Ambassador’s Speech - Signing ceremony between Agence Française de Développement (AFD) and the Government of Bangladesh - 30th October 2019
Speech by H. E. Mr. Jean-Marin SCHUH, Ambassador of France to Bangladesh
Respected ERD Secretary Mr. Monowar Ahmad,
Chief of Europe Wing and Additional Secretary Dr Gauranga Chandra Mohanta,
Joint Secretary Mr. Ali Hossain,
distinguished ERD officials and,
DPDC Project Director.
A very good morning to you all and thank you very much for welcoming us at ERD.
It is a great pleasure to be here for the signing of the Credit Facility Agreement related to the additional financing of the Power Supply Expansion and Efficiency Improvement Investment Program implemented by Dhaka Power Distribution Company (DPDC).
I’m quite aware of Bangladesh’s ambition to become a middle income country by 2021. Growth is tremendous, average GDP growth for the past 5 years has reached more than 7%. Still, the country is facing a few challenges such as infrastructures development, climate change mitigation, promoting innovation for digital Bangladesh, human capital development, governance which have become the main priorities of the Government of Bangladesh.
France, through AFD, is committed to support Bangladesh in achieving its development goals. AFD is new in the donors’ landscape of Bangladesh since it started its journey in Bangladesh in 2013 with a mandate to promote green and inclusive growth. AFD funded projects are 100% Paris Agreement compliant and generate at least 60% climate co-benefice. Despite this quite recent common history, AFD and Government of Bangladesh have now developed a very constructive collaboration, which needs to be pursued and expanded.
As of now, AFD has committed 610 MEUR to finance 12 projects. Even though AFD is investing primarily in urban infrastructures, the projects funded by AFD are quite diverse, ranging from urban transports, water supply, energy efficiency, river protection, and support to the RMG industry to improve security and environmental standards.
Today, we are signing a 30 MEUR loan agreement which is an extension of the initial 100 MEUR financing provided to DPDC to construct and modernize 14 electrical substations and the associated power lines for distribution network. It is a parallel co-financing with Asian Development Bank under the Power Efficiency Programme. This additional financing will cover extra costs related to the purchase and commissioning of new equipment and the increased cost of raw materials.
The project as a whole will improve the quality of energy distribution for 241,000 households or 1.1 million people. Access to good-quality electrical energy will have a major positive impact on living conditions, education and health. The upgrading of the electrical network will allow DPDC to provide energy with a lower emission factor and will reduce the carbon footprint of the diesel generators.
We understand that the successful migration of Bangladesh’s energy mix towards a low carbon trajectory is a multi-step process. The strengthening of a smart electrical distribution network must act as a foundation for this transformation.
We expect that the ongoing project along with the additional financing will be completed by June 2020. It would be then the first AFD funded completed project in Bangladesh. Its inauguration will be an excellent opportunity to celebrate the ongoing collaboration between France and Bangladesh.
As you are all probably aware, a third phase of DPDC’s power factor improvement program including a 100 MEUR loan combined with a 12 MEUR grant is under negotiation between AFD and Government of Bangladesh and will hopefully materialize in 2020.
As a concluding remark, I would like to emphasize the commitment of the French Government, through AFD, to continue promoting climate resilient development of Bangladesh over the years to come, with an improved access to soft financing, technical expertise, and cooperation with French partners. This ambitious agenda should be facilitated by the signing of the Host Country Agreement for AFD group.
Thank you once again.