Bangladesh’s interim government plans to secure a $350 million loan from multinational banks in the fiscal year 2025-26 to import Liquefied Natural Gas (LNG) and address the rising demand for natural gas as local reserves decline, an official confirmed.
The Energy and Mineral Resources Division (EMRD), with technical assistance from the World Bank, will soon invite expressions of interest (EoI) from potential lenders. Negotiations with multinational banks and agencies will be conducted in phases, the official added.
“Today, we only discussed the modality of the EoI,” said an official who attended an internal meeting chaired by EMRD Secretary Mohammad Saiful Islam.
Addressing the Dollar Crisis and Payment Delays
The initiative comes amid a dollar crisis that has hindered timely LNG payments. Several multinational suppliers have warned of halting deliveries due to delayed payments. Additionally, the International Monetary Fund (IMF) has withheld the next two loan installments due to delays in implementing liquidity market reforms.
The Ministry of Finance has urged the EMRD to stabilize subsidies despite recent volatility in LNG prices.
Rising LNG Costs and Government Funding
Currently, the EMRD manages gas demand through government subsidies. The government has procured a $100 million loan from the International Islamic Trade Finance Corporation (ITFC) for LNG purchases this fiscal year, with plans to increase borrowing in the next fiscal year.
EMRD Secretary Mohammad Saiful Islam stated that the division plans to procure 94 LNG cargoes this year, requiring Tk 16,401 crore in subsidies.
“We initially planned for 90 cargoes but will now purchase an additional four from the spot market to support power generation,” said the Energy and Mineral Resources Division.
“We have asked the power division to provide market prices for the additional four cargoes,” Secretary Mohammad Saiful Islam told Just Energy News on Sunday.
Clearing Overdue Payments and Ensuring Energy Supply
The government will clear approximately $700 million in overdue payments to international oil companies (IOCs), including Chevron Bangladesh and QatarEnergy, by the end of this month, according to Power, Energy, and Mineral Resources Adviser Muhammad Fauzul Kabir Khan.
Khan also revealed that the government had incurred $25 million in interest due to payment delays, contributing to rising LNG prices.
On Monday and Tuesday, the EMRD disbursed over $100 million through Letters of Credit (LCs) and direct cash payments.
“Our priority is to ensure a steady energy supply,” Khan stated, adding that gas supply will be increased to 1,200 million cubic feet per day (mmcfd), with an additional 300 mmcfd allocated for power generation during summer.
Currently, Bangladesh’s natural gas supply stands at 2,850 mmcfd, while demand is around 4,000 mmcfd.
Bridging the Energy Gap
With electricity demand surging from 9,000–10,000 megawatts (MW) in winter to 17,000–18,000 MW in summer, additional LNG imports aim to bridge the gap.
“Around 2,000 MW is required for irrigation alone, which cannot be reduced without affecting agricultural production. The remaining 5,000–6,000 MW is consumed by air conditioning and excessive lighting,” Khan explained.
He added, “LNG supply will be increased to 1,200 mmcfd to meet the demand for power generation during peak summer months.”
