The interim government in Bangladesh headed by Muhammad Yunus has been told by Russia to pay $630 million in outstanding and current interest on a loan for the Rooppur Nuclear Power Plant by Sunday (Sep 15).
According to a letter from the Russian authorities, written to Bangladesh’s Economic Relations Division (ERD), dated 21 August, Dhaka owes $480 million in interest and penalty charges for the period from March 15, 2022 to March 15, 2024. Additionally, $150 million in interest is due for the period from March 16 to September 15, 2024.
Moscow has requested that the outstanding payments be made in either US dollars or Chinese yuan and deposited in bank of China’s Shanghai branch.
The letter written by VEB.RF – a major financial development institution and the Russian government’s representative agency, comes in the backdrop of Bangladesh requesting alternative transaction methods to settle the overdue interests.
Notably, Russia lent a $12.65 billion loan that carries a maximum interest rate of four per cent with extra penalty interest rate of 2.4 per cent for overdue payments.
The payment deadline is September 15, which is Sunday, while September 16 and 17 are non-business days in China, which means the earliest Bangladesh can deposit the money is September 18. Missing the deadline could incur more penalties.
Russia has also declined Bangladesh’s request to defer principal repayment, scheduled to begin in March 2027, until March 2029.
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Bangladesh owes Adani Group
Bangladesh also owes a huge chunk of money to Indian conglomerate Adani Group and its subsidiary Adani Power. In November 2017, a 25-year, 1,496 MW deal was signed by Adani Power (Jharkhand) Ltd (APJL) with the Bangladesh Power Development Board under the Power Purchase Agreement.
Under the deal, Bangladesh had been purchasing 100 per cent of electricity produced by APJL’s Godda plant, which amounts to 7-10 per cent of Bangladesh’s base load.
In the previous calendar year, the Gautam Adani-owned company exported approximately 7,508 million units of power to Bangladesh which is 63 per cent of India’s total power exports (11,934 million units).
Notably, Dhaka had not paid over $800 million in payments to Adani Group with the company stating that the backlog of overdue payments had become ‘unsustainable’.
(With inputs from agencies)
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