Dhaka: Agence Française de Développement (AFD), the French development finance institution, is going to provide a loan worth 100 million Euros (equivalent to Tk 850 crore) for establishing a stronger, more reliable and cleaner electricity network in Dhaka.

AFD will sign a loan agreement with the Economic Relation Division (ERD) of the Ministry of Finance on June 1 to focus more precisely on strengthening the distribution network of South Dhaka.

French Ambassador in Dhaka Madam Sophie Aubert will attend the loan agreement signing ceremony to be held at ERD in the capital, said an AFD release on Wednesday.

Under the Power System Expansion & Efficiency Improvement Investment Program, AFD will fund the construction of 14 new transformer sub-stations - seven 132/33kV sub-stations and seven 33/11kV sub-stations - as well as associated electric lines. Dhaka Power Distribution Company (DPDC) will be entrusted with the task of implementing this part of the project.

AFD has teamed up with the Asian Development Bank (ADB), the European Investment Bank (EIB) and the Islamic Development Bank (IDB) to finance the Power System Expansion and Efficiency Improvement Investment Program (PSEEIIP).

The objective of this ambitious project is to modernise and strengthen both production and distribution capacities of Bangladesh’s power system.

After the Greater Dhaka Sustainable Urban Transport Project (BRT – Bus Rapid Transit System) and the Dhaka Environmentally Sustainable Water Supply Project (Gandharbpur Water Treatment Plant), it constitutes the 3^rd major project financed by AFD in Bangladesh.

It is estimated that the living conditions of 1.25 million households will be improved once the AFD-funded project is implemented.

AFD, which opened its Dhaka office only two years ago and already sanctioned loans worth 190 million Euros to the Government of Bangladesh, is once again confirming its engagement to invest durably in the country.