The Bangladesh government on Thursday signed a $1 billion loan agreement with the Islamic Development Bank (IsDB) to finance the Modernisation and Expansion of Eastern Refinery Project.
The agreement was signed at the Bangladesh Secretariat in the presence of Prime Minister Tarique Rahman and IsDB Group President Dr Muhammad Sulaiman Al Jasser, according to the Prime Minister's Deputy Press Secretary Hasan Shiplu.
The financing will support the construction of a second refining unit at Eastern Refinery Limited (ERL) in Chattogram, the country's only state-owned crude oil refinery.
The expansion is expected to increase Bangladesh's domestic refining capacity, reduce dependence on imported refined petroleum products and save foreign currency spent on fuel imports. It is also considered a key project for strengthening the country's long-term energy security.
The IsDB Board of Executive Directors approved the $1 billion financing at its 367th meeting in Baku, Azerbaijan, in June.
The expansion project has faced delays for more than a decade. Plans for a second refining unit were first prepared in 2010 but were repeatedly stalled over financing and implementation issues.
The signing took place during Dr Al Jasser's four-day visit to Bangladesh from September 2 to 4, during which he is leading a high-level IsDB delegation and participating in official development programmes.
Eastern Refinery was established in Chattogram in 1968. The new expansion is now being treated as a priority project to boost domestic fuel refining and strengthen Bangladesh's energy security.
