Energy Department signs $2.1 bn loan deal with ITFC

Bangladesh government is set to take a loan of 2.1 billion dollars to solve the dollar crisis in energy import.

The Energy Department signed an agreement with the Islamic Trade Finance Corporation (ITFC) at its building on Wednesday.

ITFC's Chief Executive Officer (CEO) M Nazim Nurdali and Secretary of Energy and Mineral Resources Department Nurul Alam signed the agreement on behalf of their respective sides.

Officials of the Energy Department think the agreement will bring an apparent end to the dollar crisis in fuel imports.

Bangladesh Petroleum Corporation (BPC) and Oil Gas Mineral Resources Corporation (Petrobangla) have been suffering from dollar crisis in energy imports since last year. Bangladesh Bank was providing one billion dollars to these two institutions for importing energy every month on the instructions of the Prime Minister.

In a press conference held immediately after the signing of the agreement, State Minister of the Ministry of Power, Energy, and Mineral Resources Nasrul Hamid said, "This is a milestone for Bangladesh."

"We have been taking cooperation from IDB Jeddah for a long time. So far their aid was used only to buy oil. This time $500 million will be used for LNG, and the rest will be used to buy oil. With this agreement, the crisis in the energy sector will be removed to a large extent," he added.

The state minister said that out of 2.1 billion dollars, Bangladesh Bank will give 1.6 billion and IDB Jeddah will give the remaining amount of 500 million.

Every year Bangladesh Bank gives IDB one and a half billion dollars as annual contribution. Now this subscription money does not have to be sent to IDB. Bangladesh Bank will give this amount as a loan to the Energy Department.

It was also informed in the press conference that the agreement was signed to finance the import of fuel oil through Bangladesh Petroleum Corporation (BPC) and liquefied natural gas (LNG) from Bangladesh Oil, Gas and Mineral Resources Corporation (Petrobangla).