The Asian Development Bank (ADB) has announced that it will give $20 million loan to Bangladesh under its Power System Efficiency Improvement Project for the furtherance of off-grid solar solutions in the country.

The bank will also provide an additional $25.44 million in grant financing to encourage off-grid solar photovoltaic (SPV) pumping for agricultural irrigation. This grant includes $22.4 million from the Scaling up Renewable Energy in Low Income Countries Program, which comes under its Strategic Climate Fund, and another $3 million from the Clean Energy Fund for Output-based Aid under the ADB-administered Clean Energy Financing Partnership Facility.

“High diesel costs for irrigation are not sustainable and affordable for small farmers in rural Bangladesh,” said Aiming Zhou, Senior Energy Specialist at ADB.

In Bangladesh, about 4.58 percent of the total electricity generation is used for irrigation. But the erratic power supply makes the farmers struggle with electric pumps. The farmers use their pumps at night when power outages are less likely and grid electricity demand is lower. But in off-grid rural areas, operating the diesel pump for irrigation is the only option. According to an estimate, 11.06 million farmers are using diesel pumps for irrigation which consumes 1 million tons of diesel per year.

Replacing diesel systems with solar powered irrigation can improve energy security, reduce local pollution, and mitigate climate change.

ADB is trying to lower the high upfront cost of solar-powered pumping systems for agricultural irrigation. It will support installation of at least 2,000 solar pumping systems in off-grid areas with an estimated 19.3 MW peak of solar capacity. The project will also conduct an awareness campaign including workshops for the potential users on the SPV water pumping system installations and operations.

By replacing diesel pumping systems with SPV pumps, the project is expected to result in a reduction of 17,261 tons of carbon dioxide emissions annually.

Earlier, the World Bank also approved $55 million in financing to expand the use of renewable energy in rural areas of Bangladesh. The funds will be used to finance the Second Rural Electrification and Renewable Energy Development (RERED II) Project. It aims to install 1,000 solar irrigation pumps, 30 solar mini-grids, and about 4 million improved cooking stoves in rural areas.

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