The International Finance Corporation and Texas-based Excelerate Energy will co-develop Bangladesh’s first liquefied natural gas import terminal.
The $179.5 million Moheshkhali Floating LNG project will allow state-owned energy firm Petrobangla to increase the country’s natural gas supply by up to 20 percent, according to the IFC. It will support up to 3GW of power generation capacity. Construction is set to begin this year, with the asset in service by next summer.
The IFC and Excelerate announced last week that they have secured $125.7 million in debt financing for the scheme, including a $32.8 million IFC loan. The remainder of the debt package comes from London-based CDC Group, Germany’s DEG, Dutch development bank FMO and the Japan International Cooperation Agency. The IFC will also add $10.8 million of equity, with Excelerate chipping in $43.1 million.
“The IFC has demonstrated its commitment to bringing new energy to Bangladesh with the execution of these agreements,” said Excelerate chief financial officer Nick Bedford. “We expect this project to have a great impact on the wider Bangladeshi economy.”
The terminal will be constructed off Moheshkhali island in the Bay of Bengal. Natural gas is Bangladesh’s main energy source, accounting for around three-quarters of electricity consumption.
“Addressing the issue of depleting gas supplies is critical for the country,” said Hyun-Chan Cho, the IFC’s head of infrastructure and natural resources for the Asia-Pacific region. “We hope this first LNG import facility in Bangladesh will pave the way to expand support to the power sector and industry, promote growth and mitigate climate change impacts.”