ARMS DEAL

Russia will issue a $1 billion loan to Bangladesh for purchases of Russian-made arms and military equipment, according to a deal reached on Tuesday.

The details of the deal are unknown, but Russian military analyst Igor Korotchenko said the South Asian state is likely to buy about 80 to 100 Russian-made BTR-80 amphibious armored personnel carriers (APCs) and some missile defense systems.

“Also, taking into account that Bangladesh air forces…currently operate Mikoyan MiG-29 fourth-generation fighter jets, a contract to repair and modernize the previously acquired aircraft is likely to be signed, as well as a possible deal to buy fighter jets of the modernized MiG-29SMT configuration,” Korotchenko said, adding that the purchase of the Mi-171 military helicopters is also possible.

China remains Bangladesh’s largest weapons supplier, accounting for more than half of the country’s arms purchases.

NUCLEAR ENERGY

Russia will also allocate a $500 million loan to Bangladesh to build the country’s first nuclear power plant (NPP). The NPP is to be built near the town of Roopur in northwestern Bangladesh. The project envisages the construction of two power units, each with a capacity of 1,000 mW.

The loan will finance the initial stages of the project, with at least $1.5 billion required to finish construction. Further costs will be partially financed through Bangladesh’s own funds and partially through another loan from Moscow. The costs, however, are likely to be lower than average prices on the international market due to what Russia’s top nuclear official Sergei Kiriyenko described as “competitive advantages.”

Both Putin and the head of Russia’s state nuclear corporation Rosatom said the project’s design will be based on “up-to-date technologies,” and takes into account the recent reactor meltdown at the Fukushima NPP in Japan. The NPP will be able to withstand a powerful seismological event.

The blocks will include dual containment of the reactor, a passive heat removal system and hydrogen recombiners.

According to an intergovernmental agreement on the NPP construction signed on November 2, 2012, Russia will supply nuclear fuel for the NPP in Bangladesh for the entire period of its exploitation. In addition, experts from Bangladesh could intern and train in Russia.

Preparatory works at the designated site will begin on January 1, 2014, while the construction itself will start in 2015 and is to take about five years. The station is scheduled to be launched no earlier than 2020.

GAS DEAL

Gazprom International, a subsidiary of Russia’s gas giant Gazprom and Banagladesh’s oil and gas corporation PetroBangla, have signed an agreement to drill ten gas wells at six gas deposit sites in the country. The agreement will increase Bangladesh’s gas production to 56 million cubic meters per day.

The depth of the wells ranges between 2,900 and 4,050 meters. The project will take 20 months to complete.

Gazprom International said it had already started preparations for the project, and the drilling at two gas fields is due to begin within the next few weeks.

The value of the deal was not officially disclosed, but the Associated Press estimated it at about $193 million.

Bangladesh has proven gas reserves of about 360 billion cubic meters. No gas exploration works have been carried out in the past ten years. Annual gas extraction stands at 20 billion cubic meters and serves domestic needs only.

OTHER AGREEMENTS

An array of agreements was signed between the ministries of the two states, including memorandums of understanding on law-enforcement and the fight against terrorism.