Belarus-China Projects Financing

The Development Bank and China Development Bank (CDB) signed a general loan agreement on opening a credit facility to the Bank in the amount of USD 700 million with the purpose to finance the Belarus-China investment projects.

The main advantages of the project financing from the funds of Chinese credit facility are:

  1. the loans are granted for long periods ;
  2. the grace period  for the principal debt payment  is granted until the facility is put into operation (the project capacities are reached)
  3. no guarantee of the Government of the Republic of Belarus for each loan provided by means of the credit  facilities is required;
  4. no  insurance coverage of the export credit insurance agency SINOSURE is required which reduces the cost of credit resources for the ultimate borrower.

Requirements to Investment Projects:

  1. priority sectors for financing  are transport, energy, industry, infrastructure, projects of small and medium-sized enterprises as well as the projects implemented by residents of China-Belarus industrial park;
  2. the Chinese party’s share in the investment project  financing shall be at least 50% of the total cost of the project. In case of a “turnkey” project construction performed by the Chinese general contractor, the CDB shall be more flexible in their approach of defining the Chinese share in the cost of the investment project;
  3. foreign trade contract for the supply of equipment (performance of works, rendering of services) shall be concluded between the Belarusian business entity and the Chinese company acceptable to the CDB;

Terms of the investment projects  financing by the Development Bank:

  1. borrowers are  legal entities of the Republic of Belarus including small and medium-sized enterprises;
  2. loan currency  is US Dollars;
  3. the loan amount makes not less than USD 1.0 million
  4. amount of the loan provided by the Development Bank  shall not exceed  85% of the  capital investment  on the relevant project VAT inclusive;
  5. the share of the borrower’s financing with its own funds makes at least 15% of the amount  of capital investment  on the relevant project VAT inclusive;
  6. term of the loan shall be established based on the project payback period (not later than March 2032);
  7. the grace period for the principal amount payment shall be until the facility is put into operation (the project capacity is reached) (not later than March 2022)
  8. the interest rate is  a floating rate   equal to Libor 6 m increased by 5.5.p.p.;
  9. interest shall be paid monthly starting from the month following the month of the loan granting;
  10.  the commission of a foreign bank to be reimbursed by the borrower:  commitment fee of 0.4% per annum of the amount of undrawn loan;  Management fee as a onetime payment of 0.8% of the loan amount;
  11.  fulfillment of obligations under the loan agreements can be secured  by a pledge of movable and immovable property, suretyship, guarantee, insurance by the Bank of a default risk, guarantee monetary deposit,  transfer to the Bank of the title to property including property rights, other  means provided by the legislation of the Republic of Belarus.

The above terms of financing can be specified by the Bank as far as the parameters of each separate investment project are approved by the CDB. 

The decision on financing  an investment project  is taken by the Development Bank in case the project is  deemed economically  feasible and  financially realizable as well as currency gaining and (or) if the applicant  has foreign currency and (or) Belarusian rubles  proceeds in the amount  sufficient for the borrower’s obligations to the Bank to be fulfilled. 

The applicant is to submit a set of documents in line with the Bank’s local regulatory legal acts for the Bank’s authorized bodies to consider the possibility of loan granting.

In case you are interested in financing on the above mentioned terms and if any additional information is required please contact the Department of Client Management of the Development Bank.

Contacts:

Alesia Yakimush
Head of the Department of Client Management
Tel.: +375 (17) 309 68 01, +375 (17) 309 68 89, mob.: +375 (29) 603 38 94
E-mail: yakimush.a@brrb.by

Representatives of the Department of Client Management in Branches:
+375 (162) 53 76 35 (Brest); +375 (212) 64 65 41(Vitebsk); 
+375 (232) 26 33 49 (Gomel); +375 (152) 75 43 39 (Grodno); 
+375 (17) 309 68 65, +375 (17) 309 68 67 (Minsk); 
+375 (222) 25 88 99 (Mogilev).