The Asian Development Bank said on Monday it will provide a $167 million loan to Bangladesh to boost natural gas production and expand transmission infrastructure, part of a sustainable economic development project valued at $453 million.
"The project will help the government address the country's energy crisis by making available additional clean energy, particularly imported natural gas, through the transmission network,” Hongwei Zhang, Finance Specialist (Energy) in ADB’s South Asia Department said in a statement.
The Asian Infrastructure Investment Bank (AIIB) is expected to lend an additional $60 million, subject to board approval, which will be managed by ADB. It is the second project to be cofinanced by ADB and AIIB.
Bangladesh’s economy is growing fast. But domestic natural gas supplies cannot keep pace with soaring demand for energy, resulting in a rising dependence on a more expensive oil and diesel-based power generation. With gas reserves depleting, Bangladesh is trying to meet the supply shortage by importing liquefied natural gas.
The government will provide $226 million for the project, expected to be completed in late 2021.
Bangladesh has cut in half its incidence of poverty during 1990 and 2015 – meeting a core Millennium Development Goals, gaining the lower-middle-income status in 2015. The government of South Asian country of 160 million people, developed its seven-year plan unto 2020 to reach the middle-income level.
In recent years, ADB development efforts in Bangladesh have focused on energy security, transport services and connectivity, education and skills development, water resources management, urban infrastructure, and finance.