The World Bank has committed to providing $515 million through two projects, one helping to expand electricity transmission networks and another to improve insurance coverage.
The two deals were signed at Economic Relations Division (ERD) in the capital's Sher-e-Bangla Nagar yesterday.
Mahmuda Begum, additional secretary to the ERD, and Qimiao Fan, WB country director for Bangladesh, Bhutan and Nepal, represented the two sides.
The $450 million worth of Enhancement and Strengthening of Power Transmission Network in Eastern Region Project would improve supply and reduce load shedding in the eastern region, covering greater Comilla and Noakhali and a part of greater Chittagong, said a WB statement.
About 275,000 households and 16,000 agricultural consumers will get new electricity connections while 13 new substations will be built and an existing one rehabilitated, it said.
One 230 kV transmission line through greater Comilla and four short distance 132 kV lines in Comilla and Noakhali will also be built, it added.
The statement said the Insurance Sector Development Project of $65 million would help strengthen the Insurance Development and Regulatory Authority's regulatory and supervisory capacity.
This will also happen for state-owned insurance bodies Shadharan Bima Corporation and Jiban Bima Corporation through modernisation of their systems and business practices, it said.
It will also help enhance Bangladesh Insurance Academy's capacity into becoming a reliable resource for training and research, addressing a severe lack of insurance professionals, it said.
The power project will receive a scale-up facility credit from International Development Association (IDA), a WB wing. It has a maturity period of 35 years, including a four-year grace period.
The insurance project will receive interest-free IDA credit, repayable in 38 years, including a six-year grace period and a service charge of 0.75 percent.
“Only investing in power generation is not sufficient, unless that is supported by improvement in transmission and distribution,” said Fan.
“By supplying uninterrupted power to Mirsharai Economic Zone, port, airport or other key economic facilities, the project will help unlock private sector growth,” he said.
In Bangladesh, insurance penetration is particularly low: less than 1 percent of the population has insurance coverage, he added.
Mahmuda said the 7th Five-Year Plan includes a vision for providing electricity to all and improving insurance coverage. “Both projects will contribute to creating more and better jobs, and boosting growth,” she said.