The Russian government is hesitant to approve Bangladesh’s request to extend the loan disbursement period for the Rooppur Nuclear Power Plant by two years.
During a recent meeting at the Economic Relations Division (ERD), Russia signaled that they wouldn’t extend the loan period unless Bangladesh clears its outstanding payments. The loan period is set to expire in December.
If the extension isn’t granted, Russia may stop funding the project, which could cause delays. The ERD and the Ministry of Science and Technology believe only high-level discussions between the two governments can resolve the issue.
The project, estimated to cost $12.65 billion, is mainly funded by a Russian loan, covering 90% of the total, with the rest funded by Bangladesh.
So far, Russia has disbursed $7.33 billion, with $4.05 billion remaining, which must be received by December.
A senior official stated that it would be challenging to receive such a large sum in three months, so Bangladesh had requested an extension until 2026.
However, global changes and Bangladesh’s delayed interest payments, which now total around $700 million, have caused tension. Russia wants this amount settled quickly.
Russia plays a significant role in the technical operations of the plant, with 5,000 Russians currently working on the project. If funding stops, it’s unclear how this workforce will be affected. Bangladesh hopes for a resolution through government discussions.
On August 21, VEB.RF Bank from Russia sent a letter asking Bangladesh to pay $630 million by September 15 to cover outstanding interest.
However, due to U.S. sanctions on the Bank of China, Bangladesh is unable to make the payment. This issue has caused further delays in clearing interest and penalty fees.
Repayment of the principal loan is scheduled to start in March 2027, but due to a foreign exchange reserve crisis, Bangladesh asked to push it to 2029.
Initially, Russia agreed but recently rejected this request. The project is also facing delays in constructing transmission lines, which are essential for starting power generation by December.
Sonali Bank, which handles Bangladesh’s transactions with Russia, has set up an escrow account in Bangladesh Bank to hold the owed funds.
The challenge now is deciding which currency and bank will be used to send the payment.
