Bangladesh has secured $1.004 billion in financing from the Islamic Development Bank (IsDB) to modernise and expand Eastern Refinery, a project expected to more than double the country’s domestic oil-refining capacity.
The financing agreement for the Modernization and Expansion of Eastern Refinery in Bangladesh project was signed at the Secretariat in Dhaka on Thursday.
Mohammad Mizanur Rahman, additional secretary at Bangladesh’s Economic Relations Division, signed for the government, while Anasse Aissami, IsDB director general for Country Programs, represented the development bank.
Prime Minister Tarique Rahman and Dr Muhammad Al Jasser, chairman of the IsDB Group, attended the signing ceremony.
The project, to be implemented by Bangladesh Petroleum Corporation (BPC) under the Energy and Mineral Resources Division, will raise Eastern Refinery’s annual capacity from 1.5 million metric tonnes to 4.5 million tonnes.
The government said the expansion would strengthen the country’s energy security, reduce dependence on imported refined petroleum products and enable production of fuel meeting Euro 5 environmental standards.
Greater domestic refining capacity could also help Bangladesh reduce its exposure to disruptions in international fuel markets and fluctuations in the cost of imported refined products.
The government described the financing as the largest single IsDB investment in a project in Bangladesh, marking a significant step in the two sides’ longstanding development partnership.
The IsDB has supported Bangladesh through project finance, trade finance, private-sector investment, grants and export credit guarantees.
After the agreement was signed, Dr Al Jasser met Prime Minister Tarique Rahman and reaffirmed the bank’s commitment to supporting Bangladesh’s development priorities.
Mr Rahman stressed the importance of securing financing on favourable terms and pledged government support to further strengthen cooperation with the IsDB.
The refinery expansion is part of Bangladesh’s broader efforts to increase domestic energy capacity and improve the resilience of fuel supplies as demand for petroleum products grows.