World Bank approves $640mn for Bangladesh’s LNG and clean air projects
The World Bank (WB) today approved $640 million in loans to Bangladesh for two projects aimed at enhancing gas supply and improving air quality in the country.
"Enhancing energy security and air quality are critical economic and development priorities for Bangladesh," said World Bank Interim Country Director for Bangladesh, Gayle Martin.
For all latest news, follow The Daily Star's Google News channel. "These two projects will help Bangladesh boost economic growth, improve productivity, and create jobs."
The $350 million project for energy sector security enhancement will improve gas supply by facilitating cost-effective financing for Petrobangla, the state-owned oil and gas company.
An IDA guarantee will mobilise up to $2.1 billion in private capital over seven years for new Liquefied Natural Gas (LNG) imports, enhancing Petrobangla's creditworthiness. As imported LNG accounts for over a quarter of Bangladesh's total gas consumption, primarily for power generation, this project will provide payment security and working capital to secure long-term LNG contracts, reducing reliance on expensive spot market imports, said the multilateral lender.
"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," said World Bank Senior Energy Specialist, Olayinka Bisiriyu Edebiri.
The second project is the Bangladesh Clean Air Project.
The $290 million project adopts a comprehensive approach to tackle air pollution, which caused over 159,000 premature deaths and 2.5 billion days of illness in 2019, with health costs equivalent to 8.3 per cent of GDP.
Dhaka's annual fine particulate matter (PM2.5)
levels, which are a component of air pollution, exceed WHO guidelines by 18 times.
The project will strengthen the Department of Environment's air quality monitoring network with new stations and operationalise a continuous emissions monitoring program for real-time tracking of major industrial pollution sources, said the WB.
It also aims to improve vehicle emissions control, introducing 400 zero-emission electric buses, replacing polluting diesel vehicles, and establishing charging depots.
Additionally, it will construct five new and upgrade two existing Vehicle Inspection Centres, alongside deploying mobile testing units.
These transport interventions are projected to cut primary PM2.5 emissions by approximately 2,734 tonnes annually.
"This will be the first in a new series of projects to improve the country's air quality," said World Bank Lead Environment Specialist, Ana Luisa Gomes Lima.
"The project will facilitate regional dialogue and data sharing for reducing air pollution."
The World Bank has committed over $45 billion in grants and low-interest credits to Bangladesh since its independence, with Bangladesh being among the largest recipients of IDA concessional financing.
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