World Bank helps Bangladesh improve energy security

“Enhancing energy security and air quality are critical economic and development priorities for Bangladesh,” said Gayle Martin, World Bank Interim Country Director for Bangladesh. “By addressing the root causes of gas supply constraints and urban air pollution, these two projects will help Bangladesh boost economic growth, improve productivity, and create jobs.”

The Energy Sector Security Enhancement Project (US$350 million) will help improve gas supply security by facilitating access to cost-effective financing for Petrobangla, the state-owned oil and gas company. The project will utilise an IDA guarantee to mobilise up to US$2.1 billion in private capital over seven years for new LNG imports. The backing of an IDA guarantee will improve Petrobangla’s creditworthiness to secure LNG supplies.

Imported LNG accounts for over 25% of total gas consumption in Bangladesh. About 42% of total gas consumption is in the power sector. Hence, gas supply shortages disrupt electricity generation, negatively impacting the economy. This project will provide payment security and working capital solutions to facilitate LNG imports under long-term contract and thereby reduce dependency on expensive spot market gas imports.

“The project will help Bangladesh enhance gas supply security in a cost-efficient manner, contributing to reliable and affordable electricity for industries and domestic users,” added Olayinka Bisiriyu Edebiri, World Bank Senior Energy Specialist and Task Team Leader for the program. “By ensuring reliable gas supply, the project will help boost economic growth and resilience.”

The Bangladesh Clean Air Project (US$290 million) will take a comprehensive approach to tackle air pollution. In Bangladesh, air pollution caused over 159 000 premature deaths and 2.5 billion days of illness, with estimated health costs equivalent to 8.3% of the gross domestic product (GDP) in 2019. Dhaka remains one of the most polluted cities in the world with annual levels of fine particulate matter (PM2.5) exceeding by 18 times the WHO Air Quality Guidelines.

The project will help focus on air quality management by strengthening Department of Environment’s air quality monitoring network with new and improved stations. It will help operationalise the Continuous Emissions Monitoring Program for real-time monitoring of major industrial sources of air pollution. Based on an integrated network of automated monitoring systems, the monitoring program will allow enforcement of emissions limits, and disclosure of preliminary data collected at major sources.

The project aims to improve vehicle emissions control and introduce a fleet of 400 zero-emission electric bus services by replacing ageing, polluting diesel buses.

“This will be the first in a new series of projects to improve the country’s air quality,” concluded Ana Luisa Gomes Lima, World Bank Lead Environment Specialist and Task Team Leader for the project. “As air travels across borders, no single country can contain air pollution on its own. The project will facilitate regional dialogue and data sharing for reducing air pollution.”

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