Bangladesh has secured a US$3.1 billion trade financing package from the International Islamic Trade Finance Corporation (ITFC) for fiscal year 2026-27 (FY27) to support imports of liquefied natural gas (LNG), fuel oil and fertiliser, aimed at strengthening the country’s energy and food security.
“We have reached a consensus on a $3.1 billion financing package from ITFC for the fiscal year that began today,” Petrobangla Director (Finance) AKM Mizanur Rahman told Just Energy News after the negotiations.
The Bangladesh delegation, comprising 11 members, was led by Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky on June 29 in Jedda, Saudi Arabia. Bangladesh Petroleum Corporation (BPC) Chairman Md Rezanur Rahman also took part in the negotiations.
BPC to receive $2bn
Under the agreement, BPC will receive $2 billion, up from $1.65 billion in the previous fiscal year, according to officials involved in the negotiations.
Officials said the increase was driven by higher international fuel prices following the conflict involving Israel, the United States and Iran, which has raised Bangladesh’s projected fuel import costs.
BPC Director (Finance) Najneen Parveen told Just Energy News that the corporation expects its fuel import expenditure to rise by around $500 million to $6.5 billion in FY27 because of the conflict.
BPC imports Murban crude oil from ADNOC of the UAE and Arabian Light crude from Saudi Aramco. Janata Bank currently opens letters of credit (LCs) for Murban crude imports, while ITFC provides financing for payment settlements. ITFC also directly finances Arabian Light crude imports after Agrani Bank stopped opening LCs because of the dollar shortage.
Najneen said Bangladesh negotiated a financing cost of SOFR plus 1.90%, down from SOFR plus 1.95% under the previous arrangement.
“The lower financing cost will help reduce pressure on the country’s foreign currency reserves,” she said.
Petrobangla LNG financing
Petrobangla will continue to receive financing for LNG imports under existing ITFC facilities.
ITFC signed a $100 million LNG financing facility in 2024 and a $300 million facility in 2025, both of which remain valid until 2027.
Although the approved LNG financing ceiling stands at $600 million, Petrobangla has so far secured same amount under the programme previous fiscal, AKM Mizanur Rahman said.
He added that the financing cost for LNG imports has also been reduced by 0.05 percentage point to SOFR plus 1.90% following the latest negotiations.
BADC to receive $500m for fertiliser imports
The Bangladesh Agricultural Development Corporation (BADC) is set to receive $500 million in ITFC financing for fertiliser imports in FY27.
Officials said ITFC has finalised the financing package at a cost of SOFR plus 1.85%.
A separate $100 million fertiliser financing agreement, signed in September 2025, has yet to be disbursed because ITFC temporarily suspended the facility amid the Middle East crisis. Officials said ITFC has now agreed to release the funds within a month to facilitate fertiliser imports.
BADC officials also requested that the remaining $200 million under the programme be released quickly and made available for fertiliser imports from any country. They further recommended that future financing agreements avoid country-specific sourcing restrictions while giving preference to member countries of the Islamic Development Bank (IsDB).
ITFC support to Bangladesh
ITFC, an autonomous member of the Islamic Development Bank Group headquartered in Jeddah, has been supporting Bangladesh since 2008, after taking over the IsDB’s trade financing operations.
The IsDB has supported Bangladesh since 1977, financing fuel oil imports for BPC from 1997 before ITFC assumed the role.
Between 2008 and FY26, ITFC provided approximately $21.77 billion in financing to support Bangladesh’s energy security.
During a visit to Bangladesh in May 2026, the ITFC delegation expressed interest in expanding its support beyond energy to agriculture.
Then, the ERD urged ITFC to increase the country’s overall financing ceiling to $3.5 billion for FY27, citing rising global commodity prices, growing import demand and the need to strengthen energy and food security.