Belarus-China Projects Financing

On May 10, 2015 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 at the expense of the Chinese credit facility are:

  1. long-term loan - up to 15 years (including a grace period - up to 5 years, the period of the principal debt repayment - up to 10 years);
  2. no guarantee of the Government of the Republic of Belarus for each loan provided by means of the credit  facilities is required;
  3. 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 share in the investment project or the package of investment projects shall be at least 50% of the total cost of the project or the package of projects (to be defined by the CDB per each project or a package of projects on a case by case basis). 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, services) shall be concluded between the Belarusian business entity and the Chinese company acceptable to the CDB;
  4. amount of the project shall be not less than USD 1,0 million;
  5. advance payment – not less than 15% of the investment project value.

Terms of the investment projects  financing by the Development Bank:

  1. loan currency – US Dollars;
  2. borrowers- legal entities of the Republic of Belarus including small and medium-sized enterprises;
  3. amount of the loan provided by the Development Bank  shall not exceed  85% of the  capital investment  on the relevant project VAT inclusive;
  4. term of the loan – shall be established based on the project payback period and shall not exceed 15 years (including a grace period - up to 5 years, the period of the principal debt repayment - up to 10 years);
  5. the interest rate is  a floating rate consisting  equal to Libor 6 m. increased by 5.5.p.p.;
  6. payment of interest - monthly starting from the month following the month of the loan granting;
  7. 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;
  8. 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 Chinese bank. 

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:

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

Inga Tarnovskaya
Chief Specialist of the Department of Client Management
Tel.: +375 (17) 309 68 01, +375 (17) 309 68 89, E-mail: tarnovskaya.i@brrb.by

Representatives of the Department of Client Management in Branches:

+375 (162) 53 76 35 (Brest); +375 (212) 35 96 20 (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)