The Asian infrastructure investment bank (aiib) announced Thursday that it has approved a us $200 million loan for power grid expansion projects in Bangladesh's capital dhaka and the country's western region.

The Asian infrastructure investment bank (aiib) said in a statement on its website that 22 percent of Bangladesh's population still lacks access to electricity due to the country's rapidly industrializing and urbanizing electricity demand. It is estimated that the lack of electricity supply causes an annual loss of 2 to 3 per cent of Bangladesh's gross domestic product.

By 2025, the completion of the grid expansion project in dhaka and the western region is expected to reduce the number of annual power outages from 60 to 15, reduce transmission losses from 2.76 percent to 2.50 percent, and increase transmission capacity by 7,440 megavolt-amps, the statement said.

Co-financed by the Asian development bank, the project will help Bangladesh meet its goal of providing uninterrupted electricity to the industrial sector by 2020 and electricity access to everyone in the country by 2021, the aiib said.

"The aiib provides much-needed capital to regions with weak infrastructure to help provide affordable and reliable modern energy," said pan dian, aiib vice-president and chief investment officer.

Bangladesh is now the fastest growing economy in South Asia, growing at an average annual rate of more than 7.5 percent over the past three years, it said.