Bangladesh pays Russia $15m in taka for Rooppur plant as dollar payment stalled

• $1.265 billion was supposed to be paid in 32 instalments
• But payment remained stuck for 2.5 years after 22 instalments
• Sanctions on Russia necessitates alternative payment arrangements

The Bangladesh government has recently paid the equivalent of $15 million in taka for the Rooppur Nuclear Power Plant project as the payment in dollars has remained stuck for two and a half years over sanctions on Russia, officials familiar with the matter told TBS yesterday.

International sanctions on Russian banks due to the ongoing conflict with Ukraine necessitated revising the payment conditions. As a result, officials said, Atomstroyexport, a subsidiary of Russia's state nuclear agency Rosatom, agreed to accept partial payments in taka.

They said the payment was made through the state-owned Sonali Bank by converting a portion of the contract amount into taka after the Project Implementation Committee approved the procedure in early June.

Md Zahedul Hasan, director of the Rooppur project, told TBS, "The payment, equivalent to the advance amount of $15 million, will be used for local subcontracting activities. The Rooppur project includes constructing two 1,200MW units by Atomstroyexport. The first unit is nearing completion."

As the project's progress had been hampered by regular payment difficulties, Atomstroyexport agreed to accept partial payments in local currency to ensure continuous funding, said the officials. The decision was crucial in maintaining the project's momentum, which is currently 78.14% complete, they said.

The Rooppur Nuclear Power Plant, the country's first nuclear power project located in Pabna's Ishwardi, is supported by Russia's financial and technical assistance. The project, being implemented by the Bangladesh Atomic Energy Commission under the Ministry of Science and Technology, is expected to start trial production by the end of this year, with commercial production slated for next year.

According to meeting minutes of the Project Implementation Committee, the contract value for the construction of the Rooppur Nuclear Power Plant is $12.65 billion. Of the amount, 90% ($11.38 billion) will be covered by a loan from Russia, and the remaining 10% ($1.265 billion) will be paid upfront by the Bangladesh government.

The contract specified that $1.265 billion would be paid in 32 instalments, with four instalments per year from July 2016 to June 2024. As per the contract terms, with the approval of the relevant ministry, a little over $1.07 billion was paid in 22 instalments to the designated Vnesheconombank until 2021.

Historically, plans for a nuclear power plant in Rooppur date back to the Pakistan era, but significant progress began post-independence. The first phase of construction started in 2013, with substantial work commencing in 2017. The project utilises Russia's 3+ VVER 1200 reactors, with plans for a second nuclear power plant adjacent to the current site.

This strategic move ensures the continuation of a critical infrastructure project, highlighting the flexibility and resilience of international collaborations in the face of global financial challenges.