Bangladesh launches procurement tenders to confront energy and fertilizer crises

Bangladesh is currently facing a significant energy crisis, which has had a direct impact on its fertilizer production capabilities, leading to substantial operational challenges and increased reliance on imports. The country’s state-run Bangladesh Chemical Industries Corporation (BCIC), under the Ministry of Industries, reports that four out of its five urea factories have been closed due to gas shortages. This has left only the Ghorashal Polash Urea Factory operational, with an annual production capacity of 0.924 million metric tonnes, significantly below the national demand of 2.7 million metric tonnes.

The ongoing energy shortage, characterized by an inadequate supply of conventional energy sources, continues to escalate as demand grows. Although Bangladesh has two LNG terminals aimed at bolstering gas supplies, one, operated by Excelerate Energy, Inc., is currently offline following damage sustained in severe weather last May.

In response to these challenges, the government is actively seeking to augment its fertilizer supply through international tenders and government-to-government deals. Plans are underway to import 30,000 tonnes of phosphoric acid in two separate shipments by the end of the year. The first tender, identified as Pur-3.3204/2024-2025, involves importing 20,000 tonnes of phosphoric acid in bulk, to be delivered to the TSP Jetty at Chattogram Port on a cost-and-freight basis. The bid opening for this tender is scheduled for August 21, 2024. The second tender, Pur-3.3203/2023-2024, aims to import 10,000 metric tonnes of phosphoric acid, with the bid opening set for July 30, 2024.

Additionally, the Bangladesh Industries Minister, Nurul Majid Mahmud Humayun, highlighted the positive impact of the new Ghorashal-Palash Urea Fertilizer Factory, which has significantly curtailed the need for fertilizer imports, thereby conserving foreign exchange and mitigating some of the fertilizer shortages. The government’s strategic plans include the construction of two new fertilizer factories in Bhola and Ashuganj, along with a diammonium phosphate (DAP) fertilizer plant in Saudi Arabia, as part of a memorandum of understanding. These initiatives are expected to stabilize the fertilizer supply and reduce the dependency on imports in the near future.