Tk 766.76 crore allocation for RNPP in FY24

The government is going to allocate Tk 766.76 crore for the Rooppur Nuclear Power Plant (RNPP) project in the upcoming budget for the 2023-24 fiscal year.

In a tripartite meeting of the Finance Division last week, it was decided to reduce the government allocation for the power plant in the next financial year to Tk 766.76 crore from Tk 911.77 crore.

However, due to the US sanctions imposed against financial institutions of the Russian Federation since April last year, uncertainty has been created over the size of project assistance for the first nuclear power plant in Bangladesh.

It is not yet clear how Bangladesh’s financial transactions with Russia will be. The government is also in doubt about how much money Russia will be able to provide for the development budget.

Finance Division sources said in a recent virtual meeting with the Ministry of Foreign Affairs, the Russian Federation has proposed to send the money for the Rooppur project through the financial institution of a third country like China or India. But Bangladesh Bank has calculated that Bangladesh may suffer financially due to the transaction through a third country.

Earlier, Russian Bank, the central bank of the Russian Federation, in a letter to Bangladesh Bank Governor Abdur Rouf Talukder, said that considering the current situation, a special financial infrastructure is needed which will not collapse easily and ensure reliable settlements for trade and economic activities.

The letter said, “The existing interbank infrastructure of Russia and Bangladesh is not sufficiently capable of providing all mutual foreign trade services without the involvement of intermediary banks from a third country. In this context, we would be grateful if Bangladesh could assist in establishing direct linkage between Russian and Bangladeshi banks.”

If Bangladesh agrees to undertake this initiative, the letter requested to prepare a list of Bangladeshi banks interested in developing relationships with Russian partners and share the list with the Bank of Russia.

The RNPP was allotted Tk 13,395.60 crore in the current financial year; of which, 30 per cent, or Tk 4,020.78 crore, was spent by the end of January. The allocation in the revised ADP was reduced to Tk 11,139.15 crore.

Meanwhile, German company Siemens AG has refused to supply gas-insulated switchgear (GIS) for the substation of the RNPP. So it was decided to get GIS service from a Chinese company, said officials from the Ministry of Power Energy and Mineral Resources.

State Minister for Power, Energy and Mineral Resources Nusrul Hamid said that the progress of the first unit of the RNPP is about 87 per cent and the work of the power grid has been completed.

The two units of RNPP will generate 2400 MW of electricity. The initial cost of constructing this power plant is estimated at Tk 1,13,092.9 crore; of which, project assistance is Tk 91,040 crore and government expenditure is Tk 22,052.92 crore.