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Dhaka Tribune

Russia: Repay Rooppur plant loans in Ruble

The government has halted loan repayment to Russia following the sanctions imposed by the United States and European Union

Update : 27 Sep 2022, 08:24 PM

Russia has requested Bangladesh to repay the loans taken for constructing the Rooppur nuclear power plant in their currency, the Ruble, as Moscow is introducing its currency as an alternative to the US dollar to avoid western sanctions.

The government has halted loan repayment to Russia following the sanctions imposed by the United States and European Union over the Russian war against Ukraine.

Bangladesh repays outstanding loans to Russia on a half-yearly basis.

Two installments for July-December 2021 and January-June period in 2022 were not paid.

Russia in November 2015 confirmed $491.31 million worth of loan for the preparatory works of the power plant.

The entire amount has already been disbursed to Dhaka.

Official data with ERD showed Bangladesh had repaid the lion's share of the loan with interest and principal for this tranche of the borrowings for the country's maiden nuclear-power plant.

The interest on the loan was charged at LIBOR plus 1-3%, payable in 10 years with a grace period of 5 years.

According to the Economic Relations Division (ERD), Moscow later in July 2016 confirmed another $11.38 billion in loans for Bangladesh to construct the 2,400MW nuclear plant at Rooppur in Pabna.

Out of the $11.38 billion, Russia till last fiscal FY22 had released $3.28 billion for funding the power plant.

Seven months ago in February 2022, Russia invaded Ukraine in an operation reportedly to forestall NATO expansion. In retaliation the US and the EU sanctioned Russia.

Major Russian banks have been removed from the international financial messaging system Swift, which delays payments to Russia for its oil and gas exports and for repayment of its investments against different projects across the globe.

The US has barred Russia from making debt payments using the $600million it holds in US banks, making it harder for Russia to repay its international loans.

Russia's central bank assets have been frozen, to stop it using the $630 billion (£470 billion) of reserves it has in foreign currencies.

The western measures prompted Russia as well as its ally China to try to push their currencies -- Ruble and RMB -- as alternative international trading currencies and also go for currency swaps with trading partners.

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