July 12, 2017
The Japan International Cooperation Agency (JICA) signed a loan agreement that will utilize project financing for a project to construct and operate a liquefied natural gas import terminal that will be carried out by Excelerate Energy Bangladesh Limited (hereinafter “Excelerate”), a special-purpose corporation established in Bangladesh by Excelerate Energy Limited Partnership, a US corporation, and International Finance Corporation (hereinafter “IFC”), a member of the World Bank Group. Co-financing of the loan will be provided by the IFC, CDC Group plc, Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and Nederlandse Financierings–Maatschappij voor Ontwikkelingslanden N.V. (FMO).
Under the project, Excelerate will construct an offshore liquefied natural gas (LNG) import terminal comprising fixed infrastructure, port services, and a charter floating storage and regasification unit (hereinafter “FSRU”)  for supplying natural gas and related operating facilities off the shore of Moheshkhali in southeast Bangladesh, contributing to a stable supply of natural gas in the country and alleviating the scarcity of primary energy resources. JICA will finance a portion of the funds needed for the project to Excelerate.
As the economy of Bangladesh has been growing at a rate averaging more than six percent per year for the past 15 years, the demand for energy has been growing rapidly and is projected to increase at an average of 5.3 percent per year through 2040. Natural gas accounts for 74 percent (2015) of the energy sources used to produce electricity in Bangladesh, and according to current predictions , the gas supply capacity of Bangladesh will be only 1,700 million standard cubic feet per day (MMSCFD) in 2025, leaving a large gap with the expected demand of 3,100 MMSCFD. It is essential that natural gas imports be promoted toward improving the energy supply, but there are currently no natural gas import bases in Bangladesh, and providing one is a priority.
An advantage of an offshore LNG import terminal is that the construction period is shorter than that for a similar facility built on land. Constructing the first natural gas import terminal in Bangladesh, the project is expected to contribute to the speedy improvement of the energy supply.
This project is the first co-financing project based on a cooperation memorandum  signed between the IFC and JICA in May 2017 to promote efficient co-financing by JICA to the private sector in developing countries. JICA will continue providing Bangladesh with support in the energy field while proactively utilizing its partnerships with international financing institutions such as the IFC and advancing the formation of projects that contribute to socioeconomic development in developing countries and regions.
「Conceptual view of FSRU operation」(Photo courtesy of Excelerate Energy)
「Sister ship of FSRU」(Photo courtesy of Excelerate Energy)
1: FSRUs are specialized LNG vessels that can receive, store, and vaporize LNG and deliver natural gas to the consumption destination through specially designed offshore and near-shore facilities.
2: “Power & Energy Sector Master Plan,” People's Republic of Bangladesh