ADB approves $167m loan to improve Bangladesh’s gas production efficiency

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 co-financed by ADB and AIIB. ADB made the disclosure in a press release issued on Monday. “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,” said Hongwei Zhang, Finance Specialist (Energy) in ADB’s South Asia Department. Natural gas is providing nearly 75% of total primary energy consumed in Bangladesh, with over half this used to generate electricity. However, domestic natural gas supplies cannot keep pace with the soaring demand for energy, resulting in a rising dependence on oil and diesel-based power generation. With gas reserves depleting, the Government of Bangladesh is trying to meet the supply shortage by importing liquefied natural gas “By addressing gas supply constraints and transmission bottlenecks, the project will increase the energy sector’s contribution to sustainable economic growth in Bangladesh,” Hongwei Zhang said. The project will install seven wellhead gas compressors to increase pumping pressure and ensure steady extraction at the Titas gas field, Bangladesh’s largest field. The project will also boost gas transmission by building 181 kilometres of transmission pipeline from Chittagong to Bakhrabad southeast of Dhaka. The $453 million project is expected to be completed in late 2021. It will substitute the use of other fossil fuels, thereby reducing over 700,000 tons of carbon dioxide emissions per year over the ensuing 10 years. The Government of Bangladesh will provide $226 million for the project.