The Asian Development Bank (ADB) and Islamic Development Bank (IDB) will help fund the development of new power projects in Bangladesh by June 2017.

ADB will provide $300m for the construction of a new natural gas-fuelled power station, which will replace the ageing units at Bangladesh’s second-largest plant in Ashuganj, reports Bloomberg.

IDB will grant $200m and the Bangladesh Government will contribute $81m for the construction of a 5MW solar photovoltaic plant, a hybrid renewable-energy project on Hatiya island.

The loan granted by ADB has a term of 25 years, a grace period of five years and an interest rate determined by the bank’s Libor-based lending facility.