Germany commits another €238m for clean power and energy efficiency in Bangladesh

Dhaka parliament


More than €237 million will be provided by Germany for renewable energy and energy efficiency projects in Bangladesh as part of a near-€340 million long-term, soft loan agreement signed between the two nations.

The concessional finance will be used for energy transition projects by Bangladeshi authorities including the Infrastructure Development Company Limited (IDCOL), the Bangladesh Infrastructure Finance Fund Limited, and the Power Grid Company of Bangladesh, with the rest of the development cash to be spent on sustainable urban development; good governance; displacement and migration policy; training and sustainable growth for decent jobs; and biodiversity protection.


Moslema Naznin, deputy secretary for Bangladesh's Economic Relations Division, confirmed the agreement signed on Sunday will take the form of soft loans.

IDCOL officials have said some of the new credit line will fund rooftop and ground-mounted, grid-connected solar, and off-grid PV-powered irrigation pumps. The energy efficiency requirement will mean funds being made available for equipment in sectors such as the clothing and textiles industry.

Mahmood Malik, chief executive of IDCOL, said the government department has received more than €237 million to date from the German government, in the form of grants and loans. That figure includes the €60 million lent by development bank KfW which is driving rooftop solar in the South Asian nation, and a €20.5 million grant from the same source which is mostly going towards solar irrigation pumps and biogas projects.

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Previous backing has included a grant of €37 million received by IDCOL in 2005-06 from KfW and German development agency the Deutsche Gesellschaft für Internationale Zusammenarbeit, for solar home systems and biogas facilities.

With IDCOL also administering a $102 million (€85.6 million) rooftop solar loan package from the World Bank, Malik said the scale of funding provided by international donors meant the public body could consider backing ambitious projects such as a 12 MW solar rooftop project which has been proposed by unspecified entrepreneurs.

Peter Fahrenholtz, the German ambassador in Dhaka, welcomed the signing of the latest loan agreement on Sunday and said: “We are glad to continue our support for the Bangladeshi success story.”

The Bangladeshi government says the nation has 746 MW of clean power generation capacity.

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