Staff Reporter :
In a bid to secure a waiver from US sanctions, Bangladesh is set to formally seek permission from the US Treasury to resume payments to Russia for the Rooppur Nuclear Power Plant project.
Payments due under the project have accumulated in an escrow account maintained by Bangladesh Bank since 2022, following sanctions imposed on Russia in the wake of its invasion of Ukraine. Currently, approximately $900 million is being held in the central bank’s third-party special deposit account, which temporarily holds transaction assets until agreement conditions are met.
According to official sources, the Ministry of Finance and
the Ministry of Science and Technology are preparing to apply for a US Treasury waiver within the next few weeks.
A meeting on the matter is expected to take place on the sidelines of the World Bank-IMF Spring Meetings, beginning Monday in Washington DC. Finance Adviser Salehuddin Ahmed confirmed to reporters prior to his departure that the issue would be discussed with US Treasury officials during the visit.
“Bangladesh is exploring alternative solutions,” he noted.
Under the existing loan agreement with Russia, repayments are to be made in US dollars. However, this has become increasingly difficult since several major Russian banks were removed from the SWIFT global payment system. Among them was the Bank for Development and Foreign Economic Affairs (VEB), a key institution for handling transactions related to the Rooppur project.
Since the sanctions, Russia has persistently requested payment-even in roubles-but without success. Bangladesh has also explored alternative routes, including payment through Chinese banks, though none agreed to the proposed arrangements.
Construction delays due to the pandemic triggered penalty clauses in the project contract. Moreover, the inability to process payments has further activated late payment penalties. As a result, Bangladesh initiated negotiations to revise the Intergovernmental Credit Agreement (IGCA), and Russia has agreed to waive the penalties and extend the IGCA until the end of 2026. However, the amendment remains pending as the core payment issue is unresolved, according to a finance ministry official.
The Rooppur Nuclear Power Plant project began with a $500 million preparatory loan from Russia in 2013, followed by an $11.38 billion implementation loan in 2016. Before sanctions took effect in 2022, Bangladesh had repaid approximately $1 billion in interest and advance payments.
Originally, principal repayments were scheduled to begin on 15 March 2027, but the government has proposed deferring this to 15 March 2029.
According to the latest progress report from the Bangladesh Power Development Board, the plant’s first unit is expected to commence operations in December.
