The Asian Development Bank will provide US$ 167 million in loan to Bangladesh to implement a project to expand natural gas transmission infrastructure and improve production efficiency at Titas Gas Field.
The board of directors of the Manila-based ADB on Monday approved the loan for the US$ 453 million cofinanced project with the Asian Infrastructure Investment Bank.
AIIB is expected to lend an additional US$ 60 million, which is subject to board approval, and will be managed by ADB, a news release issued by the ADB said.
It is the second project to be cofinanced by ADB and AIIB, the multilateral lending agency said.
Earlier, ADB and AIIB for the first time cofinanced in a road infrastructure project in Pakistan.
AIIB, which was launched in December last year, in June approved US$ 165 million loan for Bangladesh for a power distribution system upgradation and expansion project.
Of the total US$ 453 million, Bangladesh will provide US$ 226 million for the project which is expected to be completed in late 2021.
Under the project, seven wellhead gas compressors will be installed at the Titas Gas Field, the largest reserve located at Brahmanbaria in the country, to increase pumping pressure and ensure steady extraction.
The project will also boost gas transmission by building 181 kilometers of transmission pipeline from Chittagong to Bakhrabad in Comilla.
The project will also substitute the use of other fossil fuels, thereby reducing over 7 lakh tonnes of carbon dioxide emissions per year over the ensuing 10 years, ADB said in the release.
‘It will help the government address the country’s energy crisis by making available additional clean energy, particularly imported natural gas, through the transmission network,’ ADB’s South Asia Department finance specialist (energy) Hongwei Zhang said.
By addressing gas supply constraints and transmission bottlenecks, the project will increase the energy sector’s contribution to sustainable economic growth in Bangladesh, he said.
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