said on November 22. This initiative aims to modernise the country's energy infrastructure.
The project will support the government’s efforts to reduce losses by installing 650,000 smart prepaid gas meters (SPGMs) for residential customers, primarily in South Dhaka and Narayanganj. Installing SPGMs is one of the climate mitigation measures specified in Bangladesh’s nationally determined contributions under the Paris Agreement. The project is expected to reduce around 400,000 tonnes/year of carbon dioxide emissions, ADB said.
Bangladesh's energy supply is highly dependent on natural gas. The gas distribution network suffers from significant losses due to old, dilapidated infrastructure and inefficient gas usage by unmetered residential customers, who currently pay a flat-rate tariff irrespective of consumption.
"Smart meters play a crucial role in encouraging behavioral changes among consumers, leading to reduced energy usage," remarked Atsumasa Sakai, ADB senior energy specialist. "This shift is particularly important for Bangladesh, whose economy is increasingly vulnerable to the fluctuating prices of imported energy sources."
Alongside the SPGMs, the project encompasses a comprehensive safety awareness programme for gas users and the promotion of safety standards for gas cooking appliances. These measures aim to minimise gas-related accidents and ensure safe energy access, particularly for vulnerable groups such as women and low-income communities.
The project also seeks to enhance the operational efficiency of Titas Gas Transmission and Distribution Company, Bangladesh's largest gas distributor. This involves the adoption of digital technologies, including smart meters integrated with a unified metering data management system and an automated web-based grievance management system.
To further Bangladesh's transition to low-carbon energy sources and reduce methane leakage in the gas distribution sector, the ADB has pledged an additional $1.75mn in technical assistance. This support will facilitate the preparation of pre-feasibility studies on clean energy solutions and explore the potential for private capital investment, including the utilisation of carbon credits.
The technical assistance will be funded by a $1bn grant from the Technical Assistance Special Fund and $750,000 from the Republic of Korea e-Asia and Knowledge Partnership Fund, both administered by the ADB.
