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Dhaka, Moscow sign $11.385bn credit deal for nuke plant

WT24 Desk

Dhaka on Tuesday signed a credit agreement with Moscow obtaining $11.385 billion Russian credit for Rooppur Nuclear Power Plant (RNPP), UNB reports. The contract was signed in Moscow.

According to a statement of ASE Group, a company of Russian Federal Atomic Energy Agency Rosatom, Sergei Anatolyevich Storchak, Deputy Minister for Finance, Russian Federation and Mohammad Mejbahuddin, Senior Secretary, Economic Relations Department, government of Bangladesh signed the agreement on behalf of their respective sides.

Earlier, Dhaka signed a general agreement (GA) with Moscow in December 25 last year to build a 2400-MW nuclear power plant, having two units each with 1200 MW capacity, in Rooppur in northern district of Pabna.

“Now we’ve both legal and financial base for implementing the Rooppur nuclear power project. For us, as the General Contractor of the project, Russia’s State Credit to Bangladesh is very important to begin the main construction works,” said Vladimir Sabushkin, senior vice-president of ASE Group of Companies, in the statement.

Rosatom will build the plant of which the first unit will go into operation in 2022, while the second one in 2023. Officials in Dhaka said the proposed credit amount of $11.385 billion is 90 percent of the $12.65 billion (equivalent to Tk 101,200 crore) construction cost of RNPP, which Russian Federation will provide as state credit to implement the project. It will also be the single largest foreign loan in Bangladesh history.

“So, the credit agreement has been one of the most important deals relating to the project,” said an official at the Ministry of Science and Technology. During the last general agreement, it was agreed by both Dhaka and Moscow that Russia will provide the loan at an interest rate of six months Libor plus 1.75 percent per annum, but it will never cross over 4 percent. Bangladesh will pay off the loan within 28 years with a 10-year grace period.

The plant construction cost will get exemption from paying value added tax (VAT) and other customs duties. But now, the officials said, the two sides will sit together to set the details of the terms and conditions of the credit facilities and its repayment.

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