The World Bank has approved an additional $350 million financing package to help Bangladesh manage fuel market volatility and strengthen energy security, according to a press release issued by the lender.
The additional financing has been approved under the Energy Sector Security Enhancement Project in Bangladesh, the statement said.
Bangladesh currently relies heavily on imported liquefied natural gas (LNG) to meet electricity demand, particularly for power generation and industrial use. The World Bank noted that disruptions in global energy markets, especially due to ongoing conflict in the Middle East, have increased price volatility and supply risks, putting pressure on Bangladesh’s foreign exchange reserves and public finances.
It warned that a prolonged geopolitical crisis could significantly affect fuel and fertiliser supplies, with low-income households likely to be the most affected.
The financing aims to strengthen Bangladesh’s energy security by supporting cost-effective LNG import arrangements amid global market fluctuations. It will also help scale up financial support for LNG imports handled by Petrobangla.
According to the World Bank, the funding will enable Petrobangla to secure LNG under longer-term contracts, reduce dependence on higher-cost spot market purchases, and ensure a more stable and affordable electricity supply.
The lender said improved energy reliability would help generate jobs, support private sector growth and contribute to broader economic stability.
The additional financing includes an International Development Association (IDA) payment guarantee-backed facility, which will support payment security for LNG imports through standby letters of credit and short-term credit lines.
These instruments are expected to help Bangladesh shift towards more predictable long-term LNG procurement while retaining flexibility to respond to market disruptions.
The original $350 million Energy Security Enhancement Project was approved by the World Bank Board of Executive Directors on 18 June 2025, and is scheduled to run until 31 December 2031.
