$1B IsDB DEAL SIGNED FOR EASTERN REFINERY EXPANSION

The government on Thursday signed a $1.004 billion financing agreement with the Islamic Development Bank (IsDB) to modernise and expand Eastern Refinery Limited (ERL) in Chattogram, paving the way for a major boost in domestic fuel production and energy security.
The deal was signed at the Bangladesh Secretariat in the presence of Prime Minister Tarique Rahman and IsDB Group Chairman Dr Muhammad Al Jasser. 
The project is scheduled for completion by November 2030, according to a press release from the Prime Minister’s Office (PMO).
The financing will support construction of ERL’s second refining unit, which will add three million tonnes of crude-oil refining capacity annually.
Once completed, the expanded refinery is expected to meet around 45%-50% of Bangladesh’s demand for petroleum products, the PMO said.
The IsDB board of executive directors approved the financing at its 367th meeting in Baku, Azerbaijan, in June.
The deal was signed during Al Jasser’s 2-4 September visit to Bangladesh. 
He arrived in Dhaka on Wednesday with a high-level delegation to attend official development programmes.
Established in Chattogram in 1968, ERL is the country’s only state-owned crude-oil refinery. Plans for a second refining unit were first drawn up in 2010, but the project faced repeated delays over financing and implementation issues.
The expansion is now being treated as a priority project to increase domestic refining capacity, reduce dependence on imported finished petroleum products and strengthen energy security.
Speaking at the ceremony, Prime Minister Tarique Rahman said the modernisation and expansion of ERL would strengthen Bangladesh’s energy security and economic resilience while supporting its long-term growth as the government seeks to turn the country into a regional manufacturing hub.
“Today we mark a milestone. We are signing the financing agreement for the Modernisation and Expansion of the Eastern Refinery Limited. This is more than a transaction. It is a statement of confidence that the Islamic Development Bank believes in Bangladesh,” he said.
The prime minister thanked the teams at the Economic Relations Division (ERD), Energy and Mineral Resources Division, Eastern Refinery and the IsDB Regional Hub in Dhaka for making the deal possible.
“For decades, the Islamic Development Bank has stood by Bangladesh and we are proud to be a founding member of this Bank. That membership means a lot to us. It is built on more than finance. It is built on trust, solidarity and shared purpose,” he said.
Tarique said the new government had set a goal of building a trillion-dollar economy by 2034.
“This is not a slogan. It is a plan. We intend to double the size of our economy this decade through exports, investment and financial discipline,” he said.
He said the government wanted to transform Bangladesh into a manufacturing hub and regional gateway, with electronics, pharmaceuticals, light engineering and green industries driving the next phase of growth.
The prime minister also referred to government initiatives including family and farmers cards and the ongoing process of issuing health cards.
He said geopolitical tensions, global supply-chain disruptions, energy and food insecurity, climate change, technological transformation and rising development-financing costs were creating growing pressure on developing economies.
“No country can face these alone. Partnerships matter more than ever,” he said, calling for a more innovative, responsive and results-oriented approach to Bangladesh–IsDB cooperation.
Bangladesh is increasingly looking to the IsDB and its affiliates as reliable sources of development financing, he said, while praising the Islamic Concessional Fund (ICF) as a low-cost financing window for developing countries.
Tarique urged the ICF to expand its concessional financing opportunities for member states facing growing challenges.
“Bangladesh is deeply committed to benefiting from the ICF. Our colleagues at the ERD are collaborating with your colleagues at the Regional Hub in Dhaka to identify potential projects,” he said.
Describing the ERL deal as an example of what partnership can achieve, the prime minister said the project was not merely an energy investment but also an investment in Bangladesh’s economic resilience and long-term growth.
He expressed hope that the project would become a landmark in Bangladesh–IsDB cooperation and demonstrate the value of trusted, results-driven partnerships.
Tarique also said the IsDB could serve as a bridge among member states, connecting countries with strengths in energy, infrastructure and other sectors so that they could build with one another rather than simply alongside one another.
Finance and Planning Minister Ameer Khoshru Mahmud Chowdhury, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit, State Minister for Foreign Affairs Humaiun Kobir and several senior government officials attended the programme.