Monday, 6 February, 2023
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ERD inks deal with kfw Development Bank for energy projects

Economic Relations Division (ERD) has inked three deals with kfw Development Bank for the development of the country's energy efficiency and renewable energy.

Two loan agreements totalling EUR 162 million for the projects titled "Energy Efficiency in the Industry" and the "Renewable Energy Programme II", and a grant agreement of EUR 19.5 million to implement the "Renewable Energy Program III" were signed on Thursday at ERD in the city, said a press release, said a press release.

Sharifa Khan, ERD Secretary, and Carolin Gassner, First Vice President and Director, South Asia, KfW Development Bank, signed the agreements on behalf of their respective sides.

The signing ceremony was attended by Michael Sumser, Director, KfW Dhaka Office, and other senior representatives from the ERD and the KfW Dhaka Office.

EUR 82 million for the project titled "Energy Efficiency in the Industry" will support energy-intensive industries in Bangladesh with access to concessionary loans for the extension and/or replacement of existing machinery and equipment, and more energy-efficient substitutes for production systems and processes.

Final energy consumption and associated CO2 reduction by at least 20 per cent shall be realized. The program will be executed by the Infrastructure Development Company Limited (IDCOL) and the Bangladesh Infrastructure Finance Fund Ltd. (BIFFL) which both act as Project-Executing Agencies.

 Furthermore EUR 80 million for the project titled "Renewable Energy Program II" and a grant of EUR 19.5 million to implement the "Renewable Energy Program III", were signed. The projects will be executed by the Infrastructure Development Company Limited (IDCOL) only, which acts as Project-Executing Agency.

 The main objective of the program is to increase the use of renewable energy sources and a reduction of CO2 emissions in the Bangladesh power sector. The Project-Executing Agency will extend concessional loans to renewable energy investors in combination with grant funds. A total of EUR 18.5m will be utilized for the dissemination of off-grid renewable energy, for example, solar irrigation pumps, domestic biogas plants etc.

 Since 1972, Germany has provided financial and technical assistance for the socio-economic development of Bangladesh. The signed Agreements are a continuation of development cooperation between the two countries.