Cabinet okays credit deal with Russia

The cabinet yesterday approved the draft of the inter-state credit agreement between the governments of Bangladesh and the Russian Federation for construction of the Rooppur Nuclear Power Plant in Pabna.

As per the agreement, a $12.65 billion deal would be signed between the two countries in July or August this year, Cabinet Secretary Mohammad Shafiul Alam told reporters after the weekly cabinet meeting.

He however could not say if the deal would be inked in Bangladesh or Russia.

Of the amount, the Russian government would provide $11.39 billion as the Russian line of credit. The Bangladesh government would provide the rest. This is going to be the country's biggest ever contract equivalent to Tk 101,200 crore.

The credit would have a lifespan of 30 years with a 10-year grace period. Bangladesh would have to start repaying the loan, in instalments, from March 2027, the cabinet secretary added.

The interest rate of the loan would be additional 1.75 percent from the last six months' LIBOR rates and it would not cross maximum four percent. As per the London Interbank Offered Rate (LIBOR), an index that is used to set the cost of various variable-rate loans, this week's interest rate was 0.93 percent.

That means the interest rate would start from 2.68 percent [0.93+1.75] approximately.

Last December, Bangladesh inked a $12.65 billion contract with a Russian public firm to construct Rooppur Nuclear Power Plant that would generate 2,400 megawatt of electricity.