Dhaka: The government on Thursday signed a $217 million financing agreement with the World Bank’s International Development Association (IDA) to upgrade a unit in the Ghorashal power station, which will increase the unit’s existing electricity generation capacity by more than double.

Economic Relations Division (ERD) Additional Secretary Kazi Shofiqul Azam and World Bank Acting Country Director Rajashree Paralkar signed the agreement on behalf of the government and the World Bank, respectively, at the ERD in the city’s Sher-e-Bangla Nagar, reported UNB.

The Ghorashal Unit 4 Repowering Project will transform a gas-fired steam unit that is currently generating 170 MW into an energy efficient 409 MW plant. Such conversion to combined cycle technology will increase the plant’s overall efficiency from existing 30 per cent to 54 per cent while requiring only 18% more natural gas.

‘Bangladesh can grow its economy much faster and reduce poverty significantly if its energy infrastructure can meet the demand for reliable, low-cost electricity,’ said Rajashree Paralkar, World Bank Acting Country Director for Bangladesh.

‘The project will increase the efficiency in gas utilization of an existing unit, while adding new generation capacity to address the country’s severe power needs.’

The project will also reduce the specific fuel consumption per gigawatt hour by 44% and lower greenhouse gas emissions. In addition, the project will provide capacity building and institutional support to the Bangladesh Power Development Board.

‘The government has prioritized improving the efficiency of gas-based power plants, given the shortages in natural gas production,’ said Kazi Shofiqul Azam.

‘The repowering of the Ghorashal Unit 4 will quickly add new generation capacity without adding major infrastructure costs for fuel supply.’ He added.

With this credit, the World Bank’s total support to the country’s power sector passes $1.7 billion. In FY 16, the World Bank committed over $773 million in new financing in Bangladesh. The credit from IDA has a 38-year term, including a six-year grace period, and a service charge of 0.75 per cent.