DHAKA, BANGLADESH (5 July 2018) — Bangladesh is to receive a $20 million loan from an Asian Development Bank (ADB) Power System Efficiency Improvement Project together with an additional $25.44 million in grant financing to spur off-grid solar photovoltaic (SPV) pumping for agricultural irrigation.
The grant financing comprises $22.44 million from the Scaling up Renewable Energy in Low Income Countries Program under the Strategic Climate Fund, and $3 million is 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 ADB Senior Energy Specialist Mr. Aiming Zhou. “In an area where grid electricity is not available, using solar energy for irrigation is a promising alternative to diesel-based pumping systems. The project will help meet diverse energy demands, improve livelihoods because of less pollution, and result in savings from the reduction in diesel use for irrigation and other agricultural activities.”
Irrigation consumes about 4.58% of the total electricity generation in the country. Farmers with electric pumps, however, continuously struggle with persistent power outages. This forces them to operate their pumps at night when grid electricity demand is lower and power outages are less likely. In off-grid rural areas, reliance on expensive diesel for pumping is the only option. An estimated 11.06 million farmers are using diesel to operate their pumps for irrigation that consume 1 million tons of diesel per year.
Solar powered irrigation can replace diesel systems to enhance energy security, reduce local pollution, and mitigate climate change. However, the financing and operating model are still at early stages and not yet financially and operationally viable. The grant will be used to lower the high upfront cost of using SPV pumping systems for agricultural irrigation, making them more affordable to low-income farmers.
The funding will support installation of at least 2,000 SPV pumping systems in areas without electricity access with an estimated 19.3 megawatts-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. Technical and skills training will be provided to support job and livelihood opportunities with a focus on women.
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.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.