Article Posted on : - Jan 16, 2013

MOSCOW (PTI): Bangladesh has inked its biggest arms contract worth USD 1 billion with Russia, which also announced a USD 500 million loan to Dhaka for the construction of the country's first nuclear power plant.

The two major deals were announced after Russian President Vladmir Putin Tuesday met with visiting Bangladeshi Prime Minister Sheikh Hasina for talks.

"Russia will issue a loan to Bangladesh worth one billion US dollars that will be used to buy Russian weapons and military hardware," Putin told journalists after the talks.

"Cooperation in defence was another area for collaboration between Dhaka and Moscow," Hasina was quoted by the Bangladeshi BSS news agency as saying at the joint press briefing after the talks.

"Our countries intend to broaden military-technical cooperation," Putin said, without specifying what weapons or military equipment Bangladesh would buy from Russia, the world's second-largest weapons exporter.

However, media reports in Bangladesh, said fighter jets, helicopters, armoured vehicles, anti-tank missiles, automatic grenade launchers and radar equipment would be included in the package of the procurement deal.

In addition to the arms contract, Russia will also grant a loan worth USD 500 million to Bangladesh for the construction of a nuclear power plant in northwestern Ruppur.

"We will not only provide the most up-to-date technology...but also provide financial support for the construction of the nuclear power plant at the initial stage," Putin said.

The head of Russian state nuclear corporation Rosatom, Sergei Kiriyenko, said technical and environmental assessments would be carried out this year for the plant, which is to have two 1,000-megawatt reactors and will be completed in the early 2020s.

Energy-starved Bangladesh signed an initial deal with Russian state-owned nuclear agency Rosatom in November, 2011, to build a nuclear plant with two 1,000 megawatt reactors at a cost of upto USD 2 billion each against the backdrop of its dwindling reserve of natural gas.

The two sides inked 11 agreements, Itar-Tass reported.

Hasina told the briefing that her government wanted to deepen engagements with Moscow for mutual benefits and gains since it assumed office in January, 2009.

Over the last four years, Hasina said, "we made good progress in certain key areas, including cooperation in nuclear and conventional energy".

"They are our friend of bad times (1971) and by this visit we renew our friendship, and a new door of prospect has opened by this visit," Hasina said.

Dhaka-based Institute of Peace and Security Studies (BIPSS) chief retired major general A N M Muniruzzaman said this was the biggest ever single defence deal Bangladesh ever signed with a foreign nation since its 1971 independence.

"This also appears to be a diplomatic shift as Russia is not a traditional source of weapons...unlike China while the western countries are the source of its relatively sophisticated defence hardware," Muniruzzaman told PTI.

Defence analysts, however, said that the previous 1996-2001 tenure of Hasina's ruling Awami League witnessed the procurement of 10 MiG 21s from Russia under a deal, while Moscow initially helped Bangladesh to build its defence structure with helicopters after 1971 independence, after it had extended its crucial support during the Liberation War along with India.

"We will also give training to the highly qualified military staffs," Putin said, adding that Bangladesh and Russia have also agreed to join hands in the fight against terrorism in the South Asian region.

Russia's gas giant Gazprom and Bangladeshi Petrobangla Corporation will also team up for a joint project, Putin said.

The project envisages a drilling of ten gas wells in Bangladesh. According to the Russian president, the project will make it possible to raise gas production in Bangladesh to 56 million cubic metres a day.

Hasina is on a three-day visit to Russia that ends Wednesday. This is the first official visit of a Bangladesh Prime Minister to Moscow since Sheikh Mujibur Rahman's visit of the erstwhile Soviet Union in April, 1972, immediately after Bangladesh became independent.