Russia ready to make concessions on BeNPP loan

Russia may restructure the loan for the construction of the Belarusian nuclear power plant, Interfax-Zapad reported referring to a source familiar with the draft protocol on amendments to the agreement between the two countries.

The intergovernmental agreement on granting a loan to Belarus for the construction of nuclear power plant, providing for up to $10 billion, was signed on November 25, 2011. The funds were allocated to finance 90% of the plant construction cost.

On April 1, 2020, $4.33 billion of the loan was used. According to Rosatom, the projected cost of the NPP construction project will not exceed $ 6 billion, the source said.

According to it, Moscow has prepared and previously agreed with Minsk amendments to the agreement.

The document provides for the extension of the loan period for 2 years — until the end of 2022, the replacement of the current “mixed” interest rate on the loan by a fixed one at 3.3% per annum, as well as postponing the start date of repayment of main debt on the loan from April 1, 2021 to April 1, 2023.

The overall financial effect of the debt restructuring for Belarus should be comparable with the forgiveness of the country’s obligations in the amount of about $600 million.

Earlier, the Belarusian side has repeatedly initiated the reduction of the loan rate for the BelNPP construction.

Thus, in February, the head of Belarus noted that the Russians were to launch the first unit of the NPP in 2018, while in 2019 — the second one, “but they missed the deadlines, with huge penalties to follow”.

Lukashenka stressed that Vladimir Putin had said in Sochi that the Russian state budget was not ready for such payments. The Belarusian ruler suggested reducing the interest on the loan to the level of Russia’s construction projects in Hungary and Vietnam (about 3%).

“We’re not going to impose sanctions, and that will counterbalance it. Since you have broken the deadline, we will start paying the loan back in five years instead of two. Does it make sense? That makes sense. It’s uncomfortable, but we decided that we will find a solution here: there is no other way. Either we impose sanctions for delay (and there is a lot of money there), or they move on the loan,” said Lukashenka.