Dhaka: The World Bank’s Board of Executive Directors has approved two significant projects totaling $640 million aimed at enhancing Bangladesh’s energy security and improving air quality. “Enhancing energy security and air quality are critical economic and development priorities for Bangladesh,” stated 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,” Martin added.
According to Bangladesh Sangbad Sangstha, the Energy Sector Security Enhancement Project, valued at $350 million, is designed to improve gas supply security by providing cost-effective financing options for Petrobangla, Bangladesh’s state-owned oil and gas company. The project will leverage an IDA guarantee to attract up to $2.1 billion in private capital over seven years to support new Liquefied Natural Gas (LNG) imports. This guarantee is expected to enhance Petrobangla’s financial stability, enabling it to secure LNG supplies more efficiently.
Currently, imported LNG constitutes over a quarter of Bangladesh’s total gas consumption, with about 42 percent consumed by the power sector. The project aims to provide payment security and working capital solutions to facilitate LNG imports under long-term contracts, thereby reducing dependence on costly 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,” stated 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 second initiative, the Bangladesh Clean Air Project, is a $290 million venture focused on tackling air pollution. Dhaka, one of the world’s most polluted cities, experiences annual fine particulate matter (PM2.5) levels that exceed WHO Air Quality Guidelines by 18 times. This project aims to strengthen the Department of Environment’s air quality monitoring network with new and improved stations. It will also operationalize the Continuous Emissions Monitoring Program for real-time tracking of major industrial pollution sources.
Through an integrated network of automated monitoring systems, the project will enforce emissions limits and provide preliminary data from major sources. It seeks to enhance vehicle emissions control by introducing a fleet of 400 zero-emission electric buses, replacing aging diesel buses. These electric buses will operate under a unified “single operator per franchise” model to improve service quality, supported by the construction of depots for charging, parking, and maintenance.
Additionally, the project plans to build five new Vehicle Inspection Centers, upgrade two non-functioning ones, and deploy mobile Vehicle Inspection Centers along with 20 mobile vehicle emissions testing units. These efforts in the transport sector are anticipated to reduce primary PM2.5 emissions by approximately 2,734 metric tons annually. “This will be the first in a new series of projects to improve the country’s air quality,” noted 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.”
The World Bank has been a longstanding partner of Bangladesh, providing over $45 billion in grants, zero- and low-interest credits since the country’s independence. In recent years, Bangladesh has been one of the largest recipients of the World Bank’s concessional financing from IDA.