Dhaka grants full tax break on Rooppur debt repayment to Russia’s Rosatom subsidiary
The development comes following a request from Russia for assurance that no taxes would be imposed on ASE or its nominated agent when repatriating the funds to Russia
Highlights:
- Bangladesh grants full tax exemption on Rooppur Nuclear Plant loan payments
- Russia requested assurance of tax-free fund repatriation via Atomstroyexport
- Decision finalised at meeting led by adviser Salehuddin Ahmed
- Exemption labeled "special consideration," not precedent for future projects
- Sanctions hindered payments; workaround created using Sonali Bank escrow account
- First Rooppur unit to begin test run in December 2025
The interim government has decided to grant full tax exemption on both principal and interest payments related to the Rooppur Nuclear Power Plant loan to Russian state-owned company Atomstroyexport (ASE), a subsidiary of Rosatom, and its designated agents.
The development comes following a request from Russia for assurance that no taxes would be imposed on ASE or its nominated agent when repatriating the funds to Russia.
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The decision, which was finalised at a meeting chaired by Salehuddin Ahmed, adviser to the Ministry of Science and Technology and the Ministry of Finance, on 30 September, effectively waives all taxes on the funds being transferred. Finance Secretary Khairuzzaman Mozumdar and National Board of Revenue (NBR) Chairman Abdur Rahman Khan were among those present at the meeting.
According to the meeting minutes, the Bangladesh government will provide a tax exemption to ASE and its nominated agent on the principal and interest amounts paid, or to be paid, for the Rooppur project, which the agent transfers to Russia.
The government has stressed that this exemption is a "special consideration" only for the Rooppur project and "cannot be taken as a precedent for any other project in the future." The NBR is expected to take the necessary steps to implement this.
The construction of the 2,400-megawatt Rooppur Nuclear Power Plant, a flagship project under Russian financial and technical assistance, began in 201
Sanctions and agent appointment
The move resolves a persistent issue where Bangladesh was unable to remit instalment payments to Russia due to US-imposed sanctions on Russian banks following the start of the Ukraine-Russia conflict. Bangladesh had been regularly servicing the debt as per the loan agreement until 15 March 2022, but was unable to make payments until 15 September 2024.
To circumvent the sanctions, Rosatom's ASE opened a US dollar escrow account with Sonali Bank in Bangladesh and appointed the Spanish firm, Roin World, as its agent to collect the instalment money from the Bangladeshi bank and transfer it to a Russian bank.
The arrangement was tested successfully with a $10 million payment from Bangladesh's reserve on 30 December last year, followed by a $30 million payment from ASE's Sonali Bank escrow account on 5 February.
Since then, payments have been deposited into ASE's dollar account at Sonali Bank according to the repayment schedule.
While the original loan agreement stipulated tax-free status for the principal and interest repayments, a 20% tax on the agent's commission for foreign loan repayment remained in place. Russia's demand for a complete tax-free transfer, to cover the agent's commission as well, prompted the government's recent decision.
A science and technology ministry official confirmed that Rosatom will soon begin transferring the principal and future instalments, including the backlog, through the nominated agent, following the assurance of the tax exemption. An NBR official indicated that a circular waiving all existing taxes on the loan repayment would be issued once the NBR Chairman returns to the country from the US.
Project background
The construction of the 2,400-megawatt Rooppur Nuclear Power Plant, a flagship project under Russian financial and technical assistance, began in 2017.
The total estimated cost of the project is Tk1,13,092 crore, with Tk22,053 crore coming from government funds and Tk91,040 crore from a Russian loan.
Separate loan agreements for a $500 million feasibility study and the main $11.38 billion project were signed in 2013 and 2016, respectively.
The science and technology adviser recently informed TBS that the first unit of the Rooppur Nuclear Power Plant is scheduled for a test run in December. Work is currently underway to determine the tariff for the electricity generated by the new facility.
