Dhaka, Oct 11 (UNB) - International Finance Corporation (IFC), a member of the World Bank Group, has invested $20 million as a long-term loan in Omera Petroleum, a subsidiary of MJL Bangladesh Limited, to help the company double its capacity and increase the availability of liquefied petroleum gas (LPG), especially in rural areas.
Omera, whose parent MJL is majority owned by the Bangladeshi conglomerate, East Coast Group, is the second-largest player in Bangladesh’s LPG market by volume, said the IFC in a statement on Thursday.
The IFC loan is part of its project to double its capacity and make LPG available in nearly all sub-districts of the country.
This will expand access of LPG to 350,000 additional households (around 12 percent of the total market potential) over the life of the loan.
It will also help reduce greenhouse gas emissions by substituting kerosene, wood, and other hazardous cooking fuels, and allow the limited reserves of natural gas to be diverted to power generation and industries.
Declining natural gas supplies have prompted the Government of Bangladesh to promote LPG as a major source of primary energy.
The government aims to supply LPG as cooking fuel for 70 percent of households within the next three years.
It has also been promoting LPG usage in vehicles as an alternative to compressed natural gas CNG) and bulk LPG for industrial purposes.
“IFC is committed to delivering clean energy to all people in Bangladesh,” said Wendy Werner, IFC Country Manager for Bangladesh, Bhutan and Nepal.
“Omera’s expansion will enable businesses and families across the country to switch from biomass energy to clean LPG fuel for cooking and commercial activities. LPG makes positive development impact in Bangladesh’s energy mix. We laud the Government’s stance to promote privatization of LPG sector to create a resilient energy sector.”
Bangladesh is a low-income International Development Association (IDA) country.
IFC's country strategy for 2017-21 – while addressing other key development gaps – focuses on increasing access to electricity, and diversifying energy sources. This project will enable the end users to switch to a much cleaner and efficient fuel.
“Omera has made great socio-economic contribution across Bangladesh by delivering the largest volume of LPG using our state-of-the art infrastructure across urban & remote areas”, said Tanzeem Chowdhury, Head of Corporate Planning and Business Development.
He said this is the beginning of a long term partnership between IFC and East Coast Group to finance and build larger projects that will help achieve our Group objective to provide easy access of green fuels and clean energy to every district of Bangladesh.
Access to energy and diversification of fuel are two critical bottlenecks in the growth trajectory of Bangladesh. In the last five years, IFC has invested about $800 million to remove these obstacles. This is IFC’s first investment to promote LPG in Bangladesh, said the statement.