"This project will support Bangladesh's efforts to raise levels of social development and economic growth by increasing access to electricity in rural areas, where 85% of the country's nearly 63m poor people live," the bank said in a statement.

The project will promote the use of solar energy in rural areas to improve the delivery of social services such as health and education.

It will also fund the upgrading of the rural electricity grids, to increase reach, capacity and reliability, as well as the construction of more small scale power plants.

Power shortage

In 1998, the government began a programme to build a series of small scale power stations to address the rural energy supply crisis.

The World Bank package offers a grant of $8.2m plus $190.98m in loans.

Over the last three years the Grameen Bank has financed more than 30 rural communities in Bangladesh for similar energy projects.

It offers interest-bearing loans to people in rural areas so they can buy products such as solar panels and phone equipment to encourage internet use.

In January, a regional conference discussed the establishment of hydro-electric power projects in Bhutan and Nepal, which could then export their surplus capacity to Bangladesh through a new network of power cables.