Bangladesh Requested $350 Million World Bank Support

Bangladesh has formally sought an extra US$350 million loan guarantee from the World Bank to support its liquefied natural gas (LNG) imports amid rising global energy prices and escalating tensions in the Middle East. The request forms part of a strategic effort to strengthen the country’s energy security as domestic gas reserves continue to decline.

Petrobangla, the state-owned energy corporation, approached the Economic Relations Division (ERD) to accelerate fund disbursement for LNG procurement. “Initially, we intended to request $250 million, but the growing energy demand and international price volatility prompted us to seek $350 million,” stated AKM Mizanur Rahman, Petrobangla’s Director of Finance, in an interview with Financial Express.

The new request would bring Bangladesh’s total World Bank-backed energy programme guarantee to $700 million, combining the existing $350 million facility approved in June last year under the Energy Sector Security Enhancement Project. Funded through the International Development Association (IDA), the programme aims to improve access to affordable financing for LNG imports and mobilise private capital for energy security, with an estimated $2.1 billion expected to be leveraged over the next seven years.

Bangladesh has already procured five LNG cargoes from the spot market at high prices, reflecting the urgent need for additional financial support. The initial IDA-backed guarantee has facilitated smoother payments, allowing Petrobangla to maintain its import schedule and secure long-term supply agreements.

A consortium of eight local and international banks has been selected to operationalise the programme. The financial arrangements include:

The IDA guarantee will cover principal and accrued interest for loans and SBLC draws but will not cover penalties or default interest. Rahman emphasised that the guarantee will enhance Petrobangla’s credit profile, allowing it to negotiate LNG contracts more effectively amid foreign-exchange constraints.

Currently, LNG represents over 25% of Bangladesh’s total gas consumption, costing approximately $4.5 billion annually. The power sector alone consumes 42% of the country’s gas, meaning any disruption in LNG supply could severely affect electricity generation and broader economic activity.

Since 2018, Bangladesh has imported 35.59 million tonnes of LNG across 571 cargoes. With domestic reserves depleting, Petrobangla projects annual LNG requirements of 30 million tonnes by 2041, with daily gas demand potentially reaching 8 Bcf/d—more than triple the present supply of 2.45 Bcf/d.

This latest request underscores Bangladesh’s proactive approach to securing a stable energy supply amid global market uncertainties and rising domestic demand.