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.
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.
Last week, Belarusian Foreign Minister Makei participated in the foreign ministers’ meeting of the Eastern Partnership and Visegrad Group initiative hosted by Warsaw. The Belarusian FM emphasized Belarus' interest in cooperation in the transport sector, which could be due to Belarus’ desire to export electricity surplus after Belarus finished construction of the nuclear power plant in Ostrovets. Minsk expressed concerns about Warsaw’s stance on the Belarusian NPP, as it refused to buy electricity from Belarus and supported Vilnius’ protest on this issue. Following accusations by the Belarusian leadership and the state media against western states, including Poland, of training "nationalist militants", Minsk did not agree on the visit of the European Parliament deputies from Lithuania and Germany to Belarus and to the NPP construction site near Ostrovets in particular. In addition, the Belarusian authorities have stepped up efforts to enforce education in Russian in Polish-language schools in Grodno and Vaukavysk. Should a rift in Belarusian-Polish relations persist, the Belarusian authorities are likely to step up the pressure on the Polish-speaking minority in Belarus.