Bangladesh has formally requested an additional US$350 million loan guarantee from the World Bank to bolster its liquefied natural gas (LNG) imports amid rising tensions in the Middle East and surging global fuel prices.
Petrobangla, the state-owned energy corporation, has approached the Economic Relations Division (ERD) to expedite the disbursement of funds for LNG procurement from international suppliers. “Initially, we planned to request an additional $250 million, but given the growing energy demand, we opted for a higher amount,” said AKM Mizanur Rahman, Petrobangla’s Director of Finance, in an interview with Financial Express on Tuesday.
The additional request would increase Bangladesh’s total World Bank-supported energy programme guarantee to $700 million, combining the existing $350 million facility approved in June last year under the Energy Sector Security Enhancement Project. This initiative, funded through the International Development Association (IDA)—the World Bank’s concessional lending arm—aims to improve the country’s energy-security framework and ensure stable LNG supply amid volatile global markets.
Rahman explained that Bangladesh has already purchased five LNG cargoes at record-high spot market prices. The existing $350 million IDA-backed guarantee, approved last year, has facilitated smoother payments for these imports. The project seeks to mobilise up to $2.1 billion in private capital over seven years to secure LNG imports efficiently.
To implement the programme, Petrobangla has partnered with eight domestic and international commercial banks. The consortium offers:
| Facility Type | Amount (US$ Million) | Tenure / Validity | Purpose |
|---|---|---|---|
| Stand-by Letter of Credit (SBLC) for long-term suppliers | 200 | 12 months | Support SPAs (Sales & Purchase Agreements) |
| SBLC for spot market suppliers | 50 | 90 days | Support MSPAs (Master Sales & Purchase Agreements) |
| Short-term credit line | 100 | Up to 12 months | Meet payment obligations for specific LNG cargoes |
The IDA guarantee will cover Petrobangla’s repayment obligations to the banks for loans and SBLC draws, up to $350 million in principal and accrued interest. However, penalties, default interest, or similar charges are excluded.
The World Bank notes that LNG now accounts for over 25% of Bangladesh’s gas consumption, with imports costing roughly $4.5 billion annually. Approximately 42% of the country’s gas is used by the power sector, making any disruption in LNG supply a significant threat to electricity generation and economic stability.
Since 2018, Bangladesh has imported 35.59 million tonnes of LNG across 571 cargoes. With domestic gas reserves depleting, Petrobangla projects a requirement of 30 million tonnes of LNG per year by 2041, as daily gas demand could rise to 8 Bcf/d—over three times the current supply of 2.45 Bcf/d.
This strategic financial move reflects Bangladesh’s commitment to strengthening its energy security amid a rapidly evolving global energy landscape.