The World Bank has recommended $350 Million loan guarantee facility for the government, proposing preferable terms than the current foreign financing alternative.
Pathway to support the country’s long-term liquefied natural gas (LNG) import obligations in 2025.
The “revolving letter of credit facility” proposed by the WB’s Multilateral Investment Guarantee Agency (Miga) will furnish by a 100% guarantee for LCs issued by local and international banks to Petrobangla, verifying secure and swift access to LNG supplies.
A WB document shared with the government ,a copy which has been retrieved by The Business Standard, which shows the loan guarantee will be 1% less expensive than the rates suggested by the International Islamic Trade Finance Corporation (ITFC) for LNG value.
The draft also involves the opportunity for amplifying the facility beyond $350 million, finished with reducing World Bank range.
For FY26, the government will purchase $2.45 Billion from ITFC to concsequence fuel oil, LNG, and fertilisers. In addition, the loan will bear an interest rate of six-month SOFR plus 1.80%, along with a 0.2% administrative fee.
The idea allows longer repayment (9 months) and renewable credit. Guarantee could broaden over $350M, possibly covering fuel oil too. Ongoing LNG confidence develops financial stress and supplier insecurity. MIGA had supported major Bangladeshi energy and power projects. Proposal could reduce electricity costs, saving up to $2.5B.
Source: Business inspection BD
