Bangladesh secures power loan

Only 20% of Bangladeshi population have access to electricity

The Asian Development Bank ( ADB) is to lend Bangladesh about $200m to improve electricity supply.

Only about 20% of the Bangladeshi population have access to electricity, and fewer still in the rural areas where most of the poor live.

The West Zone Power System Development Project - in one of the most underdeveloped parts of the country - aims to stimulate economic growth and encourage private sector involvement in the electricity market.

The $400.2m project is due to be completed in 2006 - with $30m from Germany's Kreditanstalt fur Wiederaufbau and $10m from the Nordic Development Fund.

Reducing poverty

The money will finance transmission systems to distribute electricity from power generation plants.

The Western part of the country is the most under developed, KfW's regional director Uwe Ols told the BBC's World Business Report.

"To extend the electricity [grid] is one attempt to bring more modernisation and more development to the people over there and work on poverty reduction... electricity is a major source in the towns...so that employment can be created," he added.

ADB senior project engineer Seethapathy Chander added: "It will bring power to 500,000 new customers, a significant portion of whom live in the rural areas."