Last Updated on May 19, 2026 1:01 pm by BIZNAMA NEWS
Zakir Hossain from Dhaka
The World Bank has approved $350 million in additional financing for Bangladesh to support liquefied natural gas (LNG) imports and strengthen energy security amid global market volatility.
The funding, cleared on May 15 under the Energy Sector Security Enhancement Project, aims to help Bangladesh manage rising fuel price volatility linked to the ongoing conflict in the Middle East, according to a World Bank statement issued Monday.
Bangladesh relies heavily on imported LNG for electricity generation and industrial use. The lender warned that prolonged conflict could disrupt fuel and fertiliser supplies, with poorer households likely to be hardest hit.
The financing will support cost-effective LNG import mechanisms and assist payments by state-owned Petrobangla, enabling it to secure supplies through longer-term contracts and reduce reliance on costly spot market purchases.
The package includes an International Development Association-backed facility using standby letters of credit and short-term credit lines to ensure payment security. “These instruments are expected to help Bangladesh shift toward more predictable, longer-term LNG procurement arrangements while maintaining flexibility to respond to market disruptions,” the statement said. The original $350 million project was approved on June 18, 2025, and runs till December 31, 2031.
Jean Pesme, World Bank division director for Bangladesh and Bhutan, said the Middle East conflict has driven up LNG prices and disrupted supplies, putting pressure on Bangladesh’s finances. As the country depends heavily on imported fuel, it faces “considerable fiscal strain” in maintaining energy security and economic activity, he said.
He added that the World Bank is increasing support to ensure steady LNG imports, which is essential “to avoid costly energy shortages and to safeguard the economy and livelihoods,” noting reliable gas supplies would sustain electricity generation, industrial production and employment.
Olayinka Edebiri, World Bank senior energy expert, said gas, being relatively cheaper and less carbon-intensive, makes consistent LNG supply a key pillar of Bangladesh’s energy security, while also offering fiscal benefits by reducing reliance on expensive liquid fuel imports.