Dhaka, March 2 (IANS): The World Bank has approved $185 million credit to add 310 Megawatt (MW) renewable energy generation capacity in Bangladesh and mobilise private sector participation to meet the growing demand for electricity in the country.

The scaling up of renewable energy project will increase installed capacity of renewables through piloting and expanding investments in key market segments, the Washington-based lender said in a statement, here on Saturday.

The credit facility will be used to build the first 50 MW phase of a large scale solar panel energy park in the Feni district. It will be implemented by the Electricity Generation Company of Bangladesh, according to the statement cited by Xinhua news agency.

The project will help in better access to cleaner electricity and air by avoiding burning of fossil fuels. It will help cut emissions by 377,000 tons of carbon dioxide equivalent a year, it added.

The $185 million credit include $26.38 million loan and $2.87 million grant from the Strategic Climate Fund of the World Bank's Climate Investment Funds.

"Bangladesh is well on its way towards becoming an upper middle-income country with about 80 per cent of the population having access to grid electricity. It also has one of the most successful off-grid renewable energy programmes in the world, providing electricity to another 10 per cent of the population," said Dandan Chen, World Bank's Acting Country Director for Bangladesh and Bhutan.

The project will help mobilise around $212 million financing from the private sector, commercial banks and other sources and establish a dedicated renewable energy financing facility to provide credit to developers of rooftop solar photovoltaics (PV) and large-scale renewables.