Government is liable for the NPP construction loan repayment

The Ministries of Finance and Energy will be responsible for the use of the Russian loan provided for the construction of the nuclear power plant in Belarus.

Comment

According to the agreement, the Ministry of Finance will transfer all funds of the loan (USD 10 billion) to a public institution “Construction management of the nuclear power plant”. This amount is intended to cover 90% of the costs of each contract with the Russian Atomstroyexport for the procurement of goods, works and services for the construction of two nuclear power units in Belarus. Moreover, the Ministry of Finances must pay interest, commission fees for servicing letters of credit, repay the loan itself, as well as make other payments connected to the loan from the funds of the national budget allocated for servicing and repayment of foreign debts. In turn, the Ministry of Energy has to ensure the implementation of contracts by the Russian partner, and guarantee the return of payments on the loan to the national budget during the period between April 1, 2021 and December 31, 2035.

Therefore, the country’s external debt will be increased by USD 10 billion, making its servicing even more costly for the budget. Moreover, given the current state of the enterprises of the Energy Ministry, it is not yet clear how the Ministry will pay back its share in interest and loan. Most likely, it will not and the Belarusian nuclear power station will become a Russian nuclear power plant in a distant future.