Belarus eager to sign agreement on $500m loan for nuclear station in January-February

Belarus intends to sign the agreement on a $500 million loan for the Belarusian nuclear power plant by late January or early February 2014. The information was released by Belarusian First Deputy Finance Minister Vladimir Amarin at the online conference hosted by the BelTA website on 26 December.

On 19 December the Supervisory Board of the Russian bank Vnesheconombank (VEB) decided in favor of opening a credit line of up to $500 million for the Belarus government. The money will be available for a period of up to eight years and can be used to finance some of the advance payments needed as part of the project to build the Belarusian nuclear power plant. The official noted: “We’ve been working on this loan for a long time. The decision has been made. Experts are now busy working on terms of the credit agreement and the document overall. The work takes time, therefore, realistically speaking we will be able to get the loan processed and start spending the money by late January – early February”.

Comparing this loan with the Russian state export loan of up to $10 billion, which is used to finance the construction of the Belarusian nuclear power plant, the representative of the Belarusian Finance Ministry pointed out that terms offered as part of state export loans are more comfortable, as a rule. “Terms of the new loan are somewhat different but they are comfortable for us, too,” said Vladimir Amarin. He pointed out that in the past the Belarusian side made the advance payments when they were needed in 2013. Over $100 million was spent like that.

The VEB management approved a $500 million loan for the Belarusian nuclear power plant back in December 2012. But in line with the previously announced plans Russian Vnesheconombank was supposed to contribute $460 million to the loan while Eximbank of Russia (which is part of VEB Group) was meant to provide $40 million. Now it has been decided that Vnesheconombank will provide the sum in its entirety.

Belarus and Russia signed the general contract to build the Belarusian nuclear power plant in July 2012. The cost of building the installation is primarily covered by a state export loan granted by Russia. In line with the relevant intergovernmental agreement the loan can provide up to $10 billion for 25 years to cover 90% of the cost of every contract between the Russian company ZAO Atomstroyexport and the Belarusian state institution Directorate for Nuclear Power Plant Construction. Russia’s Vnesheconombank and Belarus’ BelVEB Bank are the agent banks in charge of servicing the loan. The Belarusian Finance Ministry requested Vnesheconombank to lend up to $500 million to finance the advance payments as part of the general contract.

The Belarusian nuclear power plant will have two power-generating units with the total capacity of up to 2,400MW (1,200MW each). It will be built using the Russian design AES-2006, which is compliant with international norms and IAEA recommendations. The merged company OAO NIAEP – Atomstroyexport (ASE) is the general designer and general contractor of the project.