Monday, January 19, 2009

Bangladesh and the $100 Million World Bank Loan

The World Bank continues to invest heavily in environmental projects. This is controversial as some suggest the World Bank should still to poverty alleviation.

I have just started a project looking at the environmental issues in Bangladesh and the World Bank and big players. This intervention is to be welcomed.

Is solar power in Bangladesh the answer? What is for sure is that of all the countries that will be badly affected by climate change and rising sea levels you can bet that Bangladesh will get the worst of it.

It should be the West and China/India that need more solar panels if Bangladesh is to be saved. The $100 solar power plant would surely be more efficient if it were set up in a different country although the energy shortages are real and need to be addressed somehow.

Bangladesh To Receive $100 Million Loan From World Bank [PlanetArk]

DHAKA - The World Bank plans to lend Bangladesh $100 million by June to promote renewable sources of energy, particularly solar power, officials said.

A delegation from the World Bank visited Bangladesh last week to explore the possibility of renewable energy development.

"Bangladesh has sought a $100 million loan to set up a solar power plant and to explore other sources of alternative energy in the country," an official of the World Bank told Reuters on Saturday.

"It may take couple of months to reach an agreement with the new government to promote renewable energy as the country's natural energy (gas) is depleting gradually," said the official, who declined to be named.

Bangladesh's main source of energy, natural gas, is depleting fast and its recoverable gas reserve will meet demand only up to 2012, the state-run oil, gas and mineral corporation, or Petrobangla, has said.

Bangladesh now faces a shortage of over 250 million cubic feet of gas per day (mmcfd) against demand for over 2000 mmcfd.

Compounding problems, power generation has been hampered over the last few years as nearly 80 percent of the country's electricity is produced using gas.

The government has formulated a renewable energy policy to encourage the private and public sectors to develop alternative sources of energy, with the aim of meeting up to 10 percent of total electricity demand through renewable energy.

Also on Saturday, Japan said it had pledged to lend Bangladesh nearly $440 million for power generation and bridge construction projects.

Prime Minister Sheikh Hasina, who is also in charge of ministry of power, energy and mineral resources, has asked that taxes and duties on the import of solar energy systems such as solar panels be waived.

"It will be done very soon and is a only matter of processing," government energy secretary Mohammad Mohsin said on Saturday.

At present, importers pay around 3 percent duty and 15 percent value-added tax to import solar panels.

The importers, mostly non-governmental organizations, have been urging the government to forego all taxes to promote the use of renewable energy.

Mohsin said the prime minister felt that solar energy systems had not made much progress in the country despite their huge potential.

Officials say that around 300,000 solar panels have been installed by different NGOs in the country.


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