Long 17 years' wait for an energy-boosting facility ends with the endorse of a project for building a second unit of the Eastern Refinery planned for augmenting Bangladesh's crude-oil-refining capacity.
The Executive Committee of the National Economic Council (ECNEC) approved the "Modernisation and Expansion of Eastern Refinery Limited (ERL-2)" project at its meeting held Tuesday with Chief Adviser of the interim government Prof Muhammad Yunus presiding.
As estimated, the country's second oil refinery holds the crude-refining capacity of 3.0 million tonnes per year-doubling the long-stymied ability.
Currently, Bangladesh's only refinery-established way back in 1968-processes just 1.5 million tonnes of crude annually, meeting only 20 per cent of the national demand. The remaining 80 per cent is imported as costly finished fuel products.
Once ERL-2 is operational, the combined capacity will rise to 4.5 million tonnes, meeting nearly half of the country's projected demand by 2030.
This shift from importing refined oils to processing crude oil domestically is expected to save the government billions in foreign-exchange reserves.
The ECNEC on the day endorsed a total of 22 development projects, including the ERL-2, involving a combined cost of Tk 464.19 billion.
According to the ERL, the new unit is designed with high flexibility to reduce dependence on Middle-Eastern crude. It will be capable of processing Russian Urals crude, Nigeria's Brass River crude, Crude from Europe and Africa.
Furthermore, the project will integrate artificial intelligence (AI) and large language model (LLM) technology to automate billing and operational systems, aiming to reduce "human error and increase efficiency".
The plan for ERL-2 was first conceived in 2010. Over the years, the project had faced numerous hurdles.
In 2013, the ERL undertook the project at Tk 130 billion which was stalled for funding issues. Then in 2022, the project costs rose to Tk 230 billion under a self-financing plan that never started.
In 2024, a controversial proposal by the now-embroiled S Alam Group was scrapped after the fall of the ousted Sheikh Hasina government.
In 2025, the ERL during this interim government has undertaken the project estimating the cost at Tk 429.74 billion.
After a strict scrutiny by the Planning Commission, the cost has finally been trimmed down to Tk 354.65 billion after removing unnecessary components.
"By opting for domestic financing after foreign lenders failed to commit, the government aims to fast-track the project and avoid further cost escalations," says an Energy Division official.
Planning Commission officials say the ECNEC approved a total of 22 development projects with a total estimated cost of Tk 464.19 billion, with the majority of the funding to come from government coffers.
Of the total project cost, Tk 304.82 billion will be financed from the internal exchequer, Tk 16.89 billion from project assistance and Tk 142.47 billion from the relevant organisation's own funds.
Among the approved projects, 14 are new, five are revised and three involve extensions of project tenures.
Under the Road Transport and Bridges Ministry, three projects were approved, including the development of a connecting road from the Karnaphuli Tunnel (Anwara) to the Chattogram-Cox's Bazar National Highway up to Gachhbari at Tk 4.63 billion, upgrading the Hili (land port)-Dugdugi-Ghoraghat National Highway (N-521) in Dinajpur along with reconstruction of narrow and dilapidated culverts and construction of rigid pavement and drains in market areas (1st revised) at Tk 5.87 billion, and land acquisition and utility relocation support for the 4-lane Dhaka (Kanchpur)-Sylhet-Tamabil highway with separate service lanes on both sides (1st revised) at Tk 79.75 billion.
Also endorsed is construction of 672 residential flats in eight 15-storey buildings for government officers and employees at Aliganj in Narayanganj (2nd revised) project of the Housing and Public Works Ministry at Tk 4.04 billion.
It endorsed establishment of the Dhaka WASA Training and Research Academy at Tk 7.21 billion, Water logging mitigation, safe water supply and infrastructure development in Sylhet City Corporation at Tk 17.66 billion, Climate Resilient and Livelihood Enhancement Project (CRALEP) at Tk 12.68 billion, development of important rural infrastructure in Patuakhali district at Tk 4.0 billion, and widening and strengthening of key upazila and union roads in the Sylhet division at Tk 19.52 billion under the Local Government, Rural Development and Cooperatives Ministry including.
The Defence Ministry secured approval for two projects-revised infrastructure development of Mongla Commander Flotilla West and infrastructural development of the Army Institute of Physiotherapy and Rehabilitation in Savar at Tk 13.16 billion.
In the social sector, the committee approved the revised reconstruction project of the Destitute Children Training and Rehabilitation Centre at Konabari in Gazipur under the Social Welfare Ministry at Tk 922.28 million, and the Education and Research Capacity Building project of the National Institute of Advanced Nursing Education and Research (NIANER) under the Medical Education and Family Welfare Ministry at Tk 854.4 million cost.
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