World Bank Approves $640 Million to Improve Gas Supply and Air Quality in Bangladesh

Strategic Insights -

The World Bank has approved two projects totaling $640 million to help Bangladesh enhance energy security and air quality. The Energy Sector Security Enhancement Project and the Bangladesh Clean Air Project aim to address gas supply constraints and urban air pollution, ultimately boosting economic growth, improving productivity, and creating jobs.

Key Takeaways:

  • The Energy Sector Security Enhancement Project ($350 million) will improve gas supply security by utilizing an IDA guarantee to mobilize up to $2.1 billion in private capital for new Liquefied Natural Gas (LNG) imports.
  • The project will provide payment security and working capital solutions to facilitate LNG imports under long-term contracts, reducing dependency on expensive spot market gas imports.
  • The Energy Sector Security Enhancement Project will help Bangladesh enhance gas supply security in a cost-efficient manner, contributing to reliable and affordable electricity for industries and domestic users.
  • The Bangladesh Clean Air Project ($290 million) will take a comprehensive approach to tackle air pollution, including air quality management, vehicle emissions control, and introducing electric bus services.
  • The project aims to improve vehicle emissions control and introduce a fleet of 400 zero-emission electric bus services by replacing aging, polluting diesel buses.
  • The proposed electric buses will operate under a unified 'single operator per franchise' model for better service quality.
  • The project will establish depots for charging, parking, and maintaining the electric buses and construct five new Vehicle Inspection Centres and upgrade two non-functioning ones.
  • Combined, these interventions in the transport sector are expected to reduce primary PM2.5 emissions by approximately 2,734 metric tons per year.
  • Gayle Martin, World Bank interim country director for Bangladesh, stated that enhancing energy security and air quality are critical economic and development priorities for Bangladesh.
  • Ana Luisa Gomes Lima, World Bank lead environment specialist, said that the project will focus on air quality management, strengthen the Department of Environment's air quality monitoring network, and operationalize the Continuous Emissions Monitoring Program.

Statistics:

  • $640 million total project cost
  • $350 million for the Energy Sector Security Enhancement Project
  • $290 million for the Bangladesh Clean Air Project
  • Up to $2.1 billion in private capital to be mobilized for new Liquefied Natural Gas (LNG) imports
  • 18 times the WHO Air Quality Guidelines exceeded by annual fine particulate matter (PM2.5) levels in Dhaka
  • 8.3% of the gross domestic product (GDP) in 2019 equivalent to health costs of air pollution
  • 400 zero-emission electric bus services to be introduced
  • 159,000 premature deaths attributed to air pollution in 2019
  • 2.5 billion days of illness attributed to air pollution in 2019

Sources:

  • World Bank press release
  • Gayle Martin, World Bank interim country director for Bangladesh
  • Ana Luisa Gomes Lima, World Bank lead environment specialist
  • Bangladesh Clean Air Project document
  • Energy Sector Security Enhancement Project document
  • World Bank website