World Bank approves $640m for Bangladesh to bolster energy security, combat air pollution

In a major step toward strengthening Bangladesh's infrastructure and public health, the World Bank has approved two key projects totalling $640 million aimed at improving the country's gas supply and reducing its severe air pollution.

According to a World Bank press release issued today (19 June), the initiatives include the Energy Sector Security Enhancement Project and the Bangladesh Clean Air Project, which collectively seek to address the twin challenges of unreliable energy supply and hazardous air quality — both seen as critical obstacles to sustainable economic growth.

"Enhancing energy security and air quality are critical economic and development priorities for Bangladesh," said Gayle Martin, the World Bank's interim country director for Bangladesh. "By addressing the root causes of gas supply constraints and urban air pollution, these two projects will help Bangladesh boost economic growth, improve productivity, and create jobs."

Boosting gas supply with $350m

The $350 million Energy Sector Security Enhancement Project will support the state-owned Petrobangla in securing long-term Liquefied Natural Gas (LNG) imports. Backed by a guarantee from the International Development Association (IDA), the project aims to unlock up to $2.1 billion in private capital over seven years, read the release.

Imported LNG currently accounts for over 25% of the country's total gas consumption, with the power sector accounting for 42% of that demand. Shortages in gas supply frequently disrupt electricity production, hampering industrial activity and economic performance. The project will enable Petrobangla to access affordable financing, strengthen its creditworthiness, and reduce dependence on costly spot market gas.

"The project will help Bangladesh enhance gas supply security in a cost-efficient manner, contributing to reliable and affordable electricity for industries and domestic users. By ensuring reliable gas supply, the project will help boost economic growth and resilience," said Olayinka Bisiriyu Edebiri, World Bank senior energy specialist and project lead.

$290m project to clean the air

The Bangladesh Clean Air Project, with $290 million in funding, will tackle air pollution through a range of interventions across monitoring, enforcement, and transport, according to the release.

Air pollution is a dire public health issue in Bangladesh, contributing to over 159,000 premature deaths and costing an estimated 8.3% of the country's GDP in 2019. Dhaka ranks among the world's most polluted cities, with PM2.5 levels nearly 18 times higher than World Health Organization guidelines.

The project will strengthen the Department of Environment's air quality monitoring network, introduce continuous emissions tracking for major industries, and make data available to enforce pollution limits. It will also revolutionise public transport by introducing 400 zero-emission electric buses under a unified operation model and establishing necessary support infrastructure such as charging depots and maintenance facilities.

Additionally, the project will modernise vehicle emissions testing by constructing five new Vehicle Inspection Centers, upgrading two existing ones, and deploying mobile Vehicle Inspection Centers and 20 mobile vehicle emissions testing units.

These combined efforts are expected to cut harmful PM2.5 emissions by approximately 2,734 metric tons annually, read the press release.

"This will be the first in a new series of projects to improve the country's air quality. As air travels across borders, no single country can contain air pollution on its own. The project will facilitate regional dialogue and data sharing for reducing air pollution," said Ana Luisa Gomes Lima, lead environment specialist at the World Bank.