WB to Support Bangladesh’s Energy Imports, Payments

The World Bank (WB)

Seck highlighted that securing affordable gas is a key priority for Bangladesh, stressing that the World Bank’s support would reassure global suppliers. “We are telling suppliers, ‘Don't worry about payments. You can send your gas to Bangladesh, and we’ll back the country financially.’ This guarantee will help reduce Bangladesh’s import costs,” Seck explained during a discussion on "Bangladesh-World Bank Relations: The Way Forward," organized by the Association of Former Ambassadors at the Foreign Service Academy yesterday.

Seck also touched on Bangladesh’s challenges with electricity import bills, especially its obligations to the Adani Group. While acknowledging the complexity of the situation, he pointed out that the government is under significant pressure to meet its commitments, which affects various sectors. “We’ve engaged with the energy adviser and discussed requests for support. Our focus now is on ensuring Bangladesh can secure gas at an affordable price,” Seck added.

Addressing broader support from the World Bank, Seck emphasized that the institution is committed to assisting Bangladesh with budgetary support, which will be underpinned by reforms in green growth and environmental sustainability. He stated, “We’re confident that with sound economic fundamentals and the right policy adjustments, Bangladesh can return to a path of sustainable growth.”

The World Bank is set to provide significant budget support to Bangladesh by December, Seck confirmed. He also criticized the Bangladesh Bank’s handling of foreign exchange reserves, noting that a decline from over $40 billion to current levels was largely due to misguided policies aimed at defending an unsustainable exchange rate. “This has put significant strain on the economy,” Seck remarked.

Mustafizur Rahman, Executive Director of the Centre for Policy Dialogue (CPD), echoed concerns about the country’s economic outlook, stressing the need for debt restructuring and renegotiation. “The World Bank’s decision to provide budgetary support, rather than project-specific funding, is crucial for strengthening reserves and stabilizing the taka,” Rahman said, adding that the continuation of robust remittance flows will be key to supporting the nation’s foreign reserves.

Rahman also pointed to rising inflation as a pressing issue for ordinary citizens, noting that the public’s perception of the interim government’s performance will largely depend on their standard of living and purchasing power. He highlighted the importance of domestic resource mobilization and the digitalization of tax systems as a potential solution. “The country will need tough decisions, and we hope the World Bank, along with other partners, will assist in evaluating the economy’s true state and the necessary reforms,” Rahman concluded.

The discussion underscored the need for a coordinated effort to address Bangladesh’s economic challenges and secure the country’s long-term stability.