IFC, a member of the World Bank Group, and Excelerate Energy Bangladesh Limited (Excelerate) are co-developing the Moheshkhali Floating LNG project – Bangladesh’s first liquefied natural gas (LNG) import terminal. The project will be located offshore Moheshkhali island in the Bay of Bengal with a project cost of $179.5 million. IFC and Excelerate today announced securing the debt financing for the project to help expand access to clean energy in Bangladesh. The equity for the project had been tied up earlier with IFC coming in with a contribution of $10.8 million and Excelerate’s equity amount of $43.1 million.
As lead arranger for the project, IFC helped arrange the debt financing package of $125.7 million for the LNG project including IFC’s loan of $32.8 million from its own account and the balance from CDC Group, DEG, FMO and JICA. The funding will support the timely construction and installation of the fixed infrastructure required for the project.
Bangladesh’s first LNG import terminal will enable Petrobangla, the state-owned energy company, to increase natural gas supply in the country by up to 20 percent, sufficient to support up to 3,000 MW of power generation capacity. The construction of the terminal will commence in the fourth quarter of 2017 and is expected to be in service by mid-2018.
Honorable Advisor to the Prime Minister of Bangladesh Dr. Tawiq-E-Elahi Chowdhury presided over the signing.
“Our partnership with IFC has been essential to the development of this project,” stated Excelerate’s Chief Financial Officer Nick Bedford. “IFC has demonstrated its commitment to bringing new energy to Bangladesh with the execution of these agreements. Excelerate takes great pride in helping bring sustainable energy solutions to countries with high energy demand, and we expect this project to have a great impact on the wider Bangladeshi economy.”
The terminal is the first fully integrated turnkey floating terminal solution whereby all services will be provided under a single contract by a single provider – Excelerate. The concession agreements for the project can serve as a template for other LNG projects in the country.
“IFC is committed to a sustained effort towards partnering with Bangladesh in bringing reliable and affordable clean energy to all,” said IFC Regional Industry Head, Infrastructure and Natural Resources, Asia Pacific Hyun-Chan Cho. “Addressing the issue of depleting gas supplies is critical for the country. We hope this first LNG import facility in Bangladesh will pave the way to expand support to the power sector and industry, promote growth and mitigate climate change impacts.”
The Moheshkhali Floating LNG terminal will provide the critical infrastructure required for the country to access natural gas from global markets which is especially important considering declining domestic natural gas reserves, limited hydro and wind resources, scarce land availability for large-scale solar deployment, and increasing dependence on expensive, imported liquid fuels in the country.
The terminal will include the provision of one of Excelerate’s existing floating storage and regasification units (FSRU), the installation of a subsea buoy system anchored offshore, and the employment of port service vessels during operation. The FSRU will have 138,000 cubic meters of LNG storage capacity.