June 26, 2007 (LPAC)--Bangladesh's interim Energy Minister Tapan Chowdhury told reporters in Dhaka on June 24 that the International Atomic Energy Agency (IAEA), the nuclear watchdog of the United Nations, has approved the government plan to set up a nuclear power plant.

Bangladesh faces massive electricity shortages that have hit its large textile industry, with generation of 3,000 megawatts at peak times while two-thirds of the households have no access to electricity. Last year, violence over power cuts in a northern Bangladesh town left at least 20 people dead in clashes between police and farmers who had demanded increased power supply for irrigation. The country's military-backed government, which took over in January after an emergency was imposed, has made tackling the power crisis one of its top priorities.

According to Bangladesh's Energy Minister, South Korea has made an offer to finance 60 percent of the project. Meanwhile, the Asian Development Bank (ADB), who still suffers from ideological problems in financing a nuclear power project openly, said on June 25 that the Government of Bangladesh will receive loans totaling $465 million from ADB to support the country's Sustainable Power Sector Development Program." The Program supports the governments goal of providing reliable electricity to the entire country by 2020, and will result into better and more affordable services to the public," said Pil-Bae Song, head of the project administration unit of ADB's South Asia Department.

The World Bank in July last year estimated that Bangladesh needed US $10 billion in investment for its electricity supply in the next decade.