ADB to help finance India-Bangladesh power link

DHAKA (Reuters) - The Asian Development Bank (ADB) is to help finance a project to increase transmission capacity of an India-Bangladesh power link to allow Bangladesh to better meet sharply rising power demand.

ADB's $120 million loan to Bangladesh will double the capacity of the existing interconnector which links the power grid of western Bangladesh at Bheramara and the grid of eastern India at Bharampur.

The two networks were first interconnected in 2013, under a previous project financed by ADB. New transmission capacity will rise from 500 megawatts (MW) to 1,000 MW, ADB said.

"There are power surpluses and shortfalls across the region and this project assistance will help these two countries move forward to better utilise their energy generation capacities and to support the broader goal of South Asian regional energy cooperation," said Anthony Jude, director, energy division, in ADB's South Asia Department.

Bangladesh's fast-growing economy has soaring energy needs and domestic natural gas supplies cannot keep up with demand, resulting in an increasing dependence on oil and diesel-based plants.

To meet its goal of providing electricity for all by 2021, the government is working to increase generating capacity and to source additional supply.

The initial linking of the two national grids helped India deliver over 2,000 gigawatt hours of electricity across the border in 2014.

Along with ADB's loan assistance, the government of Bangladesh will provide financing of $63.2 million. The project is expected to be completed in June 2018.

(Reporting by Serajul Quadir; editing by Adrian Croft)