Russian credit to BD higher in FY24

Moscow provided a higher volume of loans to Dhaka in fiscal year 2023-24 despite the latter's two-year halt to repayments, officials said on Monday.
Russia disbursed $1.295 billion credit last fiscal, which was the second-highest amount for the nuclear-power project in Bangladesh, showed the data available with the Economic Relations Division (ERD).
Bangladesh has been failing to repay the loan for two years as the USA imposed sanctions on Moscow in the SWIFT payment system after its evasion of Ukraine, said finance ministry officials.
Therefore, Bangladesh has failed to serve outstanding debt of some $591 million until November in the last calendar year, according to ERD officials.
Data showed Moscow released a total of $7.77-billion credit, including $1.295 billion in FY24, to Bangladesh for executing the Rooppur nuke power project.
Of $7.77 billion disbursed, Moscow released the highest $1.434 billion in loans in FY22 and the second-highest $1.295 billion in FY24.
Earlier, Bangladesh borrowed two loans for installing the nuke plant-technical assistance (TA) worth $491 million under an agreement in November 2013 and the gigantic $11.38 billion in July 2016.
According to the deals, the repayment against the first $491-million loan was supposed to be made in FY23, as its maturity was 10 years and the interest rate was LIBOR plus 1.0-3.0 per cent.
For the total $11.38-billion loan, Bangladesh will repay it at LIBOR plus 1.75-per cent annual rate and the total rate will not cross 4.0 per cent.
The loan will have to be repaid in 30 years with a 10-year grace period.
As the grace period is yet to start, the payment of the principal of the loan has not started yet.
Of the $591-million stuck-up amount for repayments to Russia, $495 million is interest and the remaining $96 million principal amount of the unutilised loans, ERD officials said.
The principal amount of $96 million is kept aside for the $491-million loan under the first TA project.
On the other hand, $495 million is earmarked for serving as interest for both TA and investment loans for the Rooppur project.
When asked, an ERD official told the FE that they have not repaid at least five instalments against the outstanding loan (interest and principal) to Russia for the past two years.
"However, we had deposited the money at the Sonali Bank's Escrow Account which is equivalent to the debt to be served for the outstanding loans," he added.
According to ERD officials, the remaining undisbursed $5.10 billion out of $11.38-billion loan in the pipeline will be disbursing gradually upon implementing the remaining work of the project.
The Bangladesh Atomic Energy Commission is working to install the 2,400 megawatt-capacity two nuke reactors at Rooppur for generating power by 2025.

[email protected]