Home ›› 26 Mar 2022 ›› Front
Bangladesh has reached a consensus with Russia – which is funding the Rooppur Nuclear Power Plant Project – to set up an alternative payment gateway to carry out transactions, which will not involve the SWIFT system or any other foreign banks.
Russian government representatives and senior officials of the central bank and Sonali Bank made the decision at a tripartite meeting in Dhaka last Monday, insiders told The Business Post.
Stakeholders also decided that as it is no longer possible to send quarterly installments to Russia’s Bank for Development and Foreign Economic Affairs (VEB) due to sanctions, the money will be deposited to a Trust Bank account until further notice.
VEB had halted all transactions related to the Rooppur Nuclear Power Plant Project due a SWIFT ban that came following Russia’s invasion of Ukraine. This issue prevented Bangladesh from disbursing the installment for January-April period.
The SWIFT ban also prevented the disbursement of salary and allowances to foreign workers, and local procurement of materials.
Sonali Bank – since the inception of the project – had been paying Russia installments using USD through the SWIFT gateway. With that money, VEB had been paying the project’s Russian contractors, who were appointed by the Rosatom State Nuclear Energy Corporation.
Similarly, VEB used Bangladesh’s Trust Bank to disburse the salary and allowance of foreign project officials and cover other expenses.
At least 26,000 people are currently working on the Rooppur Nuclear Power Plant Project, and among them, 6,000 are Russian, Ukrainian and Kazakhstani nationals. Around 5,000 of the foreign employees are Russian.
Insiders say the installment for January-April period is about Tk 100 crore, which Bangladesh was supposed to pay in USD. But under the current circumstances, stakeholders have decided to pay these installments to Russia in taka.
So, Russia will open a local account in the Trust Bank, they added.
Responding to a query, Rooppur Nuclear Power Plant Project Director Dr Md Shawkat Akbar said, “Bangladesh and Russia have agreed to the alternative transaction method after Russian bank VEB faces Swift ban. Our counterpart will soon inform us after opening a local bank account.
“Then, we will disburse the installments to that bank after securing the finance ministry’s approval. The process is being supervised by the Bangladesh Bank.”
He further said, “Bangladesh can disburse installments to Russian banks that did not face SWIFT ban, but if those funds get stuck, Russia will not take responsibility. In such a case, Bangladesh will have to shoulder any losses.
“So we have decided not to use this method due to inherent risks.”
Bangladesh is implementing the Rooppur Nuclear Power Plant Project – largest infrastructure project of the county – at a cost of $11.4 billion, and Russia is providing 90 per cent of the funds as loan assistance through the VEB.
During the project agreement process, Bangladesh requested Russia to allow installment payment with a dual-currency system (USD and Taka). However, Russia at that time did not agree to the dual-currency proposal. So Bangladesh had been paying with USD.
But Russia has asked Bangladesh to pay in Taka following the recent SWIFT ban on that nation’s banks. Bangladesh will save on SWIFT charges by paying Russia with Taka instead of USD.
Ministry of Science and Technology’s Senior Secretary Ziaul Hasan said, “The work on the Rooppur Nuclear Power Plant Project is going on full swing, but we are keeping the matter under observation.
“We are supervising the project ourselves. Russia will pay us with an alternative method. There is no reason for any concerns.”
The construction of the Rooppur plant is expected to be completed within 2023 if work continues at the current speed. Bangladesh Atomic Energy Commission under the science and technology ministry has been implementing the project where Russian company Atomstroyexport constructed two units of 1,200MW each, at a cost
of $11.4 billion.
After the Covid-19 pandemic struck Bangladesh in 2020, many projects including the Dhaka Metro Rail were stalled, but the work on Rooppur Nuclear Power Plant progressed at a steady pace.
Insiders said the plant’s machines will be tested after finishing the primary work of the power plant this year. There is an obligation to supply 100MW electricity in the project area by this December. Fuel loading for the first unit of the plant will be completed by February 2023. As of February, around 50 per cent of the plant was completed.
As per the international policy, the power grid should be ready within two-three months of fuel loading. For that, the power grid construction must be completed by this December.
