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The World Bank’s Board of Executive Directors has approved two new projects worth $640 million to enhance energy security and improve air quality in Bangladesh. In local currency, this amounts to approximately BDT 7,822 crore (at an exchange rate of BDT 122.22 per USD). A key component of these initiatives includes introducing 400 zero-emission electric buses in Dhaka to replace old, polluting diesel buses, aiming to curb vehicle emissions and improve urban air quality.
The announcement was made in a press release from the World Bank’s Dhaka office on Thursday, June 19, 2025. Gail Martin, Interim Country Director for Bangladesh at the World Bank, emphasized that strengthening energy security and reducing air pollution are critical economic and developmental priorities for Bangladesh. “By addressing gas supply constraints and urban air pollution, these projects will support economic growth, enhance productivity, and create employment opportunities,” she said.
Energy Security Project: $350 Million Allocation
Of the total funding, $350 million is allocated to the “Energy Sector Security Enhancement Project” under Petrobangla, the state-owned oil and gas company. This project aims to secure cost-effective financing to bolster gas supply reliability. Using an IDA guarantee, the initiative will mobilize up to $2.1 billion in private capital over the next seven years to import liquefied natural gas (LNG). This will enhance Petrobangla’s creditworthiness, ensuring a stable LNG supply.
Currently, over a quarter of Bangladesh’s gas consumption comes from imported LNG, with 42% of total gas used in power generation. Gas shortages often disrupt electricity production, negatively impacting the economy. The project will facilitate long-term LNG import contracts, reducing reliance on expensive spot market purchases and ensuring payment security.
Olanka Bisiriyu Idebiri, World Bank Senior Energy Specialist and Task Team Leader, stated, “This project will help Bangladesh secure gas supplies cost-effectively, supporting reliable and affordable electricity for industries and households, and fostering economic growth and resilience.”
Clean Air Project: $290 Million to Combat Air Pollution
The second initiative, the “Bangladesh Clean Air Project,” with $290 million in funding, targets the country’s severe air pollution problem. Dhaka ranks among the world’s most polluted cities, with annual fine particulate matter (PM2.5) levels 18 times higher than World Health Organization guidelines.
The project will strengthen the Department of Environment’s air quality monitoring network with new and upgraded stations and introduce a Continuous Emissions Monitoring Program to track pollution from major industrial sources in real time. A key focus is reducing vehicle emissions by deploying 400 electric buses, which will operate under a unified “single operator per franchise” model to ensure high service standards. Dedicated depots will be established for charging, parking, and maintaining these buses.
Additionally, the project includes constructing five new vehicle inspection centers, upgrading two dysfunctional ones, and deploying mobile inspection units and 20 mobile emission testing units. These measures are expected to reduce annual primary PM2.5 emissions by approximately 2,734 tons.
Anna Luisa Gomes Lima, World Bank Lead Environmental Specialist and Task Team Leader, noted, “This is the first in a series of projects to improve air quality in Bangladesh. As air pollution transcends borders, no single country can tackle it alone.” The project will also promote regional dialogue and data sharing to address air pollution collectively.
AI/MR
