Export-Import Bank of China agreed on Tuesday to provide over $1 billion in loans to finance joint projects in Belarus, which is in the midst of a financial crisis.
China’s Eximbank will allocate a $654 million loan to build a bleached sulfate plant together with Industrial and Commercial Bank of China, $340 million to modernize a highway linking the capital Minsk and Belarus’ second largest city of Gomel and $64 million to electrify some railroads.
Eximbank head Li Ruogu said his bank and Minsk were in talks to provide another $400 million to build a second runway at Minsk national airport, while Belarus Prime Minister Mikhail Myasnikovich said his country was ready to jointly build an industrial park.
The Belarusian ruble has come under severe pressure in the first five months of the year from a large trade deficit, generous wage increases and loans granted by the government ahead of the December 2010 presidential elections, which spurred strong demand for foreign currency.
In spring, the country’s authorities devaluated the national currency by 36 percent, froze prices on some staple foods and introduced fuel rationing to keep the lid on the deepening crisis.
The Belarusian government has applied for loans from Russia and EurAsEC, a post-Soviet economic bloc. Russia said it would support loan disbursement to Belarus via EurAsEC, which approved a $3 billion bailout.
The Belarusian authorities also said the country intended to raise up to $8 billion from the International Monetary Fund to stabilize its finances.