Bangladesh is set to borrow from the Islamic Development Bank (IDB) for the first time to fund fertiliser imports, officials confirmed on Thursday.

The government will sign two agreements with the Jeddah-based lender on 10 September to receive the first instalment of a US$100 million Murabaha loan for fertiliser and other agricultural inputs, according to the Economic Relations Division (ERD).

The deals will involve the ERD, the ITFC, and the Bangladesh Agricultural Development Corporation (BADC), all under the Ministry of Agriculture.

The ITFC has also agreed to extend up to US$500 million in short-term credit to Bangladesh for fertiliser purchases in the coming months, depending on demand. The six-month facility will carry the Secured Overnight Financing Rate (SOFR) plus 1.75% interest.

Bangladesh imports 5.5 to 6.4 million tonnes of fertiliser annually, valued at about US$1.36 billion in 2023. Its leading suppliers last year included Morocco, Canada, and Saudi Arabia. Fertiliser demand for FY26 is projected at 2.7 million tonnes of urea and 3.2 million tonnes of non-urea varieties, while current stocks remain below requirements.

Until now, ITFC financing for Bangladesh has been primarily focused on fuel oil imports, with US$1.3–2.0 billion typically provided each year to the Bangladesh Petroleum Corporation.

Recently, the lender confirmed another US$500 million loan to Petrobangla for liquefied natural gas purchases.