Bangladesh has requested an additional US$350 million loan guarantee from the World Bank to secure liquefied natural gas (LNG) imports amid escalating tensions in the Middle East and rising global fuel prices. The move is part of the government’s strategy to safeguard the country’s energy supply chain against increasing volatility in international energy markets.
Petrobangla, the state-owned energy company, has asked the Economic Relations Division (ERD) to expedite the funding process to facilitate timely LNG procurement. “Our initial plan was to request $250 million, but considering the growing energy demand and recent price surges, we decided to seek $350 million,” explained AKM Mizanur Rahman, Petrobangla’s Director of Finance, in an interview with Financial Express on Tuesday.
This request would increase Bangladesh’s total World Bank-supported energy programme guarantee to $700 million, combining the existing $350 million facility approved last year under the Energy Sector Security Enhancement Project. The project, funded through the International Development Association (IDA), aims to improve energy security and ensure access to affordable financing for LNG imports.
Petrobangla has already purchased five LNG cargoes from the spot market at high prices, highlighting the urgency for additional funding. The previous $350 million IDA guarantee, approved in June 2025, has helped smooth payments and mobilise private financing for imports. Over the next seven years, the programme is expected to attract up to $2.1 billion in private capital for LNG supply.
To operationalise the initiative, Petrobangla has partnered with a consortium of eight domestic and foreign banks, offering a combination of letters of credit and credit lines:
| Facility Type | Amount (US$ Million) | Validity | Purpose |
|---|---|---|---|
| Stand-by Letter of Credit (SBLC) – long-term suppliers | 200 | 12 months | Support SPAs (Sales & Purchase Agreements) |
| SBLC – spot market suppliers | 50 | 90 days | Support MSPAs (Master SPAs) |
| Short-term credit line | 100 | Up to 12 months | Cover payments for specific LNG cargoes |
The IDA guarantee will cover repayment obligations to banks, including principal and accrued interest, but excludes penalties or default interest. According to Rahman, the guarantee is expected to strengthen Petrobangla’s credit profile, enabling it to secure LNG supplies more efficiently amid foreign-currency constraints.
LNG now accounts for over a quarter of Bangladesh’s total gas consumption, costing roughly $4.5 billion annually. With 42% of gas consumed by the power sector, any disruption could seriously affect electricity generation and broader economic activity.
Since LNG imports began in 2018, Bangladesh has imported approximately 35.59 million tonnes across 571 cargoes. With domestic gas reserves declining rapidly, Petrobangla projects that the country will require 30 million tonnes of LNG per year by 2041, as daily gas demand could reach 8 Bcf/d—more than triple the current supply of 2.45 Bcf/d.
The additional World Bank guarantee reflects Bangladesh’s proactive approach to securing its energy future and mitigating risks in an increasingly uncertain global market.