DHAKA: The World Bank's Board of Executive Directors has approved two projects totalling US$640 million to help Bangladesh improve gas supply and air quality.
"Enhancing energy security and air quality are critical economic and development priorities for Bangladesh," Gayle Martin, World Bank interim country director for Bangladesh, was quoted as saying in a statement received here Thursday (June 19).
"By addressing the root causes of gas supply constraints and urban air pollution, these two projects will help Bangladesh boost economic growth, improve productivity, and create jobs," he added.
The Energy Sector Security Enhancement Project ($350 million) will help improve gas supply security by facilitating access to cost-effective financing for Petrobangla, the state-owned oil and gas company, said the bank.
It said the project will utilise an International Development Association (IDA) guarantee to mobilise up to $2.1 billion in private capital over seven years for new liquefied natural gas (LNG) imports.
The backing of an IDA guarantee will improve Petrobangla's creditworthiness to secure LNG supplies.
Imported LNG accounts for over one-fourth of total gas consumption in Bangladesh.
About 42 per cent of total gas consumption is in the power sector.
Hence, gas supply shortages disrupt electricity generation, negatively impacting the economy.
This project will provide payment security and working capital solutions to facilitate LNG imports under long-term contracts and thereby reduce dependency on expensive spot market gas imports.
"The project will help Bangladesh enhance gas supply security in a cost-efficient manner, contributing to reliable and affordable electricity for industries and domestic users," said Olayinka Bisiriyu Edebiri, World Bank senior energy specialist and task team leader for the programme.
"By ensuring a reliable gas supply, the project will help boost economic growth and resilience."
The Bangladesh Clean Air Project ($290 million) will take a comprehensive approach to tackle air pollution.
In Bangladesh, air pollution caused over 159,000 premature deaths and 2.5 billion days of illness, with estimated health costs equivalent to 8.3 per cent of the gross domestic product (GDP) in 2019.
Dhaka remains one of the most polluted cities in the world, with annual levels of fine particulate matter (PM2.5) exceeding by 18 times the WHO air quality guidelines.
"This will be the first in a new series of projects to improve the country's air quality," said Ana Luisa Gomes Lima, World Bank lead environment specialist and task team leader for the project.
"As air travels across borders, no single country can contain air pollution on its own.
"The project will facilitate regional dialogue and data sharing for reducing air pollution." - Xinhua
