The World Bank (WB) is all set to provide Bangladesh US$350 million interest free credit for a 300 MW power project in the country, a press release of WB said on Thursday.

According a press release of the Washington-based bank issued here, the fund will support Bangladesh's Siddhirganj Peaking Power Project (SPPP), located some 20 km southeast of capital Dhaka, which is also the country's first integrated gas-to-power project.

"The credit is now declared effective meaning that the Government of Bangladesh can draw down the US$350 million credits for implementation costs," the press release said.

The multilateral development bank in October 2008 approved the US$350 million interest free credit for SPPP, which will be built at a total cost of US$470 million.

According to the press release, the SPPP would add 300 MW electricity to Bangladesh's national power grid when completed in 2011. It said the project includes a 60 km gas pipeline, a 300 MW gas turbine power plant and an 11 km, 230 kv power transmission line.

The World Bank said that the Siddhirganj project will make an important contribution in reducing power shortages in the country.

Electricity generation across the South Asian country is currently hovering around 3,500 MW against the demand for over 5,000 MW.