USAID's Response: Energy

USAID aims to:

• Strengthen energy institutions, particularly the Bangladesh Energy Regulatory Commission, the Rural Electrification Board and the rural electric cooperatives known as the Palli Biddut Samities or PBSs;
• Help develop appropriate market structure and associated rules to ensure a competitive market for efficient market operations and increased consumer benefits
• Promote balanced public discussion on reform of Bangladesh's energy sector; and
• Improve the legal, regulatory, and investment environment to promote private investment and development of the energy sector.

Rural Electrification

USAID's most significant contribution to the energy sector in Bangladesh ($210 million to date) is in rural electrification. Working with the National Rural Electric Cooperative Association (NRECA), USAID pioneered the Rural Electrification Program. It now brings electricity to about 43 million people across rural Bangladesh. This program helped establish the Rural Electrification Board as a semi-autonomous agency under the Government of Bangladesh. With electricity, about 200,000 electric irrigation pumps can now provide low-cost irrigation to farmers during the dry season. As a result, farmers can increase their production to meet growing demand, at the same time providing more food for themselves and their families. Additional benefits of electricity have included higher literacy rates, more incomes and better family planning. In recent times the rural electric cooperatives (PBSs) capacity to deliver services have been impaired by the lack of generation capacity that limits ability to meet demand. 

USAID’s current efforts are geared towards vesting more “management” authority with the rural electric cooperatives to contract for their own energy sources to supplement the energy provided through the power grid. Additionally the cooperatives will be trained to provide advisory services to develop entrepreneurial activities in their service areas.

Renewable Energy

The Bangladeshi NGO, Grameen Shakti, provides solar power systems to households in remote rural areas, where there will be no electric connections in the near future. USAID has helped Grameen Shakti to train 30,000 users and technicians thus enabling them to install more than 180,000 solar household systems to date. The number of installed solar system is currently growing at about 8000 systems per month. To read more about USAID's solar energy activities, see Brief on Grameen Shakti. 

Independent Regulatory Commission

USAID works closely with other donors and the GOB towards making the Bangladesh Energy Regulatory Commission (BERC) a truly effective and an independent regulatory body for the energy sector.  It provides technical assistance to BERC to adopt and implement regulations that will bring about transparency, accountability and predictability in sector operation.  More importantly it will help establish a transparent energy regulatory climate that will protect the interest of consumers and investors, provide incentives for energy sector utilities to improve the efficiency of operations and the quality of service. , The aim is to attract public and private sector investment capital and eventually pave the way for a market-based operation of the energy sector.

South Asia Regional Initiative on Energy (SARI/Energy)

Complementing these activities is USAID's South Asia Regional Initiative for Energy (SARI/Energy) program. The program promotes energy security in South Asia by facilitating more efficient regional energy resource utilization, increasing transparent and profitable energy practices, mitigating the environmental impacts of energy production, and increasing regional access to clean energy. SARI/Energy focuses on:

1. Cross border energy trade
2. Energy market formation
3. Regional clean energy development

Program Successes