The Bangladeshi government Thursday signed a 217 million U.S. dollars financing agreement with the World Bank's International Development Association (IDA) to upgrade a unit in a power station, which will increase the unit's existing electricity generation capacity by more than double.

The agreement was signed by Kazi Shofiqul Azam of Bangladesh's Economic Relations Division and Rajashree Paralkar of the World Bank on behalf of their respective sides in Dhaka.

The Washington-based lender said the Ghorashal Unit 4 Repowering Project will transform a gas-fired steam unit that is currently generating 170 MW into an energy efficient 409 MW plant.

Such conversion to combined cycle technology will increase the plant's overall efficiency from existing 30 percent to 54 percent while requiring only 18 percent more natural gas, it said.

"Bangladesh can grow its economy much faster and reduce poverty significantly if its energy infrastructure can meet the demand for reliable, low-cost electricity," said Rajashree Paralkar, World Bank Acting Country Director for Bangladesh.

"The project will increase the efficiency in gas utilization of an existing unit, while adding new generation capacity to address the country's severe power needs."

The project will also reduce the specific fuel consumption per gigawatt hour by 44 percent and lower greenhouse gas emissions, said the bank. In addition, it said the project will provide capacity building and institutional support to the Bangladesh Power Development Board.

"The government has prioritized improving the efficiency of gas-based power plants, given the shortages in natural gas production," said Kazi Shofiqul Azam, Additional Secretary, Economic Relations Division, government of Bangladesh.

"The repowering of the Ghorashal Unit 4 will quickly add new generation capacity without adding major infrastructure costs for fuel supply." Endit

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