The World Bank approved USD 350 million in additional financing on Friday to help Bangladesh secure liquefied natural gas (LNG) imports. State-owned Petrobangla will utilise the funds to manage mounting external payment obligations.

The fresh capital injection is an extension of the Energy Sector Security Enhancement Project, which originally secured a USD 350 million approval on 18 June 2025. Scheduled to operate until 31 December 2031, the initiative introduces an International Development Association (IDA) payment guarantee structure. This financial framework will deploy standby letters of credit alongside short-term loan facilities to underwrite future fuel import transactions.

Bangladesh is experiencing significant pressure on its foreign exchange reserves due to global price volatility triggered by ongoing Middle Eastern conflicts. By directing these funds toward long-term procurement contracts, authorities aim to reduce reliance on the unpredictable spot market. The transition is expected to guarantee stable energy supplies for domestic electricity generation, industrial manufacturing, and agricultural fertiliser production.

Jean Pesme, World Bank Divisional Director for Bangladesh and Bhutan, identified regional geopolitical tensions as the primary catalyst for current supply chain disruptions and elevated costs. “This support will help Bangladesh ensure stable LNG supply, which is important for power generation, industrial activities and employment,” Pesme stated.

Expanding on the operational advantages, Olayinka Edebiri, Task Team Leader and World Bank Senior Energy Specialist, highlighted that natural gas remains a cleaner and more affordable option compared to heavy fuel oils. Consistent LNG deliveries will fortify the national energy infrastructure and deliver immediate financial relief by phasing out expensive liquid alternatives, Edebiri noted.