Bangladesh is preparing to introduce a new “Social Development Fund (SDF) Policy-2025”, financed through a surcharge on the sale of oil, gas, coal, and stone.
While its objectives differ, the mechanism for collecting capital is expected to mirror the Gas Development Fund (GDF) introduced in 2009.
The GDF was created through a Bangladesh Energy Regulatory Commission (BERC) directive in August 2009, which imposed a Tk0.46 surcharge per cubic meter of gas. Though intended to finance exploration and development, portions of the fund were later diverted for other uses, including LNG imports.
Officials acknowledge that misuse and delays in disbursing GDF resources undermined its original purpose of supporting domestic companies such as BAPEX, Sylhet Gas Field Company, and Bangladesh Gas Fields Company in expanding production.
According to the draft, the SDF will be financed from a share of the unit sale price of gas, oil, and minerals as determined periodically by the Energy and Mineral Resources Division and BERC. The fund will also earn interest on accumulated capital.
It will be managed by Petrobangla, the Energy and Mineral Resources Division, or boards of relevant mining companies.
Energy and Mineral Resources Division secretary Mohammed Saiful Islam said that the policy has been finalised soon.
CSR-based focus areas
Positioned as part of Petrobangla’s corporate social responsibility, the SDF will finance socio-economic development in underprivileged areas around gas fields, coal mines, and stone quarries.
Allocations will be split equally across five sectors, 20% each, including education, infrastructure, socio-economic programmes, healthcare, and special intiatives (research).
Education will include scholarships, books, lab and vocational training equipment, libraries, computers, furniture, science fairs, and sports competitions.
Infrastructure initiaves will cover support for religious institutions, preservation of historic sites, construction of bridges and culverts, social awareness programmes, aid to disadvantaged war veterans, reforestation, and assistance to vulnerable groups such as the elderly, widows, disabled, and poor.
Socio-economic programmes will focus on community development and social awareness programmes. Healthcare support will include treatment for critical diseases, aid to patients and hospitals, and medical camps. Special initiatives will provide financial aid and essential supplies for disaster victims, including floods, cyclones, earthquakes, droughts, and tsunamis.
The draft also proposes two supervisory bodies: A Fund Management Committee and a Financial Management Committee.
Unlike the GDF, which carried a conditional 4% interest on loans, the SDF will operate interest-free to avoid adding financial burdens on the public.
Officials expect the fund to generate substantial annual revenue. For instance, under BERC’s current arrangement, a small surcharge of Tk0.03 per cubic meter could yield around Tk92 crore annually for research and development initiatives.