ADB to provide $200 million to promote energy efficiency, transition in Bangladesh

The Asian Development Bank (ADB) and the government of Bangladesh on Tuesday signed a loan agreement for $200 million to help Bangladesh enhance energy efficiency through smart metering as well as support its transition to clean energy solutions.

Md. Shahriar Kader Siddiky, secretary, Economic Relations Division, and Edimon Ginting, ADB country director for Bangladesh signed the agreement on behalf of Bangladesh and ADB, respectively.

The Smart Metering Energy Efficiency Improvement Project will support the government’s efforts to reduce losses by installing 650,000 smart prepaid gas meters (SPGMs) for residential customers, primarily in South Dhaka and Narayanganj, said the Manila-based lending agency in a media release.

Installing SPGMs is one of the climate mitigation measures specified in Bangladesh’s nationally determined contributions under the Paris Agreement.

The project is expected to reduce around 400,000 tons of carbon dioxide emissions annually, ADB said.

“This project will help save gas; prevent gas wastage; build customers’ awareness of the safe and efficient use of gas; and improve the financial performance of the gas distribution company by improving revenue streams and reducing billing, collection, and monitoring costs,” said Ginting.

“This project will also contribute to meeting Bangladesh’s climate mitigation targets for the gas distribution subsector as set out in the updated 2021 nationally determined contributions,” he added.

The project increases the operational efficiency of the state-owned Titas Gas Transmission and Distribution Company Limited—the country’s largest gas distribution company—through transformational and modernized approaches.

This includes the promotion of the use of advanced digital technologies, such as smart meters connected with the unified metering data management system and an automated web-based grievance management system.

Combined with the improved safety awareness programme among customers and the promotion of safety standards for gas cooking appliances, the project also aims to reduce gas-related accidents and ensure safe energy access, especially for socially disadvantaged groups, such as women and residential users living in lower-income communities.

Through an accompanying technical assistance of $1.75 million, ADB will support the government in its low-carbon energy transition and methane leakage loss reduction plan for the gas distribution subsector.

This includes preparing pre-feasibility studies on innovative clean energy solutions and assessing the viability of accessing private capital for future project financing, including the use of carbon credits.

The assistance will be financed by a $1 million grant from the Technical Assistance Special Fund and $750,000 from the Republic of Korea e-Asia and Knowledge Partnership Fund, administered by ADB.