The World Bank began disbursing its guarantee facility for Bangladesh’s import of Liquefied Natural Gas (LNG), following an agreement signed in June 2025. The Energy Sector Security Enhancement Project (P181811) provides a US$350 million IDA guarantee to facilitate LNG imports through Petrobangla, Bangladesh’s state-owned energy company. The Government has now requested that the World Bank nearly double its financing for LNG imports. 

The financing facility primarily issues standby letters of credit (LCs) (US$300 million) to multinational or foreign banks. The remaining US$50 million serves as a standby credit line for Petrobangla to cover LNG import payments in case of liquidity shortages.

Natural gas accounts for approximately 55-57 percent of Bangladesh’s energy mix. As domestic gas production declines, the country has increased its reliance on imported LNG. While the project ostensibly aims to strengthen energy security and stabilize industrial gas supply, it risks reinforcing fossil fuel dependency at a time when Bangladesh has committed to reducing greenhouse gas emissions under its Nationally Determined Contributions (NDCs). The project further distances the country from a meaningful shift to renewable energy. It also reflects the broader issue of the World Bank treating fossil gas as a temporary transition fuel, as has been noted by activists.