Government is liable for the NPP construction loan repayment
The Ministries of Finance and Energy will be responsible for the use of the Russian loan provided for the construction of the nuclear power plant in Belarus.
According to the agreement, the Ministry of Finance will transfer all funds of the loan (USD 10 billion) to a public institution “Construction management of the nuclear power plant”. This amount is intended to cover 90% of the costs of each contract with the Russian Atomstroyexport for the procurement of goods, works and services for the construction of two nuclear power units in Belarus. Moreover, the Ministry of Finances must pay interest, commission fees for servicing letters of credit, repay the loan itself, as well as make other payments connected to the loan from the funds of the national budget allocated for servicing and repayment of foreign debts. In turn, the Ministry of Energy has to ensure the implementation of contracts by the Russian partner, and guarantee the return of payments on the loan to the national budget during the period between April 1, 2021 and December 31, 2035.
Therefore, the country’s external debt will be increased by USD 10 billion, making its servicing even more costly for the budget. Moreover, given the current state of the enterprises of the Energy Ministry, it is not yet clear how the Ministry will pay back its share in interest and loan. Most likely, it will not and the Belarusian nuclear power station will become a Russian nuclear power plant in a distant future.
Over the past year, military-political relations between Minsk and Kyiv have become complicated. Due to their high inertia and peculiarities, this downward trend would be extremely difficult to overcome.
The root cause of the crisis is the absence of a common political agenda in the Belarusian-Ukrainian relations. Minsk is looking for a market for Belarusian exports in Ukraine and offers its services as a negotiation platform for the settlement of the Russo-Ukrainian war, thereby hoping to avoid political issues in the dialogue with Kiev. Meanwhile, Ukraine is hoping for political support from Minsk in the confrontation with Moscow. In addition, Ukraine’s integration with NATO presupposes her common position with the Alliance in relation to Belarus. The NATO leadership regards the Belarusian Armed Forces as an integral part of the Russian military machine in the western strategic front (the Baltic states and Poland). In addition, the ongoing military reform in Ukraine envisages a reduction in the number of generals and the domestic political struggle makes some Ukrainian top military leaders targets in politically motivated attacks.
Hence, the criticism of Belarus coming from Ukrainian military leadership is dictated primarily by internal and external political considerations, as well as by the need to protect the interests of generals, and only then by facts.
For instance, initially, the Ukrainian military leadership made statements about 100,000 Russian servicemen allegedly taking part in the Russo-Belarusian military drill West-2017. Then the exercises were labelled quazi-open and military observers from Ukraine refused to provide their assessment, which caused a negative reaction in Minsk. Further, without citing specific facts, it was stated that Russia was building up its military presence in Belarus.
Apparently, the Belarusian and Ukrainian Defence Ministries have entangled in a confrontational spiral (on the level of rhetoric). Moreover, only a small part of the overly hidden process has been disclosed. That said, third states are very likely to take advantage of the situation (or have already done so). This is not only about Russia.
The Belarusian Defence Ministry officials are restrained in assessing their Ukrainian counterparts. However, such a restraint is not enough. Current military-political relations between Belarus and Ukraine are unlikely to stabilise without the intervention of both presidents.