IFC leads $126m financing for Bangladesh LNG

The investment arm of the World Bank received a $500m commitment last month for its infrastructure financing platform.

The International Finance Corporation (IFC), the investment arm of the World Bank, has led a $125.7 million debt financing for a Liquefied Natural Gas (LNG) co-development project with Excelerate Energy Bangladesh.

IFC is the lead arranger of the debt financing package for the $179.5 million project. It will invest $32.8 million from its own account and the balance from UK-based CDC Group, Germany’s DEG, the Netherlands’ Entrepreneurial Development Bank (FMO) and Japan International Cooperation Agency (JICA), according to a release.

The Moheshkhali Floating LNG project is a partnership between IFC and Excelerate Energy of Texas to co-develop Bangladesh’s first LNG import terminal. The terminal will provide the critical infrastructure required for the country to access natural gas from global markets and enable Petrobangla, the state-owned energy company, to increase natural gas supply in the country by up to 20 percent. This increase will support up to 3,000MW of power generation capacity. Construction will begin in 2017 and the terminal is expected to be in service by mid-2018.

“Our partnership with IFC has been essential to the development of this project,” said Excelerate’s chief financial officer, Nick Bedford. “IFC has demonstrated its commitment to bringing new energy to Bangladesh with the execution of these agreements. Excelerate takes great pride in helping bring sustainable energy solutions to countries with high energy demand and we expect this project to have a great impact on the wider Bangladeshi economy.”

Excelerate Energy provides integrated services along the entire LNG value chain. It offers a full range of floating regasification services, from FSRU to infrastructure development to LNG supply.

IFC has been an active player in the infrastructure financing space. Last year, it launched a $5 billion infrastructure programme called MCPP Infrastructure to finance infrastructure development in emerging markets. Both Eastspring Investments, the Asian asset management unit of the UK’s Prudential, and Allianz Global Investors, the asset management arm of the eponymous German insurer, have agreed to commit $500 million to the platform.

In the past decade, the IFC has invested over $45 billion, including funds mobilised from other investors, in infrastructure and natural resources companies. In fiscal year 2015, IFC’s commitments in such projects reached $5.8 billion.