Bangladesh is facing frequent electricity shortages and increasing demand from businesses and households, making the nuclear power project a crucial aspect of the country’s future energy security.
According to two officials familiar with the matter, Bangladesh has agreed to pay Russia roughly $300 million in yuan currency to settle the payment for the $12.65 billion nuclear power plant project located in the central district of Pabna, 140 kilometers west of Dhaka.
The plant is being built with the assistance of Rosatom, a state-owned atomic company in Moscow, and has been funded by a Russian loan. The officials, who declined to be identified due to rules, stated that the payment mechanism was finalized during a meeting last week, although Russia initially refused to accept yuan as payment because of potential currency conversion losses and instead insisted on ruble payments.
According to the officials, Russia is still pushing for an alternative payment system for trade and business, which was not specified. Bangladesh’s Finance Minister, AHM Mustafa Kamal, has not responded to requests for comment on the deal.
Moscow had previously asked Bangladesh to open a direct payment channel between their central banks to facilitate fund transfers, which were hampered by sanctions against Moscow due to its involvement in the Ukraine conflict. Russia had also suggested that Dhaka consider various proposals, such as a currency swap agreement, using the ruble in trade settlements, and enabling the Bank of Russia’s messaging system to facilitate bilateral trade and investment.
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