WB to provide Bangladesh with additional $350 million for energy security

Amidst the turmoil in the international energy market, the World Bank (WB) has announced a large loan to support Bangladesh's liquefied natural gas (LNG) import process. The organization has approved an additional $350 million in financing for the security of the country's energy sector.

The decision to release this money under the 'Energy Sector Security Enhancement Project' was taken at the World Bank's board meeting last Friday.

The organization said that due to the ongoing conflict in the Middle East, the global energy supply chain is at risk, and prices are also fluctuating. As a 100% import-dependent country, this has had a direct negative impact on Bangladesh's state finances and foreign exchange reserves. If this conflict continues, the supply of fuel and fertilizer may be severely disrupted, which will ultimately cost the country's low-income people.

Currently, imported LNG has become the main driving force for power generation and industrial production in Bangladesh. By using this new international fund, state-owned company Petrobangla will be able to procure LNG under long-term contracts, reducing its dependence on the high prices of the spot market or open market. As a result, on the one hand, it will be easier for the government to settle its LNG purchase arrears, and on the other hand, it will be possible to keep the country's power supply system more affordable and stable.

The entire financing process is arranged based on the IDA Payment Guarantee-backed framework. Through this, importers will get standby letters of credit (LC) and short-term loan facilities, which will provide overall security of payment when purchasing LNG from the international market.

Jean Pesme, Divisional Director for Bangladesh and Bhutan at the World Bank, said, "The conflict in the Middle East has increased the price of LNG and disrupted supply. This is creating a major financial pressure for Bangladesh, as an energy import-dependent country. This support will help Bangladesh ensure a stable LNG supply, which is critical for power generation, industrial activities and employment.

Olayinka Edebiri, the project’s task team leader and World Bank Senior Energy Specialist, said, “Gas is a relatively less polluting and affordable fuel compared to other fuels. Uninterrupted LNG supply will strengthen Bangladesh’s energy security base and also save money by reducing the use of expensive liquid fuels.

The initial approval of the $350 million main project to strengthen the country’s energy infrastructure was given on June 18, 2025. This new additional financing further enhances the effectiveness and scope of the ongoing project, which will contribute to the security of the domestic energy sector until December 31, 2031.