Published : 23 Sep 2026, 02:16 PM
Updated : 23 Sep 2026, 02:16 PM
The Asian Development Bank (ADB) has approved a $200 million loan to modernise Bangladesh’s electricity distribution network in fast-growing industrial and urban areas around Dhaka.
The project will upgrade substations and more than 2,600km of distribution lines as the power network struggles to keep pace with rising demand, ageing infrastructure and technical losses, the ADB said in a statement on Wednesday.
The Power Distribution Network Enhancement Project will cover 13 Palli Bidyut Samities (PBSs), or rural electricity cooperatives, under the Bangladesh Rural Electrification Board (BREB).
The ADB said overloaded substations and growing exposure to natural hazards were also affecting electricity services in the areas covered by the project.
“As Bangladesh advances its vision of becoming a more prosperous, resilient, and globally competitive economy, modern power distribution networks will be essential to sustaining growth, creating more jobs, and attracting investment,” said Qingfeng Zhang, the ADB’s country director for Bangladesh.
He said the project would help “future-proof” the power system in key growth corridors around Dhaka and provide businesses and households with more reliable electricity.
The project will install 1,150 megavolt-amperes of new transformer capacity across 52 substations and add another 115 megavolt-amperes of capacity to 12 existing substations, according to the Manila-based lender.
More than 2,600km of overhead and underground distribution lines will be built or upgraded, with insulated conductors installed to improve reliability, efficiency and safety.
The project will also build river-crossing transmission structures and switching stations.
Another 900 fault locator sets will be installed to allow problems in the network to be detected more quickly and electricity supplies restored sooner.
Bangladesh achieved universal electrification in 2022, according to the ADB, but rapid urbanisation and industrial growth have continued to push up demand.
The bank said the upgrades would help the distribution network cope with that demand while making it more resilient to natural hazards.
Cutting Power Losses
Of the ADB loan, $146.52 million has been earmarked for resilience measures.
These will include gas-insulated switchgear technology that the bank describes as environment-friendly.
The ADB estimates that improved distribution efficiency and lower technical losses will reduce greenhouse gas emissions by about 203,751 tonnes of carbon dioxide equivalent a year.
The project will also provide training for BREB and PBS staff in areas including digital system integration, cybersecurity, natural hazard-resilient operations, environmental and social safeguards, and financial management.
The bank said improving the financial sustainability of the PBSs could help attract more private-sector participation and investment.
The project also includes measures aimed at increasing women’s participation in the power sector and improving workplace conditions.
How is it Funded?
The $200 million ADB loan will be supplemented by $107.95 million from the Bangladesh government and $141.39 million from BREB.
Together, those contributions put the project financing outlined by the ADB at $449.34 million.
A separate $1 million technical assistance grant from the Republic of Korea e-Asia and Knowledge Partnership Fund, administered by the ADB, will support institutional development, financial sustainability planning and the introduction of new technologies.
