New procedure for financing state programs defined in Belarus

18 January, Minsk /BELTA/. Belarus has approved the procedure and terms for financing projects included in state programmes by the Development Bank of the Republic of Belarus. This is stipulated by the joint resolution of the Council of Ministers and the National Bank of Belarus dated 17 January 2012 No. 14/1, which was published in the newspaper "Respublika", BELTA correspondent reports.

According to the resolution, the Development Bank will finance state programmes by providing loans in its own name and at its own expense on the terms of urgency, payment, and refundability. The bank must prioritise lending to projects included in state programmes for rural housing construction, the development of the agro-industrial complex, and the creation or development of high-tech industries. It is envisaged to reimburse legal entities for part of the interest on bank loans and (or) for loans provided by banks on preferential terms, and (or) for the placement of funds from the republican and (or) local budgets in deposits. The volumes and directions of lending to state programmes, as well as the sources of funds for these purposes, are determined in the Development Bank's forecast balance in accordance with the annual state programme financing plan, the procedure for which is established by the Council of Ministers.

The Development Bank may provide loans in Belarusian rubles and foreign currency. In this case, lending in foreign currency is carried out for the implementation of currency-earning projects and if there are sufficient foreign currency revenues remaining with the borrower after their mandatory sale to fulfil obligations. Loans will be provided after the borrower opens a bank account with the Development Bank to accumulate part of the revenue, which is to be used exclusively for the repayment of outstanding debt. The borrower is obliged to transfer no more than 10% of revenue to this account. One of the conditions for providing loans is insurance against the risk of non-repayment, or the placement of a guarantee deposit with the bank, or the availability of a guarantee in an amount sufficient for the full repayment of the debt.

The Development Bank may finance projects with the involvement of agent banks or independently. In this case, the risk of losses due to non-performance, untimely or incomplete performance of obligations by the borrower (guarantor, surety, pledger) is borne by the Development Bank. The interest rate for loan usage is established by state programmes. If such information is not available in them, the interest rate is set by the Development Bank.

The issue of lending to investment projects is considered by the Development Bank upon submission of a business plan by the applicant. A decision on lending to an investment project can only be made if it is recognized as economically efficient and financially feasible. The loan repayment period for an investment project shall be established based on the project's payback period and shall not exceed 15 years, unless otherwise provided by state programs. Intermediate repayment (settlement) periods for this loan shall be established based on the planned loan repayment periods provided for in the investment project's business plan, unless otherwise provided by state programs. In this case, the amounts of intermediate repayments shall be secured by appropriate sources in each period of the investment project implementation.

BELTA