The Rooppur Nuclear Power Plant would require a staggering $13.5 billion to build, Finance Minister AMA Muhith told The Daily Star on Tuesday.
Once its financing from Russia is confirmed, this 2,400MW power plant would be the costliest project ever undertaken by the government.
This is the first time the government has actually revealed the price of the plant. When the government first seriously floated the idea of this plant in 2009, some experts had said it would require around $2-3 billion.
Is $13.5 billion too much? Would it be right for our country to invest so much for one power plant? Would it make electricity costly?
Experts said this was a fair price and investing in it would secure Bangladesh's energy future better and that it would not make electricity costly.
“Firstly, nuclear power project for any nation is a huge undertaking. You have to have that political will to take this undertaking. It is not cheap anywhere. Getting finance for a nuclear power project itself is a complicated issue,” said an expert.
Globally, a 1,200MW nuclear power plant costs around $5 billion to $6.5 billion. Last week, the UK took China as a partner to build a 3,200MW Hinkley nuclear power plant at a cost of $18 billion. Finland was building a 1,200MW plant for $6.5; Hungary 2,400MW for $13.5 billion; and Turkey 3,600MW for $20 billion.
Financing such a project remains a major challenge for any country. This was why the UK government had taken China as a partner in its latest project. This was also the reason why such projects were selectively built around the world.
Out of the $13.5 billion, Russia would be giving Bangladesh $12 billion with a term that is between soft and commercial loan. According to Muhith, the loan would charge maximum 4 percent interest with a repayment period of 28 years with a grace period of 10 years. This is cheaper than the commercial loan offered by the Asian Development Bank.
Experts said the huge loan itself could shelve a power project for decades and the Rooppur project remained in cold storage since the late 60's until 2009.
Until now, the Matarbari 1,200MW coal-fired power plant along with a deep-sea port project was the costliest project in Bangladesh with a $4.5 billion price tag.
But the Rooppur project has double the power generation capacity of Matarbari and the plant's expected life is over 60 years. The Matarbari project has an expected life of just 22 years.
If the Matarbari plant's life was extended twice to match with that of the lifespan of Rooppur, one would see its building cost catch up with that of the Rooppur's.
“But the real beauty of a nuclear power project is its very low operational cost. Three or four cartridges of a few hundred grams of enriched uranium replace hundreds of thousands of tonnes of coal. And each cartridge will last for three to four months,” said the expert.
This cost is nothing compared to that required to run a coal power plant. A coal power plant in its life time will need billions of dollars worth of coal.
Consequently, the per kilowatt hour nuclear power generation cost would stand below $0.04 (Tk 3.2). The power tariff for Matarbari coal project has been estimated at Tk 7 per unit.
“Surely undertaking such costly project would increase our debt liability. But our economy will also grow bigger by the time this project is completed,” the experts said.
After the first unit of the plant is built by 2022 and upon completion of its first year of 1,200MW operation, Rooppur would have to spend mostly for manpower and safety watch. Each unit of the plant would need 1,000 people to run it. The second unit would be built within the next few years.