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Russia, Bangladesh to Discuss $1 Billion Loan to Fund Arms Sales

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Jan. 14 (Bloomberg) -- Bangladesh is seeking a $1 billion loan from Russia to finance arms exports, the Asian country’s Ministry of Foreign Affairs said a day before Prime Minister Sheikh Hasina Wajed meets President Vladimir Putin in Moscow.

The country is targeting a loan deal known as a state export-credit agreement, according to a ministry statement released today. Russia also plans to sign an accord tomorrow to lend Bangladesh $500 million to build a nuclear power station, the Kremlin said in an e-mailed statement today.

Putin, who returned to the presidency last year, has spearheaded Russia’s efforts to expand arms sales in Asia and fend off competition from the U.S. and Europe. Russia, the world’s second-biggest weapons exporter after the U.S., sealed $2.9 billion of arms contracts with India last month during Putin’s visit.

“They want MiG-29 fighter jets, armored personnel carriers and Mi-17 transport helicopters,” Konstantin Makiyenko, a deputy head of the Moscow-based Center for the Analysis of Strategies and Technologies, said by phone today.

Russian defense-industry exports exceeded $14 billion billion last year, higher than the government’s target, with new contracts worth $15 billion signed in 2012, Putin has said.

No arms deals will be signed tomorrow as the two sides first discuss the loan request, Interfax reported, citing an unidentified Russian defense official.

Russia and Bangladesh plan agreements that will allow the countries to move toward a “practical dimension” of their military and nuclear cooperation, the Kremlin said in the statement.

To contact the reporters on this story: Stepan Kravchenko in Moscow at skravchenko@bloomberg.net; Arun Devnath in Dhaka at adevnath@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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