ADB Approves $175M Loan to Modernize Power Grid in Chittagong Hill Tracts

The Asian Development Bank (ADB) has officially approved a significant loan amounting to 175 million dollars, equivalent to approximately 2,148 billion taka based on an exchange rate of 122.79 taka per dollar, dedicated to modernizing and upgrading the power network in the Chittagong Hill Tracts. Announced on September 1, this major regional development initiative spans the three remote districts of Khagrachhari, Rangamati, and Bandarban, a geographically challenging area where approximately 1.84 million people reside. Currently, grid connection rates in these remote regions remain critically low, standing at only 49 percent in Khagrachhari, 43 percent in Rangamati, and 41 percent in Bandarban. To address these infrastructural deficits, the project sets a comprehensive target to elevate the overall grid facility coverage rate up to 68 percent by the year 2032.

As the designated executing and implementing agency for the undertaking, the Bangladesh Power Development Board (BPDB) will oversee the extensive infrastructural works across 26 remote sub-districts within the three hill districts. The financial framework of the project incorporates multiple funding streams alongside the primary ADB loan. Specifically, the Japan Fund for Prosperous and Resilient Asia and the Pacific, supported by the Government of Japan, is providing a grant of 2.72 million dollars. In addition to these external funds, the Government of Bangladesh is contributing 36.54 million dollars, while the implementing partner BPDB is providing an additional 45.65 million dollars to ensure the successful execution of the modernization plans.

The physical scope of the electrification and grid improvement project is vast, encompassing the construction of six new 33/11 kilovolt substations each possessing an 80 megavolt-ampere capacity, alongside the building of 5,032 kilometers of brand-new distribution lines. Furthermore, the project mandates the comprehensive renovation of 1,874 kilometers of older distribution lines, four existing substations, a single switching station, and one regional repair workshop. Beyond basic grid expansion, the infrastructure plan integrates climate-friendly and social welfare components, including at least 30 solar-powered safe drinking water supply facilities, solar backup systems installed in at least 20 institutions, and the establishment of three customer complaint centers alongside three day-care centers equipped with digital monitoring facilities.

Upon full implementation, the project is projected to generate profound socio-economic and environmental impacts for the local population, directly benefiting at least 88,000 additional families, which includes 35,000 families from various ethnic minority groups. The environmental dividends are equally notable, as the modernization initiatives are expected to successfully avoid at least 19,300 tons of carbon dioxide equivalent emissions every single year. Furthermore, the project emphasizes human capital development and gender inclusivity by securing at least 30 percent participation for women, providing livelihood training to at least 1,000 individuals, offering business incubation support to more than 200 entrepreneurs, and conducting energy sector career and disaster-resilient energy system orientations for 300 students.

Highlighting the transformative potential of the development efforts, ADB Director General Kingfong Zhang stated that reliable electricity serves as a powerful driving force for employment, enterprise, education, healthcare, and building social resilience. Zhang emphasized that the project will assist remote communities in the Chittagong Hill Tracts by providing safe and reliable power access, which in turn will enhance livelihood opportunities, accelerate women's participation, and propel Bangladesh's transition toward a sustainable and low-carbon future.