Bangladesh is not able to accept Russia's conditions regarding the extension of Rooppur power project
September 17, 2024Updated:September 17, 20243 Mins Read

Jumbangla Desk: Russia wants to extend the Rooppur nuclear power project. However, difficult conditions have been given in this case, which Bangladesh is unable to fulfill. Meanwhile, due to the current economic tension, ERD has appealed to China to increase the loan repayment period and reduce the interest rate. The details from Yugantar's report are given below-

Recently, Russia has expressed interest in extending the duration of the larger project. This information was obtained from the sources of Ministry of Finance and Economic Relations Department (ERD). No responsible official wanted to talk about this.

However, it has been learned from various sources that last May, a letter was sent from Russia to extend the term of Rooppur nuclear power project by one year till 2026 and to extend the loan repayment period. However, the country adds conditions to it.

It is said that Bangladesh will get this benefit only if the principal and interest amount of the outstanding loan is paid. But due to the Russia-Ukraine war for the last 2 years, the US sanctions have stopped the payment of Russian debt in dollars. However, the installment amount was being deposited in a separate account. Meanwhile, Russia wants alternative methods of money in the currencies of various countries including China.

But Bangladesh Bank informed that it is not possible to pay in any currency other than dollar. This is the problem. As a result, the loan and interest installments of 500 million dollars initially taken for Rooppur got stuck. The terms of this payment are now being negotiated. According to the agreement, the interest rate on Russian loans will be 1.75 percent plus the London Interbank Offered Rate (Libor). But the rate of interest will not exceed 4 percent.

According to the Implementation Monitoring and Evaluation Department (IMED) of the Ministry of Planning, 1 lakh 13 thousand 92 crore 91 lakh taka is being spent on the implementation of the Rooppur nuclear power plant construction project. Of this, Russia's debt is 91 thousand 40 crores and government funds amount to 22 thousand 52 crores. It is targeted for implementation between July 2016 and December 2025.

The physical progress of the Rooppur nuclear power plant project since its inception till last July has stood at 69.01 percent. 74 thousand 981 crore 2 lakh taka has been spent so far under the project. In this case, the financial progress has been 66.30 percent.

Meanwhile, Bangladesh has requested China to reduce the interest rate of the ongoing Chinese loan to one percent and extend the loan repayment period to 30 years. Recently, the Economic Relations Department (ERD) sent a letter in this regard to Beijing. Currently, Chinese loans have an interest rate of 2 to 5 percent and a repayment period of 20 years. If interest rates on existing Chinese loans cannot be reduced, new loans from China will be sought for longer periods and lower interest rates.

According to sources, Chinese President Xi Jinping during his visit to Bangladesh in October 2016 promised 20 billion dollars in the next four years to implement 27 projects. Later, according to that promise, the project-based agreement was signed. Until last January, Dhaka and Beijing have signed contracts worth 8.8 billion dollars in only 9 projects. Of this, Bangladesh has been able to spend only 4.91 billion dollars, which is less than one-fourth of China's promised loan. Besides, another 18 projects are being reviewed afresh.

3 projects with Chinese loans have already been completed. 6 projects are ongoing . Implementation work completed, Karnaphuli Tunnel, Dasherkandi Sewage Treatment Plant and Four Tier National Data Center Establishment Project. The 7 ongoing projects are - Rail connection at Padma Bridge, Single Point Mooring at Chittagong, Development of Power Transmission Line under PGCB, Dhaka-Ashulia Elevated Expressway and Power Distribution System Development Project under DPDC. Also, Rajshahi Wasar Surface Water Supply Project and National Information Technology Expansion Project.