Western sanctions cast cloud over Russia-backed Bangladesh nuclear power plant

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Analysts believe that global sanctions, particularly Russia being cut off from the international financial system, could harm the project, directly and indirectly. Even if sanctions bite the project, they said, there should be other ways to move the work forward.

Foreign Minister Masud Bin Momen isn’t too worried because the sanctions have yet to directly target the Russian atomic energy company Rosatom.

Rosatom, which is implementing the project, says it sees no disruption to project commitments and work schedules.

Bangladesh signed a $12.65 billion credit agreement with Russia in 2015 for the construction of two units of the Rooppur plant in Pabna’s Iswardi.

Nearly 25,000 local and foreign workers, engineers and experts work on the 62,000 acre site. The government expects experimental power supply to the national grid from the first 1200 MW unit at the Rooppur nuclear power station to start next year.

But Russia attacked Ukraine last week citing security concerns, hitting it with unprecedented financial sanctions from the United States, European Union, United Kingdom and their allies. Both sides have closed their airspace to each other.

Russian state development bank Vnesheconombank, or VEB, has been targeted by US sanctions. VEB is involved in the financing of the Rooppur plant, so the harsh economic measures may directly harm transactions for the project.

“If the bank has to pay Russian suppliers for us and we get the services and the machinery, and the machinery arrives properly, it might not affect Rooppur much,” said economist Zahid Hussain.

“But if financial transactions [between Bangladesh and Russia] must be done, we will not be able to do it in US dollars, euros, pounds or yen. If it is done in ruble (Russian currency), what will we do? No one but Russia will accept the rouble,” he said.

He thinks that Russia will encounter problems in producing and transporting the necessary equipment. “The sanctions cripple the Russian economy. There will be problems if they cannot manufacture the necessary equipment at the factory. And even if they manufacture the equipment, there will be sanctions on transit routes, shipping.

Former World Bank chief economist at his office in Dhaka, Zahid, pointed out that Russia would not be able to buy many high-tech products from the United States and Europe.

Policy Research Institute executive director Ahsan H Mansur thinks large-scale economic sanctions will “certainly” disrupt Rooppur and Bangladesh’s trade.

“We will have to see if the organizations that support us have been affected by the sanctions,” he said.

Told that VEB is on the US sanctions list, the former IMF official said: “So no one will be able to take the money [from Russia].”

Both Zahid and Mansur suggested that the government undertake diplomatic efforts to resolve any issues surrounding Rooppur.

The government may approach the US and EU to partially lift sanctions for the one project.

Ishwardi’s Rooppur has turned into a “mini-Russia” in recent years. From shopping centers to small stalls, all signs are now written in Russian alongside Bengali and English. Photo: Habib Imran

Zahid advised the Ministry of Finance, Ministry of Commerce and Ministry of Foreign Affairs to sit down and do their “homework” on the matter.

WHAT THE GOVERNMENT AND ROSATOM SAY

Although the Rooppur nuclear power plant project is being implemented under the Ministry of Science and Technology, it is up to the Ministry of Foreign Affairs to have an idea of ​​the current situation.

Secretary Momen said the full impact of the sanctions is not yet clear. “But if financial transactions have to be routed to New York, there will surely be an impact. We still believe the sanctions will not directly affect Rooppur.

“Rooppur plays a big role in Rooppur. If Rosatom faces sanctions, then it will be troubling for us. We are trying to determine what kind of direct or indirect impacts we will experience.

In an email response to the comments, Rosatom told bdnews24.com: “There is no disruption in any of the commitments and work schedules in the construction of the Rooppur nuclear power plant.”

Just as the people of Rooppur embraced the Russian language and culture, the Russians also immersed themselves in the Bengali culture, fostering brotherly relations between the two groups. Photo: Reazul Bashar

Science and Technology Secretary Ziaul Ahsan told Deutsche Welle Bangla that they do not foresee a crisis hitting the construction of the plant.

The project has 6,000 citizens from Russia, Ukraine and Kazakhstan working on it. The others are Bangladeshis. Russian authorities are paying them and he can arrange an alternative method of paying salaries and expenses, Ziaul said.

Ruhul Quddus, project manager at the site, said 70% of work in many sections of the plant was complete. And work on Russian credit is almost complete, so he sees no problem with Russian banks being excluded from the SWIFT international payment system.

Former Bangladesh Bank Governor Salehuddin Ahmed said there are other ways countries like Myanmar and North Korea are following despite harsh sanctions.

“Russia can continue transactions directly through its neighbors or allies, or use another currency,” he said.


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