Govt signs $1b loan deal with IsDB for Eastern Refinery expansion to cut refined fuel import costs
The expansion project was signed in the presence of Prime Minister Tarique Rahman and IsDB Group Chairman Muhammad Sulaiman Al Jasser.
The government today (3 September) signed a $1 billion loan agreement with the Islamic Development Bank (IsDB) for the modernisation and expansion of the Eastern Refinery Project.
The agreement was signed at the Cabinet Division of the Bangladesh Secretariat in the presence of Prime Minister Tarique Rahman and IsDB Group President Muhammad Al Jasser, said PM's Deputy Press Secretary Hasan Shiplu.
Additional Secretary of the Economic Relations Division (ERD) Md Mizanur Rahman signed the agreement on behalf of the Bangladesh government, while IsDB Director General (Country Programmes) Anasse Aissami signed it on behalf of the IsDB Group.
Keep updated, follow The Business Standard's Google news channel
The financing will support the construction of the second unit of Eastern Refinery Limited (ERL), Bangladesh's only state-owned crude oil refinery, in Chattogram.
Under the project, ERL will gain additional capacity to refine 30 lakh tonnes of crude oil annually. Once implemented, the project is expected to enable the country to meet around 45%-50% of its demand for petroleum products.
IsDB is providing around $1 billion for the project, which is planned to be completed by November 2030.
The project is considered strategically important for reducing the country's dependence on imported refined petroleum products and strengthening long-term energy security.
The long-delayed Eastern Refinery expansion project has been under consideration for more than a decade.
Once completed, the second unit is expected to significantly increase Bangladesh's domestic refining capacity and reduce the foreign currency spent on importing refined fuels.
Finance and Planning Minister Amir Khasru Mahmud Chowdhury, Finance and Planning Adviser Rashed Al Mahmud Titumir, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit, State Minister for Foreign Affairs Humaiun Kobir, PM's Adviser on Education, Expatriates' Welfare and Labour and Employment Mahdi Amin, PM's Adviser on Posts, Telecommunications and Information Technology and Science and Technology Rehan Asif Asad, PM's Special Assistant Tanvir Ghani, Cabinet Secretary Nasimul Gani and Principal Secretary to the PM ABM Abdus Sattar, among other senior officials, attended the signing ceremony.
Senior officials of the IsDB Group were also present.
The signing ceremony was held during Al Jasser's visit to Bangladesh from 2 to 4 September.
The IsDB president arrived in Dhaka yesterday (2 September) to lead a high-level delegation and take part in official development programmes.
The IsDB Board of Executive Directors had approved the $1 billion financing for the Eastern Refinery modernisation and expansion project at its 367th meeting in Baku, Azerbaijan, in June.
Eastern Refinery was established in Chattogram in 1968. Plans for a second refining unit were first drawn up in 2010, but the project faced repeated delays over financing and implementation.
The expansion is now being pursued as a priority project to boost domestic refining capacity, reduce reliance on imported finished petroleum products and improve Bangladesh's overall energy security.
Following the signing ceremony, Al Jasser paid a courtesy call on Tarique Rahman at the Prime Minister's Office in the Secretariat.
During the meeting, they discussed the longstanding development partnership between Bangladesh and IsDB, as well as ways to further expand cooperation in economic development, investment and infrastructure.
They also expressed hope that cooperation and the development partnership between Bangladesh and IsDB would strengthen further in the coming days.
