China, Belarus agree $1 billion bank loans, potash memorandum

11 May, 2015

China signed on Sunday a five-year memorandum on Belarussian potash supplies and extended loans totalling $1 billion to Belarussian banks, part of a raft of deals resulting from the visit of President Xi Jinping to Minsk, Moscow and Almaty.
Russia, Belarus's closest ally, has been shifting its economic focus eastwards as ties with the West fray over the Ukraine conflict.
Xi praised Belarus for its foreign policy during the crisis, which saw a cease-fire deal brokered in Minsk in February. "You've actively mediated in resolving the crisis," he said in a briefing after the deals were signed.
One loan, worth $700 million over 15 years, is to Belarus's state-controlled Development Bank with an effective interest rate of no more than 4.7 percent. The second loan went to state-owned Belarusbank.
Belarussian President Alexander Lukashenko said the deals heralded a firm commitment to co-operation between the two countries.
"We agreed that we will actively support each other on issues such as national interests, national security and sovereignty," he said at the briefing.
"There is talk of large joint construction projects and the modernisation of Belarus's infrastructure, (and) new credit lines to create modern production."
The five-year potash supply memorandum that was also signed at the ceremony did not specify volumes or prices.
Cash-strapped Belarus reached an unexpected agreement with China in March over 2015 prices for the crop nutrient potash, undercutting Russian and North American rivals who were negotiating for higher rates.

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