Bangladesh has formalised a $1 billion loan agreement with Islamic Development Bank (IsDB) to support the upgrading and expansion of the Eastern Refinery.
The treaty was signed at the Secretariat’s Cabinet Division in the presence of Prime Minister Tarique Rahman and IsDB Group President Muhammad Al Jasser, according to an announcement by Deputy Press Secretary Hasan Shiplu.
The capital will finance the construction of a second unit at Eastern Refinery Limited (ERL) in Chattogram, which stands as the country’s sole state-owned crude oil processing facility.
This development is regarded as strategically critical to reinforce national energy resilience and curb the country’s reliance on foreign refined petroleum.
Once the second unit is built, it is projected to heavily increase domestic processing capacity, thereby decreasing the volume of foreign currency spent on importing processed fuels.
Consequently, the expansion is being fast-tracked as a priority infrastructure project to enhance domestic refining capabilities and bolster overall energy security.
The expansion scheme has remained on the drawing board for over a decade. ERL was originally set up in Chattogram in 1968.
Although initial designs for a second refining facility were drafted in 2010, the project encountered continuous setbacks regarding its funding and execution.
The IsDB’s Board of Executive Directors formally approved the $1 billion credit facility during its 367th session held in Baku, Azerbaijan, in June.
Al Jasser, who reached Dhaka on Wednesday leading a high-ranking delegation to engage in official development programmes, is visiting Bangladesh from 2 to 4 September.
