$200 Million ADB Loan to Promote Efficiency and Energy Transition in Bangladesh

MANILA — The Asian Development Bank (ADB) has approved a $200 million loan to help Bangladesh enhance energy efficiency through smart metering as well as support its transition to clean energy solutions.

Bangladesh’s energy supply is highly dependent on natural gas. The gas distribution network suffers from significant losses due to old, dilapidated infrastructure and inefficient gas usage by unmetered residential customers, who currently pay a flat-rate tariff irrespective of consumption.

The project will support the government’s efforts to reduce losses by installing 650,000 smart prepaid gas meters (SPGMs) for residential customers, primarily in South Dhaka and Narayanganj. Installing SPGMs is one of the climate mitigation measures specified in Bangladesh’s nationally determined contributions under the Paris Agreement. The project is expected to reduce around 400,000 tons of carbon dioxide emissions annually.

“Smart meters reduce energy losses by encouraging a change in customers’ consumption behavior. The country’s economy is increasingly vulnerable to the price escalation of imported energy supply, affecting its energy security and industrial production. Reducing wastage and improving efficiency of domestic gas use in the residential sector is a priority of the government to mitigate the impacts on economic growth and climate change,” said ADB Senior Energy Specialist Atsumasa Sakai. “Combined with the improved safety awareness program among customers and the promotion of safety standards for gas cooking appliances, the project also aims to reduce gas-related accidents and ensure safe energy access, especially for socially disadvantaged groups, such as women and residential users living in lower-income communities.”

The project increases the operational efficiency of the state-owned Titas Gas Transmission and Distribution Company Limited—the country’s largest gas distribution company—through transformational and modernized approaches. This includes the promotion of the use of advanced digital technologies, such as smart meters connected with the unified metering data management system and an automated web-based grievance management system.

Through an accompanying technical assistance of $1.75 million, ADB will support the government in their low-carbon energy transition and methane leakage loss reduction plan for the gas distribution subsector. This includes preparing pre-feasibility studies on innovative clean energy solutions and assessing the viability of accessing private capital for future project financing, including the use of carbon credits. The assistance will be financed by a $1 million grant from the Technical Assistance Special Fund and $750,000 from the Republic of Korea e-Asia and Knowledge Partnership Fund, administered by ADB.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.