Bangladesh: Gas Sector Efficiency Improvement Program

Sovereign Project | 56004-001

The proposed program will contribute to the government's program to improve demand-side management and energy conservation by installing prepaid gas meters for all domestic customers by December 2023 and improve operational performance of the gas distribution companies, focusing on the government's priority areas of Greater Dhaka and Chittagong. Installation of prepaid gas meters is expected to (i) reduce system losses through saving of gas by preventing gas wastage, (ii) build up awareness among customers to use gas more efficiently, (iii) improve financial health of gas distribution companies by earning revenues in advance and reducing billing, collection, and monitoring cost, (iv) improve management efficiency and enhance customer service of gas distribution companies, (v) prevent accident due to gas leakage in internal pipelines, and (vi) help meet the national climate target by reducing carbon emissions by gas savings.

Project Details

  • Project Officer
    Yusupov, Aziz A.
    South Asia Department
    Request for information
  • Country/Economy
    Bangladesh
  • Sector
    • Energy
Project Name Gas Sector Efficiency Improvement Program
Project Number 56004-001
Country / Economy Bangladesh
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan: Gas Sector Efficiency Improvement Program
Ordinary capital resources US$ 200.00 million
TA: Gas Sector Efficiency Improvement Program
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Energy / Energy efficiency and conservation - Energy utility services

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The proposed program will contribute to the government's program to improve demand-side management and energy conservation by installing prepaid gas meters for all domestic customers by December 2023 and improve operational performance of the gas distribution companies, focusing on the government's priority areas of Greater Dhaka and Chittagong. Installation of prepaid gas meters is expected to (i) reduce system losses through saving of gas by preventing gas wastage, (ii) build up awareness among customers to use gas more efficiently, (iii) improve financial health of gas distribution companies by earning revenues in advance and reducing billing, collection, and monitoring cost, (iv) improve management efficiency and enhance customer service of gas distribution companies, (v) prevent accident due to gas leakage in internal pipelines, and (vi) help meet the national climate target by reducing carbon emissions by gas savings.
Project Rationale and Linkage to Country/Regional Strategy

Fast economic growth in Bangladesh has been accompanied by a rapid increase in energy consumption, as well as rising carbon dioxide (CO2) emissions. In 2010, the total primary energy supply in Bangladesh reached 1.25 million tera-joule (TJ), while the corresponding CO2 emissions were 49 million tons (MtCO2). By 2019, these two indicators soared to 1.81 million TJ and 88 MtCO2 (rising by 45% and 80%), respectively. This has translated into a fast domestic energy supply deficit, a situation that net energy imports tripled from 180 TJ to 533 TJ during the period.[1]

Waste of natural gas is prevalent among domestic customers who consume about 13% of national gas production. While all other customer categories are provided with gas meters, most domestic customers use non-metered gas. Domestic customers now pay a fixed amount of Taka 975 per month for each double burner regardless of the quantity of gas they use. Since they do not pay for every unit of gas, they tend to use gas inappropriately often using gas for drying clothes, keeping rooms warm in winter, and even saving the expenses of match sticks, nor do they consider using more efficient gas appliances. Some domestic customers do not report gas leakage in internal pipelines because it doesn't affect their bills, which leads to increased system losses and potential accident.

Of nearly 4.3 million domestic gas customers nationwide, only about 350,000 have come under prepaid metering coverage as of November 2021. Following the government's program to install 2 million prepaid gas meters by December 2022 and 100% domestic customers under prepaid gas metering coverage by December 2023, each of six gas distribution companies are making the move to procure and install prepaid gas meters for the remaining domestic customers in accordance with the government's standard technical specifications. A feasibility study conducted by the government estimated that the amount of actual gas saving by a prepaid gas meter could be 44.69 cubic meters a month. If all domestic customers are under prepaid gas metering coverage nationwide, the amount of gas saving could reach 43 BCF or Tk.16 billion a year.

Impact

Energy security in Bangladesh improved (Gas Sector Development Plan 20212041)

Outcome

Efficiency and sustainability of gas distribution improved

Outputs

Demand-side measures for efficiency improvement and safe gas use implemented

Low-carbon energy transition promoted

Customer services-oriented management enhanced

Institutional capacity and operational management strengthened

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Yusupov, Aziz A.
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Energy & Mineral Resources Division, MOPEMR
Ministry of Energy and Mineral Resources
Ministry of Power, Energy and Mineral Resources
Timetable
Concept Clearance 04 Jan 2023
Fact Finding 31 Mar 2023 to 31 Mar 2023
MRM 03 Apr 2023
Approval -
Last Review Mission -
Last PDS Update 10 Jan 2023

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