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ADB, AIIB to back $453m Bangladesh gas pipeline

The scheme is the second co-financing project between the Manila-based lender and its Beijing-headquartered counterpart.

Two Asia-based development banks have identified their second co-financing project which will see them provide a combined $227 million of loans to upgrade Bangladesh’s gas pipeline network.

The Asian Development Bank has approved a $167 million loan to improve production efficiency at a gas field and expand transmission infrastructure in Bangladesh, while an additional $60 million will be provided by the Beijing-based Asian Infrastructure Investment Bank, subject to board approval. The Bangladeshi government will commit another $226 million to the project.

The $453 million scheme will involve the installation of seven wellhead gas compressors to ensure better production efficiency at the Titas gas field, the largest in the country. It also calls for the construction of a 181km of transmission pipeline from Chittagong to Bakhrabad southeast of Dhaka.

Natural gas is the country’s main energy source, accounting for nearly 75 percent of total electricity consumption. Domestic supplies do not meet increasing demand for energy amid fast economic growth, according to ADB.

The project, expected to be completed in late 2021, will help the country reduce its dependence on oil and diesel-based power generation by making the gas transmission network available for cleaner fuels, notably imported natural gas.

In June this year, the two multilaterals agreed to co-finance a highway project in Pakistan with each contributing $100 million in loans. Both of the co-financing projects will be managed by ADB.