The European Union (EU) and the French Development Agency (AFD) signed a contribution agreement to support advanced digital solutions in power and energy sector in Bangladesh
Dhaka, 17 December 2020
PR/8/20
For immediate release
Press Release
Today the European Union (EU) and the French Development Agency (AFD) signed a contribution agreement of EUR 12,400.00 million (around BDT 1,274,000) to support advanced digital solutions in power and energy sector in Bangladesh. This agreement contributes to a larger joint investment of EUR 112,400.00 million. The project is called “Power Factor Improvement and Smart Grid under Dhaka Power Development Company (DPDC) Dhaka, Bangladesh” and has the following main features:
- A total of 1,141,000 people will benefit from a significant improvement in the quality of electricity service;
- It helps fight climate change by preventing an accumulated 104,000 tons of CO2 emissions per year;
- It is the first ever-smart grid project in Bangladesh.
With this project, AFD and the EU are reinforcing their role in supporting the Government in the search for and use of advanced digital solutions in distribution stations and in medium-voltage grids. The goal is to equip existing infrastructure with these new, innovative and reliable technologies in order to ensure services are prepared for the future.
A core aspect of Bangladesh’s economic development strategy is an improved performance of the power sector in terms of generation, transmission, and distribution.
Today, the smart grid in Bangladesh is in its infancy and merely consists of deploying smart meters. Overall, and not just including the project with the DPDC, the smart grid solution is of great operational value. It makes it possible to carry out maintenance upstream of failures and to optimize the use of equipment (power transformers, circuit breakers, etc.). Real-time algorithms will continuously analyze the hardware connected to the grid and thus extend its life. The digital presence at all levels of the network allow for better knowledge of the network and anticipation of outage-related events. The smart grid gives a more reliable, accessible grid. Improving its (grid) performance will consequently eliminate the pollution caused by the diesel generators which are used as back-up during grid outages.
Maurizio Cian, Head of Cooperation – Head of Unit of the EU Delegation to Bangladesh, said “Today the European Union confirms its commitment to supporting advanced digital solutions in power in Bangladesh towards the decarbonisation objectives thanks to the joint effort with one of our European Member States, France. This effort is important in view of the future Team Europe Initiative on the Green Energy Transition and allows us transformative, low-carbon development in Bangladesh, for the sustainable development of the country.”
Benoit Chassatte, AFD Country Director said “For AFD in Bangladesh, 2020 was an opportunity to amplify existing commitments to modernize Dhaka’s power grid. This project (112M€) is the first ever initiative in Bangladesh to equip the existing grid with reliable, cutting-edge new technology, allowing DPDC to optimize energy distribution without making an unnecessary additional heavy network capital investment. In addition, AFD has increased its commitment in the energy and power sector in Bangladesh by financing (151.56 M€) in 2020 the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Limited (BIFFL), both public financial institutions specializing in the financing of infrastructure and renewable energy projects, and the promotion of green initiatives.”
Background information
About AFD
French Development Agency (AFD), the world’s oldest development agency, is public and solidarity-based development bank aims to help build ‘a world in common’. AFD Group is a central actor in France’s Development policy and supports state, companies, local authorities and NGOs. It operates in a number of sectors (energy, health, biodiversity, water, urban planning, and capacity development) and offers a wide range of financial and non-financial services. The main priority is to fight against climate change and poverty, and help stabilize fragile or post-crises crisis countries to fight against. Through its network of 85 agencies, AFD operates in 108 countries, where it is currently financing, monitoring and supporting over 2500 projects.
In Asia and the Pacific, AFD promotes green and inclusive growth and low carbon economic. Climate is at the core of AFD’s strategy in South Asia where or project expected to offer no less than 70% climate co-benefit.
Present in Bangladesh since 2012, AFD supports projects in urban development and infrastructure, as well as in the power & green energy sectors. In addition, AFD also focusses on corporate and social responsibility. As of 2020, AFD has committed 910 million euros to Bangladesh including 24 million euros in the form of grants.
About Dhaka Power Distribution Company (DPDC):
In Dhaka, there are two distribution companies namely, DPDC and DESCO. AFD is currently financing through a EUR130m loan a project for expansion and strengthening the DPDC power network system under Power System Expansion and Efficiency Improvement Investment Programme (PSEEIIP).
DPDC has an operating service area of about 350 square kilometres and provides distribution services to more than 1.2 million customers of Dhaka City Corporation areas and Narayanganj city. The distribution system consists of 61 substations and 5,213 kilometres of lines.
DPDC provides distribution services through thirty-six Network Operations and Customer Services (NOCS) offices.
The mission of this electric utility company is:
- to deliver quality electricity with service excellence,
- to make electricity available on demand within the geographical area of DPDC,
- to ensure customers’ satisfaction,
- to develop a new mind-set for all of the employees congruent with corporate culture,
- to reach self-sufficiency and profitability by increasing income and reducing expenditure.
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