A deal securing about $179.5 million for financing Bangladesh’s first LNG project has been signed.
For the project to help expand access to clean energy in Bangladesh, International Finance Corporation or IFC will provide $10.8 million in equity investment and Excelerate’s equity will amount to $43.1 million.
IFC and Excelerate Energy, which will implement the project on Maheshkhali Island in Cox’s Bazar, signed the agreement on Tuesday.
Energy Adviser to the PM Tawfiq-e-Elahi Chowdhury and State Minister for Power and Energy Nasrul Hamid attended the signing ceremony held at a Dhaka hotel.
As the lead arranger for the project, IFC has raised a debt financing package of $125.7 million, including IFC’s loan of $32.8 million, $25 million from CDC, $15 million from DEG, $20 million from FMO and the rest from JICA.
In July 2016, Bangladesh signed a deal with Excelerate to construct a 500mmcfd floating LNG (liquefied natural gas) terminal.
Describing the LNG terminal as a ‘milestone’, PM’s Energy Adviser Chowdhury said the government will provide all cooperation for the project.
Speaking at the ceremony, State Minister Hamid said that one of the major challenges for ensuring energy security was efficient manpower.
The LNG terminal will enable Petrobangla, the state-owned energy company, to increase natural gas supply by up to 20 percent, sufficient to support up to 3,000 MW of power generation capacity, Excelerate said in a statement on its website.
The construction of the terminal will commence in the fourth quarter of 2017 and is expected to be in service by mid-2018.