The Asian Development Bank (ADB) is considering Bangladesh’s request for US$500-million funds for the Natural Gas Transmission and Distribution Development Investment Programme, to increase gas supply and improve gas-use efficiency. According to sources in the Economic Relations Division, the proposal was sent to the ADB, around two years ago. It is now under consideration. The proposal mentioned that, at present, gas meets 75 per cent of the energy meant for commercial use, and 58 per cent of the gas produced is used for electricity generation. As of 2012, Bangladesh’s total reserve of recoverable gas is about 26 trillion cubic feet (TCF), of which, 10 TCF has been extracted. Daily gas production is around 2,156 million cubic feet (MMCF), against the daily demand of 2,500 MMCF, indicating a daily shortage of 344 MMCF. The shortage of gas sparks disruption in power generation and also affects welfare of the people, as the majority of them—especially in rural areas—have no access to cleaner energy, the proposal said. “The gas deficit will worsen in the wake of declining gas reserves and fast-rising gas demand. This will eventually imperil Bangladesh’s energy security and constrain the national economic growth,” it added. Moreover, importing liquefied natural gas (LNG) is one of the options being considered by the government, to alleviate gas reserve constraint. Inadequate gas transmission and poor distribution infrastructure are also hurdles in Bangladesh’s gas sector. The present infrastructure coverage is inadequate to service key market areas of the country, as most of the supply points are in the north-eastern and central regions, while the delivery points are located in the south and west. “To enhance the throughput capabilities and facilitate evacuation of increased gas supply, it is important to develop the transmission network with flexible and potentially diversified future supply sources. As demand grows, the extension of the looping is necessary for full looping of the original trunk-line,” the proposal said. Gas Transmission Company Limited (GTCL) and Titas Gas Transmission and Distribution Co. Ltd (TGTDCL) will be the executing agencies for tranche 1 and tranche 2, respectively. Bangladesh Oil, Gas & Minerals Corporation (Petrobangla) will be the executing agency for capacity development component and project implementation coordination. In response to the government’s request, and in accordance with the ADB’s energy strategy, the prevailing Bangladesh country partner strategy (2011–2015), and the country operations business plan (2014–2016), ADB plans to assist the government through a multi-tranche financing facility (MFF), which will focus on expansion of gas transmission pipelines and distribution network, and enhancement of efficiency in gas use through rehabilitation of existing facilities and reduction of system losses. The proposed MFF will comprise two tranches, namely US$200 million for tranche 1 and US$300 million for tranche 2. Tentatively, tranche 1 will finance the minority gas pipeline, for construction of Dhanua-Elenga Gas Transmission Pipeline and West Bank of Jamuna Bridge-Nalka Gas Transmission Pipeline, and to facilitate institutional capacity development. Tranche 2 will support construction of pipelines for rehabilitation of distribution mainlines or distribution network, and installation of metering and regulating facilities in prospective load growth centres in and around greater Dhaka. The entire project is estimated to cost US$820 million, of which US$500 million will be financed by ADB, US$100 million by the government, and US$220 million will be sourced from co-financing.
