Dhaka: A new agreement on a $2.75 billion Islamic Development Bank financing loan for the Bangladeshi oil and agriculture sectors aims to boost the South Asian nation’s energy and food security by facilitating the import of petroleum products, liquified natural gas and fertilizers.
The International Islamic Trade Finance Corp., a division of the Jeddah-based IsDB, announced earlier this week that it had signed a “landmark annual financing plan with the Government of Bangladesh for US$2.75 billion to support the country’s energy and agriculture sectors.”
The plan will cover the period from July 2025 to June 2026 and will “facilitate the importation of petroleum products, Liquified Natural Gas (LNG) and fertilizers by Bangladesh Petroleum Corporation (BPC), Bangladesh Oil, Gas & Mineral Resources Corporation (Petrobangla) and Bangladesh Agricultural Development Corporation (BADC) respectively,” the ITFC said in a statement.
Bangladesh imports most of its fuel and requires about 1.5 million metric tons of crude oil annually, according to BPC.
The IITFC loan will help the state-owned entity responsible for importing and marketing fuel oil meet its obligations to the suppliers. The two main ones are Saudi Aramco and the UAE’s Adnoc.
“Without the loan support from ITFC, it wouldn’t have been possible for us to ensure a smooth petroleum supply in the local market. For importing crude oil, we need a letter of credit support of around $80 million. Our state-owned banks can’t provide such a huge amount,” Mohammed Morshed Hossain Azad, BPC’s general manager of finance, told Arab News.
“ITFC pays this amount to Saudi Aramco and UAE-based Adnoc on behalf of Bangladesh Petroleum Corp. After six months, we repay this amount to ITFC in installments through our state-owned banks. This loan support from ITFC was crucial for Bangladesh’s energy security … For maintaining a smooth and uninterrupted supply of fuel in our market, there is no alternative in hand.”
While Bangladesh’s energy imports have been supported by ITFC financing before, it is the first time that fertilizer imports are too.
Bangladesh’s annual demand for chemical fertilizers is about 6 million metric tons, of which about 80 percent comes from abroad.
“The timely supply of fertilizer is very important for ensuring the food security of around 175 million people of Bangladesh,” Mohammed Moazzem Hossain, BADC accounts controller, told Arab News.
Under the ITFC deal, the BADC will import triple superphosphate and diammonium phosphate from Saudi Arabia, Tunisia and Morocco.
“We import DAP and TSP fertilizer from these three Muslim countries,” Hossain said.
“This is the first time in the history of Bangladesh that we have received loan support for importing fertilizer. The interest rate is also convenient for us.”
