The power sector programme has two financing components, programme loans and project loans, says an ADB press release. This programme is in line with ADB's country and strategy programmes for Bangladesh.

Of the $465 million, project loans comprise $400million, programme loans $60milion and the rest special loans.

The project loans with a 25-year term including a five-year grace period will be sourced from ADB's ordinary capital resources, while the $5 million loan from its special funds resources will have a 32-year term including an eight-year grace period.

The $400 million project loans will be used for expanding clean fuel generation capacity, enhancing transmission network reliability and efficiency and improving the quality of supply in the capital Dhaka and its surrounding areas, which make up the majority of the country's power demand.

The $5 million loan is meant for capacity development of the power sector to improve utility performance and promote sustainable operations.

"The project loan is expected to reduce system losses and improve quality of supply, leading to more efficient use of energy and making more power available to support sustained economic growth, while offsetting growth in greenhouse gas emissions," Pil-Bae Song, head of the project administration unit of ADB's South Asia Department, said.

He also said that some 820,000 existing consumers in Dhaka will be directly benefited by this reliable power supply. It will also help manufacturing and service industries including the garment sector that employs several million poor people, he added.

The programme loans of $60 million will be released in two stages. The loan carries a 24-year term including an eight-year grace period and will come from ADB's special funds resources.

The loan will also help reform the power sector through financial and organisational restructuring, improved governance and promotion of private sector partnerships, the press release said.

"At about 158 kilowatt-hours annually, per capita generation is among the lowest in the world," Song said. "The current dependable power generating capacity of Bangladesh is about 4,120 megawatts, while the country's peak demand is about 4,700 megawatts," the ADB official added.

Song said, "The programme supports the government's goal of providing reliable electricity to the entire country by 2020, and will result into better and more affordable services to the public."

"Only one third of the households have access to electricity and those who have, receive poor and unreliable service due to insufficient power generation capacity, poor transmission and distribution systems," he added.