Russia Unlikely to Extend Loan Period for Rooppur Plant

The meeting, chaired by ERD Secretary Shahriar Kader Siddique, included representatives from Atomstroyexport, the Russian Exim Bank, contractor Rosatom, the Russian Embassy in Dhaka, and various Bangladeshi government ministries. Attendees reported that Russia is unwilling to extend the disbursement period unless outstanding payments are cleared.

The current loan disbursement period is set to expire in December. If not extended, Russia may suspend financial support for the project. Both the ERD and the Ministry of Science and Technology believe that only high-level discussions between the two governments can resolve this issue.

The Rooppur project has a total estimated cost of $12.65 billion, with Russia providing $11.38 billion as a loan. By August 14, Russia had disbursed $7.33 billion over 25 installments, leaving $4.05 billion to be disbursed by December.

A senior project official expressed concern that receiving such a substantial amount within three months is unrealistic, especially as approximately 70% of the project is already complete. In June, Bangladesh proposed extending the disbursement period to December 2026.

The official noted, "During this time, the Bangladesh government has changed, and global circumstances have shifted. Currently, around $700 million in outstanding interest payments are due to Russia."

The urgency for repayment has heightened tensions regarding loan disbursement. Approximately 5,000 Russian workers are involved in the project, raising concerns about their future if funding halts.

Despite the difficulties, Bangladesh remains hopeful that Russia will not deny the extension. The ERD plans to update the government on Russia's stance and the project's overall status.

On August 21, VEB.RF Bank, representing the Russian government, requested $630 million in outstanding and current interest payments by September 15. Complications arose as payments must be made in US dollars or Chinese yuan, with the Bank of China facing US sanctions, complicating transactions.

Under the loan agreement, Bangladesh is required to make interest payments every six months. Following the onset of the Ukraine conflict, US sanctions hindered regular payments, leading to accumulating fines and penalties.

Principal repayment is scheduled to begin in March 2027. Due to a foreign currency reserve crisis, Bangladesh proposed extending this period by two years. Although initially agreed upon, Russia has since rejected this proposal.

An official from the Ministry of Science and Technology acknowledged that the project is not progressing as planned, particularly regarding the construction of transmission lines for electricity generation. Without these lines, the planned December start for one power plant unit is at risk.

Sonali Bank Limited, which manages loan transactions, confirmed that sanctions have made payments to Russia challenging. To address this, an escrow account has been established at Bangladesh Bank to hold outstanding amounts. The primary issue remains determining the currency and bank for sending funds.