MINSK, 18 July (BelTA) – The Government of Belarus will provide loan guarantees to the Export-Import Bank of China that granted an $80.728 million loan to Belarusian Railways. The guarantees will also extend to interest payment and other associated payments. This decision was formalized by Council of Ministers' Resolution No.629 as of 15 July 2013, BelTA learnt from the press service of the Belarusian government.
The document was passed in line with Decree No.252 as of 18 April 2006 (the decree enacted a provision on external government borrowing and loans provided against security of the government) and Decree No.168 as of 21 March 2008 (concerning measures to implement investment projects financed by foreign loans).
Resolution No.629 came in force on the day of its official publication. The document deals with loan resources granted for the period under 12 years to finance the investment project of Belarusian Railways "Electrification of the Gomel-Zhlobin-Osipovichi section and the Zhlobin-Kalinkovichi section. The second phase. The Gomel-Zhlobin section".
The Council of Ministers established that the loan guarantees will be provided after the loan agreement is concluded between Belarusian Railways and the Export- Import Bank of China and after an agreement on the loan utilization and repayment is signed by the Finance Ministry, Ministry of Transport and Communications and Belarusbank.
Belarusbank is authorized by act as an agent bank.
The Ministry of Transport and Communications will act as a surety, i.e. it will assume responsibility for the debt obligation of Belarusian Railways if the company fails to repay the debt, interest payment and associated fees. Acting as a surety the Ministry of Transport and Communications will use the resources of its extra-budgetary centralized investment fund.
Belarusian Railways undertakes to implement the project, repay the debt, interest payment and associated fees.
BelTA informed earlier that during the visit of Belarusian President Alexander Lukashenko to China, the loan agreement was signed with the Export-Import Bank of China to implement the project "Electrification of the Gomel-Zhlobin-Osipovichi section and the Zhlobin-Kalinkovichi section. The second phase. The Gomel-Zhlobin section".
Electrification of some sections and purchase of electric freight single-sectional locomotives is an important Belarusian-Chinese investment project which aims at the complex development of the Belarusian transportation corridor. The investments into the project to electrify the Gomel-Zhlobin-Osipovichi section and the Zhlobin-Kalinkovichi section are estimated at $230.5 million. The Osipovichi-Bobruisk section has already been commissioned and works on the Bobruisk-Zhlobin section will conclude in September. Since April works have been carried out on the Gomel-Zhlobin section. Currently work is underway there to install contact system masts. The overall cost of electrification of that section is about $94.97 million. The Export-Import Bank of China will provide 85% of the required sum.
