The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
Project Information Document (PID)
Concept Stage | Date Prepared/Updated: 17-Oct-2022 | Report No: PIDC34676
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
BASIC INFORMATION
A. Basic Project Data OPS TABLE
Country Project ID Parent Project ID (if any) Project Name
Bangladesh P179429 Transmission Grid
Enhancement &
Modernization Project
(P179429)
Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead)
SOUTH ASIA Nov 24, 2023 Mar 29, 2024 Energy & Extractives
Financing Instrument Borrower(s) Implementing Agency
Investment Project Financing People's Republic of Power Grid Company of
Bangladesh Bangladesh
Proposed Development Objective(s)
The project aims to enhance transmission capacity and reliability of the grid network, improve efficiency in grid
operations and maintenance, and enable regional integration and evacuation of renewable energy generation.
PROJECT FINANCING DATA (US$, Millions)
SUMMARY-NewFin1
Total Project Cost 680.00
Total Financing 680.00
of which IBRD/IDA 450.00
Financing Gap 0.00
DETAILS -NewFinEnh1
World Bank Group Financing
International Development Association (IDA) 450.00
IDA Credit 450.00
Non-World Bank Group Financing
Counterpart Funding 230.00
Borrower/Recipient 230.00
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
Environmental and Social Risk Classification Concept Review Decision
High Track II-The review did authorize the preparation to
continue
Other Decision (as needed)
B. Introduction and Context
Country Context
1. Bangladesh has made rapid social and economic progress in recent decades and reached lower middle-income
status in 2015. Annual GDP growth averaged close to six percent since 2000. Strong labor market gains contributed
to a sharp decline in poverty, with the national poverty rate falling from 48.9 to 24.5 percent between 2000 and 2016,
while extreme poverty declined from 34.3 to 13.0 percent.1 However, the pace of poverty reduction slowed in recent
years even as growth accelerated, particularly in urban areas and in the west of the country. Annual consumption
growth of the bottom 40 percent (1.2 percent) trailed that of the overall population (1.6 percent) from 2010 to 2016.
2. While growth rebounded in FY21 and FY22, significant new headwinds emerged. Real GDP growth rebounded
as pandemic-related restrictions were progressively lifted in FY21, accelerating to an estimated 7.2 percent in FY22 as
private consumption and investment growth strengthened. Exports rose by 31.3 percent (y-o-y), buoyed by a gain in
readymade garment (RMG) market share in Europe and the United States. However, the economy faces new
headwinds. Inflation rose to 7.5 percent in as of July 2022 from 5.3 percent a year ago following a global surge in
commodity prices, prompting the BB to raise the main policy rate by 100 basis points. The current account deficit
widened as imports rose, exacerbated by a decline in official remittances inflows. A series of import suppression
measures were subsequently adopted, including rolling electricity blackouts, reductions in liquified natural gas (LNG)
imports, and reduced business and market hours. The overall balance of payments deficit rose to US$ 5.4 billion in
FY22, and gross foreign exchange reserves declined to US$ 36.5 billion by September 2022.
3. Bangladesh faces a high level of vulnerability to the effects of climate change. The Global Climate Risk Index
ranks Bangladesh as the world’s seventh most-affected country in 2000-20192. Rising temperatures leading to more
intense and unpredictable rainfalls during the monsoon season and the already high probability of catastrophic
cyclones are expected to further increase resulting in increased tidal inundation. Flooding in Bangladesh is a near-
constant phenomenon, recurring with varying magnitude and intensity, affecting a greater population than any other
natural hazard. Floods and riverbank erosion in Bangladesh affect about one million people annually and can be
substantially higher3. Once every three to five years, up to two-thirds of Bangladesh is inundated by floods.4
1 Household Income and Expenditure Surveys, 2000/01 and 2016/17.
2 German watch (2021) Global Climate Risk Index 2021.
3 World Bank: Climate Change Knowledge Portal.
4
The World Bank: Climate Risk and Adaptation Country Profile (Bangladesh)
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
Addressing these climate risks will support sustainable economic development, ensuring that the vulnerable
populations are not left behind.
Sectoral and Institutional Context
4. Institutionally, the Ministry of Power, Energy and Mineral Resource (MPEMR) in Bangladesh has the
responsibility for the power sector. The vertically integrated Bangladesh Power Development Board (BPDB) under
the MPEMR has been partially unbundled, starting in 1978. In 1994, the Government launched a power sector reform
program under which the Power Grid Company of Bangladesh (PGCB) was created as the transmission entity, which
also includes the National Load Dispatch Center, along with separate distribution and generation companies.
Currently, 51 percent of total grid-connected power is generated by public sector plants operated by BPDB, other
corporatized generation companies and a joint venture, 44 percent by private sector, and the remaining 5 percent
through power import.
5. In the last decade, the Government’s prioritization of generation and electrification has allowed Bangladesh to
make impressive progress in increasing access to electricity and power generation capacity, an achievement which
must now be followed by investments in the reliability of electricity supply. Total installed generation capacity has
increased from 6GW in 2010 to 22.5 GW in 2022 and in the same period, the average peak demand increased from
6GW to the current average peak demand of 12 GW in the country. Annual per capita electricity consumption (which
was one of the lowest in the world in 2010) has also more than tripled to 608 Kilowatt hours (Kwh) in 2022. Due to
this rapid growth of system demand, a considerable number of grid substations and transmission lines are presently
overloaded contributing to unreliable electricity supply in major load centers. This poses a major challenge for the
expansion of medium-size enterprises with export potential. As significant industrialization is expected to take place
after completion of some of the major infrastructure projects in the country, a steeper increase in power demand is
anticipated.5In addition, the increasing vulnerability of Bangladesh to climate change and natural hazards renders
investments in climate resilient power infrastructure a central condition of safe, affordable and reliable electricity. To
meet this future demand and ensure quality and uninterrupted electricity supply, the expansion of a climate resilient
transmission network is mandatory6.
6. As electricity supply in Bangladesh is still heavily reliant on fossil fuels, targeted grid expansion efforts are
required to increase Variable Renewable Energy (VRE) penetration and to facilitate electricity trade with hydro-rich
countries. In 2021, only 2% (0.5 GW) emanated from Variable Renewable Energy (VRE). However, only about 0.14 GW
of VRE was grid installed with a dispatchable capacity of 0.1 GW due to grid constraints7. If Bangladesh is to meet its
15% generation target of electricity from renewable energy sources (RES) by 20418 and make progress towards
decarbonizing its energy system, it must invest in grid expansion schemes to provide the required evacuation corridor
for the potential 6GW of VRE under the Business-as-Usual scenario by 2041. In addition, as Bangladesh plans to import
about 11GW of electricity from the Bangladesh-Bhutan-India-Nepal-Sri Lanka (BBINS) region by 2041, building multiple
corridors is being considered for electricity imports through cross-border interconnections. The Northern part of
6 This is particularly the case for the Project area as explained in section Project Context – A. Concept – 1. Description.
7 Grid reliability study for integration of renewable energy into the national grid of Bangladesh (September 2021), Power Division, GoB
8 According to its Power System Master Plan (PSMP2016).
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
Bangladesh is predominantly the expected area of regional interconnectivity to enable Bangladesh to benefit from
power trade9 with hydro-rich countries like Nepal and Bhutan.
7. Bangladesh’s transmission system mainly consists of 400 kilo-Volt (kV), 230 kV and 132kV systems; one 400kV
Back-to-Back HVDC system has been implemented, through which 1,160 megawatt (MW) power is being imported
from India every day. The country has about 13,889 circuit km of transmission lines and about 73,484 GWh of power
was wheeled through the transmission network during the FY 2020-21. Transmission loss of the network has come
down to 3.05 percent in 2020-21 from 4.24 percent in 2000-01. The country is vertically divided by the rivers Jamuna
and Padma. The Western and Eastern part of Bangladeshi network is interconnected by two 230kV double circuit lines.
8. PGCB, the sole authority of the transmission network in the country, undertook several development projects
to improve the network condition. To achieve the Government of Bangladesh (GoB) target of increasing power
generation to 40 giga-watt (GW) by 2030, further investment of about USD2.5 billion in enhancing and strengthening
the network is currently under consideration. The Eighth (8th) Five Year Plan (2020-2025) of the government clearly
prioritized the importance of developing transmission network to achieve the real benefits of the generation
expansion program through further development of transmission infrastructures which is also expected to reduce
transmission and distribution losses. The proposed project is a step towards achieving that target and will address the
need for network improvement in the important commercial routes in the Central, Southern and Northern Regions of
the country.
Relationship to CPF
9. The proposed operation is aligned with the draft World Bank Group’s (WBG) Bangladesh Country Partnership
Framework (CPF) 2023-2027 by making investments in key infrastructures that would directly supports the CPF’s
objective of increased sustainable and productive use of natural capital to facilitate green growth and energy
transition. More specifically this operations seeks to contribute to addressing objective 9, in the Bangladesh CPF
outcomes through the following pathways: a sustainable development pathway that is resilient to disasters and
climate change by enabling more renewable energy penetration into the energy mix, the improvement of delivery of
electricity services by strengthening power transmission infrastructure and improve gid reliability for better supply-
demand linkage, which is expected to facilitate higher levels of economic activity and poverty reduction in rural areas.
Finally, the proposed operation will also support the CPF objective 9 of regional power interconnectivity through the
development of regional power interconnection hub with India that would have the capacity to evacuate potential
hydro power from neighboring countries such as India, Bhutan and Nepal, which would create opportunities to
facilitate the implementation of a regional power pool.
C. Proposed Development Objective(s)
10. The project aims to enhance transmission capacity and reliability of the grid network, improve efficiency in grid
operations and maintenance, and enable regional integration and evacuation of renewable energy generation.
Key Results (From PCN)
11. The PDO-level results indicators are:
a. Increase in transformation capacity (Megavolt Ampere or MVA)
b. Reduction of the number of forced outages per substation per year (Percent)
9 Bangladesh has the potential to benefit about USD1.3 billion per annum (pa) from a flow of electricity from the region of about 16.7 TWh pa.
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Transmission Grid Enhancement & Modernization Project (P179429)
c. Grid integration enabled for large-scale renewable energy (Megawatt)
d. Improvement in operations and maintenance practices (Yes/No)
e. People provided with new or improved electricity services (Number)
12. Intermediate indicators are:
a. Transmission lines constructed (ckm)
b. Number of new substations installed or upgraded (Number)
c. Geographical Information system (GIS) infrastructure developed (Yes/No)
d. Emergency Restoration System (ERS) procured (Yes/No)
e. Power System protection software procured and deployed (Yes/No)
f. Increase in number of female staff hired in technical roles (Percent)
D. Concept Description
13. The proposed project is the continuation of Bank’s support to PGCB in improving reliability of the transmission
network, facilitating regional import and integrating renewable energy into the national grid. The project will involve
construction of 3 new 400kV and 5 new 230kV substations with a total capacity of 17,400MVA. The project will also
capture the upgradation of 4 existing substations, construction of 274ct-km of 400kV of new transmission lines and
95ct-km of 230kV transmission lines. The activities under the project are largely distributed across the Southern,
Central and Northern Regions of the country. With the added lines and substations, the system will be able to respond
to the increasing electricity demand, improve reliability and support economic growth in the project areas. It will help
provide evacuation corridor for new generation plants (including renewable energy-based generation) – expected to
be financed mostly by the private sector – by removing transmission bottlenecks and enabling better access to the
end-use market. The project will also facilitate regional power import, enhance grid resilience and introduce grid
digitization.
14. The proposed USD680 million (IDA USD450 million) operation is comprised of the following main components:
Component 1– Enhancement and modernization of Transmission system (IDA USD435 million): This component
will involve building transmission network infrastructures in central, southern and northern regions of the country
and improve efficiency in grid operations and maintenance.
Sub-component 1 – Grid enhancement for improving reliability in central region (IDA USD330 million): This sub-
component will cover the construction and upgradation of the required transmission lines and substations to
establish 400kV ring network for Dhaka region and improve system reliability. Electricity demand in this area is
significantly increasing due to the growing development activities. Currently about 35 to 40 percent of generated
electricity is consumed in Dhaka city and electricity demand of this area is forecasted to be tripled by 2041 (PSMP-
2016). The activities under this component are to (i) construct three (3) new 400 kV high-capacity transmission
rings, one (1) new 400/230/132kV substation and four (4) new 230/132 kV substations; and (ii) upgrade four (4)
existing 230/132 kV substations.
Sub-component 2 – Grid enhancement for enabling renewable energy integration in the southern region (IDA
USD68 million): This sub-component will address the future demand of the southern region and ensure
transmission facilities for evacuation of renewable energy generation in that area. Demand of electricity in Barisal
and Patuakhali will go up as significant industrialization is expected to take place in that area after completion of
some of the major infrastructure projects namely the Padma Multipurpose Bridge project and Payra Port. The
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
activities under this component are to construct one (1) new 400/230/132 kV substation and one (1) new
230/132kV substation.
Sub-component 3 – Grid Enhancement for Enabling Renewable Energy Integration and Facilitation of Regional
Import in Northern Region (IDA USD22 million): This sub-component will build one (1) new 400/230 kV substation
at Parbatipur to facilitate regional power interconnection with India in the future to transport power from/to
neighboring countries like Bhutan and Nepal through the Indian grid. This 400kV substation is planned to be a key
hub to facilitate grid connected RE integration to the rest of the grid from the Northern region power corridor.
Furthermore, since there is no 400kV substation in that part of the country, the introduction of Parbatipur 400kV
substation would help in improving the voltage profile in the Northern part allowing better quality of power flow
to and from Dhaka and other areas, where the loads are concentrated.
Sub-component 4: Grid Modernization and Digitization (IDA USD15 million): This component will have provisions
for the following activities that is expected to improve the efficiency of operations and maintenance practices of
the implementing agency. The proposed activities are:
i. Installation of Emergency Restoration System (ERS) for 400 kV voltage levels in selected project areas to
reduce downtime in restoring damaged towers due to natural disasters and improve grid resilience.
ii. Procurement of (a) Protection Coordination Software to improve operations of PGCB and (b) additional live
line maintenance tools which are critical equipment to restore line outages at minimal outage duration
without shutting down the entire circuits.
iii. Deployment of Geographical Information System (GIS) infrastructure to inculcate best practice to enhance
system planning and operational activities within PGCB. This is also intended to tie into an integrated planning
system across the generation, transmission and distribution sectors in Bangladesh.
15. In addition to these proposed works above, and subject to the satisfactory assessment by the implementing
agency, Component 1 could cover a broader scope aimed at decarbonizing the grid by addressing key constraints to
the optimal dispatch of the current grid connected VRE capacity (135 MW ≈ 0.14GW).
Component 2 (USD15 million) – Institutional support, capacity development and project implementation.
16. The World Bank plans to enhance its long-term engagement with PGCB through additional support and
technical assistance. Component 2 would therefore cover several aspects, some of which will be further discussed
during project preparation:
i. Provision for capacity development and training for PGCB officials in the areas of power system investment
planning, system analysis and operations as well as environment and social compliance.
ii. Reactive Power Management (RPM) study and implementation, which will be carried out in two phases. Phase
1 would cover the RPM study of Bangladesh grid and determine the optimal grid location of the Static Var
Compensators (SVC) and the implementation of the outcome of the studies would be covered in phase 2.
iii. Credit Rating assessment of PGCB and the development of a financial model for PGCB to understand their
investment needs and the cost of borrowing and of financing from different sources to help them decide on
the alternate market-based borrowing options.
iv. Integration of PGCB’s Maintenance Management Systems and Fixed Asset register works currently being
undertaken in an on-going project.
v. Support the implementing agency (PGCB) in project implementation through hiring of dedicated consultants
(implementation support, independent procurement, etc.)
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
Legal Operational Policies Triggered?
Projects on International Waterways OP 7.50 No
Projects in Disputed Areas OP 7.60 No
Summary of Screening of Environmental and Social Risks and Impacts
.
The total estimated land requirement for all eight (three 400kV and five 230kV) sub-stations is expected to be within 60
acres. The Project will try to use government land (if available) or vacant private land (fallow or one-crop lands are usually
used) may be acquired, which will cause loss of land for owners and may cause temporary impacts on owners, tenants
and/or sharecroppers due to loss of crops and trees. No physical displacement is expected.
Most of the expected impacts are likely to occur during the construction phases, mainly: generation of solid waste, air
pollution and noise, disruption of traffic, etc. The TL construction may also cause disturbance of ROW soils and vegetation
through the movement of people and vehicles along the ROW and access roads.
.
CONTACT POINT
World Bank
Mohammad Anis, Anthony Granville
Senior Energy Specialist
Borrower/Client/Recipient
People's Republic of Bangladesh
Implementing Agencies
Power Grid Company of Bangladesh
Golam Kibria
Managing Director
md@pgcb.gov.bd
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The World Bank
Transmission Grid Enhancement & Modernization Project (P179429)
FOR MORE INFORMATION CONTACT
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 473-1000
Web: http://www.worldbank.org/projects
APPROVAL
Task Team Leader(s): Mohammad Anis, Anthony Granville
Approved By
APPROVALTBL
Practice Manager/Manager:
Country Director: Dandan Chen 19-Nov-2022
Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when
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