Rooppur in the western tip of Bangladesh might seem an unlikely place for a Little Russia. A few kilometers down the road from Bengal lies the road where Rosatom, Russia’s state nuclear giant, is building the first nuclear power plant in Bangladesh. With an estimated cost of around $12 billion, it is one of the biggest infrastructure projects ever undertaken in the country of around 170 million people.
With the goal of bringing the country’s share of electricity generated by nuclear energy from zero to 10% in less than 10 years, Rosatom is doing a great job. Bangladesh’s government says the 2,400 MW plant, expected to begin testing this year, will address power shortages and outages that have crippled Bangladesh’s otherwise fast-growing economy, including its garment export sector.
But for Moscow, the project serves another purpose: to bind the two countries together for decades and extend the Kremlin’s influence in Bangladesh, as it has done with other nations that lack their own nuclear capability.
Throughout Vladimir Putin’s more than two-decade rule, natural gas and oil were his most important geopolitical bargaining tools until the invasion of Ukraine changed the landscape. The EU’s disengagement from Russian energy, combined with the Nord Stream pipeline explosions, have deprived the Kremlin of its most important export market.
But sanctions have so far not hampered the nuclear energy sector, which can forge long-term political ties and disrupt Western efforts to isolate Putin’s regime. Before the invasion of Ukraine, Russia already accounted for about half of all international agreements to build nuclear power plants, supply reactors and fuel, decommission or manage waste.
Its main nuclear competitors — China, France, Japan, South Korea and the US — accounted for about 40% of the total. Despite the sanctions on its economy, Russia is still an unrivaled builder of nuclear power plants. It is involved in more than a third of the new reactors being built around the world right now, including in China, India, Iran, Turkey and Egypt.
The actions of the West
Wary of Russia’s dominant position in the global nuclear supply chain, Western governments are scrambling to counter it. Last month US President Joe Biden signed a bill banning imports of Russian enriched uranium, which makes up about 25% of the total US supply.
This followed a move last year by the US, UK, Japan, Canada and France to form the ‘Sapporo 5’ nuclear alliance on the sidelines of the G7, which then-British energy secretary Grant Shapps said was aimed “to push Putin out of the nuclear fuel market entirely.”
The relationships that Russia is building through nuclear projects go beyond even long-standing contracts for the supply of natural gas by pipeline. Nuclear plants take about 10 years to build, with a reactor life of 60 years for newer plants. Preparations for dismantling, including the removal of radioactive parts, take another 10-20 years and require significant funds.
This is a very big commitment for a country to have a Russian presence. It’s not just the actual construction. It’s the whole ecosystem. In Turkey, Russia is building the country’s first nuclear power plant, a 4,800 MW facility in Akkuyu, which is expected to start generating electricity this year.
Russia often uses a build-on operate model, which involves an even higher degree of cooperation, as Rosatom provides everything, including plant personnel, for the life of the project. The Russian side treats the factories as if they were owned by Rosatom. The host country’s only role is to buy electricity from the reactor.
Right here lies Bangladesh, which will be connected to Russia by the Rooppur project for decades. This is an endless relationship they enter into.
Nuclear diplomacy
The invasion of Ukraine forced Russia to reconsider its approach to nuclear diplomacy. Shortly after the start of the war, Rosatom lost one of its contracts in Europe: the 1,200 MW Hanhikivi power plant in Finland, which was due to start construction in 2023.
Forced to forge new alliances, Putin — who is visiting North Korea and Vietnam this week — is increasingly positioning his government as a partner in the “global south,” a term that includes colonized countries in Africa, Asia and the Latin America.
Mirroring Soviet-style rhetoric, Putin often points out that many of these nations have not condemned his invasion and actually resent the “colonial approach” of the US, the EU and their “imperial” allies.
“The globalization model, which was largely shaped by Western states” … is in a state of deep crisis, Putin told a foreign policy conference in Moscow last year. “A new, fairer and more democratic system is emerging.”
Rosatom has been a key part of Moscow’s efforts to court the global south. The company has signed dozens of memoranda of understanding with African and Latin American countries, such as Zimbabwe, Mali, Burkina Faso and Brazil. In Ghana, Russia has begun preparing a bid to build the country’s first nuclear power plant, along with vendors from the US, China, India, South Korea and France.
This year, Russia and Uzbekistan signed an agreement to build a small modular reactor with a capacity of 330 MW. The project is the first for Rosatom and Russia to introduce next-generation nuclear technologies outside the country. Proponents claim that SMRs offer greater security and efficiency compared to existing technologies, with prominent private investors such as Bill Gates and OpenAI CEO Sam Altman backing startups developing (Small Modular Reactors) SMRs.
But unlike Russia and China, the US has yet to develop or build one. In addition to building reactors and supplying modules, Rosatom also uses soft diplomacy to exert influence.
In 2023, it began discussions with Nicaragua, Uzbekistan and Tajikistan on the creation of medical centers, according to Rosatom’s annual report. In Bolivia, Russia completed a nuclear research center in 2023 and, a few months later, secured a lucrative lithium mining contract.
The world is divided
Even in Europe, Russia is not completely isolated. Hungary’s 2,400 MW Paks plant, awarded to Rosatom without a tender in 2014, has not been affected by the invasion of Ukraine. It is expected to be delivered in the early 2030s, with a trained workforce and the first cargo of enriched uranium delivered.
Hungary is one of the countries most dependent on Rosatom, the assessment of which is based on services purchased, financing arrangements and the share of total electricity from units manufactured by Rosatom. Nuclear power from an existing plant, which was built to Soviet designs, currently accounts for 40% of Hungary’s electricity.
Prime Minister Viktor Orbán, who is often criticized by other EU countries for his pro-Moscow stance, has repeatedly said Budapest will not agree to any sanctions against Russian nuclear energy.
This is a prime example of how Russian nuclear diplomacy works and why it is dangerous.
Competition
Bangladesh, which lies between India and Myanmar on the Bay of Bengal, is the target of intense geopolitical competition between powers such as India, China and the US. The three countries have used agreements and investment offers to build ties with Prime Minister Sheikh Hasina.
But the Rooppur project gave Moscow an invaluable foothold. While China and the US both have nuclear manufacturing capacity, China’s state-owned National Nuclear Corporation is largely busy leading the country’s aggressive domestic nuclear expansion, and the US-based Westinghouse Electric Company cannot match the terms offered by Rosatom.
State-owned Rosatom is able to offer up to 90% financing for nuclear projects, with repayments spread over decades at minimal interest rates. More attractive financing helped Rosatom win the deal, recalls Mohammad Tamim, a former energy consultant in Bangladesh. Such favorable terms are “crucial for poorer countries with poor creditworthiness, which cannot secure such financing elsewhere.
For Rooppur, Russia’s Vnesheconombank – a state-owned entity used as a special purpose vehicle to support priority projects from Moscow – provided a US$11.38 billion loan, which covers almost the entire cost of the project. The loan has a grace period of 10 years and the interest rate is variable but cannot exceed 4% per annum. But even the cheap loans have to be repaid, and that could become a problem for buyers of the reactors — and another lever of pressure for Russia.
The debt repayment for the Rooppur plant, part of a growing bill for infrastructure projects financed in foreign currency, will add to the already acute pressure on Bangladesh’s foreign exchange reserves. It is possible to pay back if it operates at full scale and revenue is generated. But it is not going to create foreign currency. This project is for local electricity consumption.
Although the loan repayment period has not yet arrived, according to the terms of the agreement between the countries, Bangladesh must pay 10% of Rosatom’s construction work in dollars as advances. But its efforts to repay have been complicated by restrictions on dollar payments stemming from US sanctions, officials and analysts said.
Weakness of Western companies
Procuring financing for nuclear projects is one of the biggest challenges for Western companies. Many of the Western development banks with the firepower for nuclear megaprojects, such as the World Bank or the Asian Development Bank, specifically block nuclear financing because of opposition from key shareholders, including Germany.
There are moves in the US to pressure the bank’s shareholders to reconsider their position on concerns that Russia and China will dominate global industry, but it has been more than 60 years since the bank last approved project financing nuclear energy. For Rosatom, foreign projects — including building nuclear power plants, exporting enriched uranium and other initiatives — account for about half of its total revenue, according to annual reports.
In 2023, Rosatom earned $16.2 billion from these projects, up from $11.8 billion in 2022. That revenue has more than doubled over the past decade. However, operating expenses and contributions to the state eat up most of Rosatom’s profits, bringing the group’s net profit to $2-3 million a year. By 2030, Rosatom’s total revenue is expected to reach $56 billion, more than double the current level, according to the company’s growth strategy.
This growth will be mainly driven by foreign projects. Rosatom believes it can capture a significant chunk of the African market, seeing it as a “growth point” for nuclear technology.
Besides entrenching itself in the Kremlin’s sphere of influence, Bangladeshi civil society fears that the deal with Rosatom has created opportunities for bribery. The entire energy sector is shrouded in secrecy.
At the end of the day, what will the people of Bangladesh really pay? If it was open and healthy competition, it would be a different kind of story. Calculated based on the estimated cost of building the plant, the price for Rooppur is 9.36 cents per kilowatt-hour, compared to 5.34 cents for the same amount of power from a neighboring Indian project, according to Rashed al-Mahmud Titumir, economist at Dhaka University.
Critics say Bangladesh would be better off spending the money on domestically produced solar and wind power, the cost of which has plummeted in recent years, rather than relying on Russia for expensive and potentially dangerous nuclear power.
It is critical for the US and its allies to rebuild a stable nuclear supply chain and restore leadership in the global nuclear sector. But it could take a decade for that to happen, he adds.
There is no choice. If the West does not act on this, it will not control the debate around security assurance, non-proliferation, security and standards that would spread around the world.
Rosatom is already discussing building a second plant in Bangladesh. And this proves that Russia is a “necessary partner” for the country.
