WB nods addl $350m for BD LNG imports

The World Bank (WB) has approved an additional US$350 million in financing to help Bangladesh import liquefied natural gas (LNG) and strengthen the country's energy security amid global market volatility.
The fund is being provided as additional financing for the Energy Sector Security Enhancement Project in Bangladesh, which was launched last year with an initial $350 million allocation approved in June 2025.
Bangladesh depends heavily on imported LNG to meet its growing electricity demand, particularly for power generation and industrial production.
Disruptions in global energy markets caused by the conflict in the Middle East have increased price volatility and supply risks, putting pressure on the country's foreign exchange reserves and public finances.
A prolonged conflict in the region could significantly affect fuel and fertiliser supplies, with poorer households likely to suffer the most.
In a press release issued on Monday, the World Bank said the additional financing would help strengthen Bangladesh's energy security by facilitating cost-effective financing mechanisms for LNG imports amid global fuel market volatility.
The financing will expand support for LNG import payments by Petrobangla, the state-owned oil and gas company.
According to the WB, the additional funding will help Petrobangla secure LNG supplies under longer-term contracts, reduce reliance on costly spot market purchases, and ensure a more reliable and affordable electricity supply.
Reliable and affordable energy generation is expected to create jobs, support private sector growth and generate economy-wide benefits.
The additional financing includes an IDA payment guarantee-backed financing facility to support payment security for LNG imports through standby letters of credit and short-term credit lines.
These instruments are expected to help Bangladesh move towards more predictable and long-term LNG procurement arrangements while maintaining flexibility to respond to market disruptions.
The original $350 million Energy Security Enhancement Project for Bangladesh was approved by the World Bank's Board of Executive Directors on June 18, 2025, and is scheduled to continue until December 31, 2031.
Jean Pesme, World Bank division director for Bangladesh and Bhutan, said: "The conflict in the Middle East has pushed up LNG prices and disrupted supply. As a net fuel and gas importing country, Bangladesh faces significant fiscal pressure to maintain its energy security and keep its economy running."
"As part of our broader dialogue with the authorities on energy and the response to the impacts of the war, the World Bank is stepping up its support to help Bangladesh maintain a stable supply of LNG imports, which is critical for protecting the economy and people from costly energy disruptions."
Mr Pesme said the additional financing would support electricity generation, industrial activity and job creation by ensuring access to more reliable gas supplies. Olayinka Edebiri, World Bank senior energy specialist and task team leader of the project, said uninterrupted LNG supply was vital for Bangladesh's energy security.
"As gas is a cheaper and less emissions-intensive energy source compared to other fuels, uninterrupted LNG supply provides a foundation for energy security in Bangladesh."