Modernizing and expanding refining capacity of Eastern Refinery Limited, the country's lone facility for converting crude oil into refined petroleum products, is finally set to see the light of day. Besides directly reducing Bangladesh's reliance on imports generally in the energy sector, and particularly for refined petroleum.
The Jeddah-based Islamic Development Bank (IsDB) will provide over $1.0 billion in financing for the modernization project. A financing agreement titled "Modernization and Expansion of Eastern Refinery in Bangladesh" was signed between the Government of Bangladesh and the IsDB on Thursday (September 3).
Dr. Md Mizanur Rahman, Additional Secretary of the Economic Relations Division (ERD), signed the agreement on behalf of Bangladesh, while Anasse Aissami, Director General of Country Programs, signed for the IsDB. Prime Minister Tarique Rahman and IsDB Group Chairman Dr. Muhammad Al Jasser were present at the signing ceremony.
The ERD stated that the project will be implemented by Bangladesh Petroleum Corporation (BPC) under the Energy and Mineral Resources Division.
This funding is set to elevate the ongoing development partnership between Bangladesh and the IsDB, which operates as an instrument of the Organisation of Islamic Cooperation (OIC) to new heights. According to the ERD, this marks the largest investment in a single project by the IsDB till now in Bangladesh.
Upon implementation, the refining capacity of Eastern Refinery—the country's primary oil refinery—will treble from the current 15 lakh metric tonnes to 45 lakh metric tonnes per annum.
The government expects the project to enhance fuel supply capacity, reinforce national energy security, and enable the production of eco-friendly Euro-5 standard petroleum products.
Tripling the refinery's capacity will significantly decrease Bangladesh's dependence on imported refined oil, thereby saving foreign currency and ensuring stability in the domestic energy supply chain.
Commitment to Continue Support
As one of Bangladesh's key multilateral development partners, the IsDB has historically extended support through grants, project loans, trade financing, private sector funding, and export credit guarantees.
Following the agreement signing, IsDB Group Chairman Dr. Muhammad Al Jasser paid a courtesy call on Prime Minister Tarique Rahman, reiterating the bank's commitment to supporting Bangladesh's development priorities.
During the meeting, the Prime Minister emphasized the importance of concessional financing and assured full government cooperation to deepen the partnership between Bangladesh and the IsDB.