Belarusbank has signed a US$30mn loan agreement with the Export-Import Bank of China (China Exim) to assist in the final stages of the construction of a pulp and paper production plant.

Sergei Pisarik, chairman of the board of Belarusbank, says the Svetlogorsk pulp and paper mill investment project “is currently one of the largest in Belarus” and will cost in excess of US$900mn.

Belarus government documents show that the state struck a loan deal with China Exim, worth US$654.16mn, back in 2012 to assist in the build of the factory which will manufacture 400,000 tonnes of sulphated bleached pulp.

Belarusbank was then chosen to service the consumer loan and, as part of the loan agreement, the government provided guarantees that the loan would be repaid. The Ministry of Finance agreed that the interest rate payments of the loan will be covered by central state budgets up to 2020.

GTR understands that the loan repayments are to come to a close on January 1, 2023.

Loan funds in the bilateral agreement are to be used to purchase the relevant equipment from China CAMC Engineering (CAMCE) to construct the sulphate bleached and rayon pulp production plant.

The signing took place on September 26 in Minsk and Sun Ping, vice-president of China Exim, said at the ceremony: “With the development of economic and trade relations, more and more Chinese companies come to Belarus to implement investment projects. By giving them support Belarusbank contributes to the development of co-operation between our countries.”

This latest loan agreement is just one of several bilateral projects that have been initiated between the two countries in recent years, with institutions having inked two previous projects totalling US$114.6mn since a co-operation agreement was signed in 2008.

Belarusbank settlements in renminbi (Rmb) have surged over the last few years and in 2014 to date they have amounted to Rmb217mn.