Updated at 16:11,02-12-2016

Belzneshekanambank issues first letter of credit to Russian contractor in nuclear power plant project

Belzneshekanambank (Bank BelVEB) has issued the first letter of credit to Russia's AtomStroyExport, the prime contractor in Belarus' nuclear power plant project.

The bank has issued the $184-million letter of credit at the request of the Nuclear Power Plant Construction Directorate to pay for survey and design work and preliminary paperwork, according to the Bank BelVEB press office.

The payments will be made with the help of an export loan for the construction of the nuclear power plant to be provided by the Russian government under a November 2011 interstate agreement.

The Russian loan will be distributed and serviced by Russia's Vneshekonombank together with Bank BelVEB, in which it holds 97.5 percent.

Pavel Kalaur, chairman of the Management Board of Bank BelVEB, told reporters on August 7 that a deal whereby Vnesheconombank Group would grant a $500-million loan to Belarus to finance its nuclear power plant project would be complete in September or October.

"Now the deal is at the stage of settling technical issues," Mr. Kalaur said, adding that this process would take two or three months.

An agreement for Vnesheconombank Group to issue such a loan was reached this past spring. The loan will be used for making advance payments for the construction of the nuclear power plant.

Under the November 25, 2011 interstate agreement, Russia is to provide Belarus with up to $10 billion to cover 90 percent of the costs of the construction of the nuclear power plant.
Belarus is to start repaying the loan six months after the nuclear plant begins operation but no later than April 1, 2011. The loan is to be used between 2011 and 2020 and repaid within 15 years in 30 equal installments.

If any overdue bill is not paid within 180 days, Russia may require of Belarus the immediate repayment of the full amount of unpaid debt on the loan.

The nuclear power plant will be situated in the Astravets district, Hrodna region, some 10 miles from the Lithuanian border. Its two reactors are to have a generating capacity of up to 2,400 megawatts in total. The first unit of the plant is scheduled to be put into operation in 2017 and the other one in 2018.