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          With strong support from other donors the long-standing rural electrification programme in Bangladesh is expanding rapidly. But challenges lie ahead.
In the 1970s, with less than 3.0 per cent of the population having access to electricity, the government of Bangladesh (GOB) decided to accelerate the provision of electricity to rural populations to stimulate economic and social development. In 1976, United States Agency for International Development (USAID) funded a comprehensive study on rural electrification, carried out by the National Rural Electric Cooperative Association (NRECA) and the Commonwealth Associates of the US, confirming the feasibility of rural electrification. As a result, the GOB decided to select the option of following the US cooperative model that successfully electrified rural America. The overall programme would be directed by a central agency that would monitor the activities of the cooperatives -- known as Palli Bidyut Samities (PBSs) -- while the cooperative model would ensure direct participation by the beneficiaries.
In the early phases, the USAID was the sole donor in this project, providing commodity support to construct the distribution system for the original thirteen cooperatives. Funds were also provided for technical assistance through NRECA. Due to the extent of this initial involvement, the USAID is commonly referred to as the "pioneer" of rural electrification in Bangladesh, having donated a total of over $210 million since the beginning of the programme.
The Bangladesh rural electrification programme has become globally recognised and widely admired. Furthermore, the success of the USAID effort and the active, long-standing in country presence of NRECA have served to encourage other donors to focus on the rural electrification (RE) effort in Bangladesh. In effect, the USAID has served as an assistance ''multiplier". It should also be recognised that bilateral donors, including the US, indirectly provide substantial amounts of assistance through the World Bank (WB) and the Asian Development Bank (ADB).
Expansion of rural power continues to accelerate while system performance remains at a high level. To date, 15 donors have provided $1.2 billion in assistance. There are now 67 PBSs in operation with 5.6 million rural connections serving over 35 million people. The number of new rural electricity connections grows by about 2,000 each day, compared to 1,400 three years ago.
In addition to operational success, the rural electrification programme has generated substantial socio-economic benefits to poor people in remote areas.
A recent study by a prominent Bangladeshi economist states that access to rural electricity has significantly impacted agricultural and business development, reduced poverty and improved the quality of life for rural folk.
Most Bangladeshis view their rural electrification effort as one of the most significant development initiatives to date. The programme's success is due to a number of key elements, in particular the democratic participation of member-consumers and their ownership and of the PBSs. A critical factor also has been the adoption of sound policies and procedures which monitor activities to ensure high performance levels, limit the staff size of the Rural Electrification Board (REB) and PBSs, and curb potential corruption -- all the while maintaining support to all functional areas.
These successes are now posing new demands within the programme and continue to shape the overall approach to rural electrification. While the USAID initially supported both infrastructure construction and technical assistance, the focus has shifted to improving management and organisational aspects of rural electrification. With the dramatic growth and sheer size of the programme, these challenges have become more complex.
Management procedures, which were innovative when first designed, have not changed significantly in over 25 years and only about 25 per cent of cooperatives have a positive financial margin. The Bangladesh power sector as a whole is now undergoing sector reform, including oversight by an independent energy regulatory commission.
This new framework requires new approaches with a greater need for technically-qualified professional managers who possess strong leadership qualities and the capacity to function independently.
To address such challenges, the GOB, with support from other donors, has accepted the USAID's offer to have the NRECA conduct a study to review current key elements of the programme. Based on the findings, a series of strategies and options will be developed for Bangladesh policy-makers to consider in order to enhance the operational performance and long-term sustainability of rural electrification. This review will be completed by the end of 2004.
The rural electrification programme is succeeding largely due to the efforts of Bangladeshis. This study is another sign of the unique and constantly evolving relationship between Bangladesh, the United States, and the NRECA in rural electrification over the past 30 years. Through collaboration between the REB/PBSs, the USAID, the NRECA and other donors, the United States is pleased to have contributed to this rural electrification effort which has provided significant benefits to the rural people of Bangladesh. (Source: News Release by the Public Affairs Section of the US Embassy in Dhaka)