November 21, 2016 / 5:15 AM / 3 years ago

Asia Development Bank to lend Bangladesh $167 mln to boost gas industry

DHAKA, Nov 21 (Reuters) - The Asian Development Bank said on Monday it will provide a $167 million loan to Bangladesh to boost natural gas production and expand transmission infrastructure, part of a development project valued at $453 million in total.

“The project will help the government address the country’s energy crisis by making available additional clean energy, particularly imported natural gas, through the transmission network,’ the ADB said, quoting Hongwei Zhang, Finance Specialist (Energy) in ADB’s South Asia Department, in a statement.

The ADB said in September it would lend Bangladesh $8 billion in loans over the next five years to improve infrastructure, often cited as one of the major hindrances to growth in the South Asian country of 160 million people.

A shortfall in supplies of natural gas has forced Bangladesh to burn oil, a costlier option, to generate electricity.

The gas development project is expected to be completed in late 2021. The Government of Bangladesh will provide $226 million for the project.

The Asian Infrastructure Investment Bank (AIIB) is expected to lend an additional $60 million, subject to board approval, which will be managed by ADB. This is the second project to be cofinanced by ADB and AIIB. (Reporting by Ruma Paul; Editing by Kenneth Maxwell)

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