Belarus will receive a Russian loan for the construction of a nuclear power plant

April 22, 2016 18:01

Belarusian authorities say the conditions under the USD 10 billion loan agreement with Russia for the construction of a nuclear power plant are favourable. Therefore Belarus is set to launch the NPP construction, although with a considerable delay.

In the first five years, Belarus is to pay interest at a rate of slightly more than five percent on Russia’s government loan to finance the construction of a nuclear power plant in Belarus. Under the loan agreement, Russia will pay 90% of the cost of a future nuclear power plant. The loan will be given for 10 years, i.e. the period of construction of the plant, with repayment period of 15 years. Therefore the overall term of the loan is 25 years.

Regardless of all delays Belarus will build its own nuclear power plant, although it will not manage to complete the construction by 2017 as it was planned. The economic benefits of the construction of the NPP remain unclear: the loan will be linked to the construction therefore Belarus will not see the real money. Energy generated by the NPP will be expensive and uncompetitive. The potential export of energy to the Baltic countries is vague, while the existing capacities completely satisfy the domestic demand. Country’s external debt will rise substantially while the issue of energy dependence on Russia will not be solved.