MINSK (Reuters) – China signed on Sunday a five-year memorandum on Belarussian potash supplies and extended loans totaling $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 ceasefire 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 commitment to cooperation 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 modernization of Belarus’s infrastructure, (and) new credit lines to create modern production.”
A potash supply memorandum, also signed after the bilateral meetings, agreed shipments of 4 million tonnes over five years and was worth around $1.3 billion based on current prices, Belarussian Potash Company said in a statement.
“The concrete price level will be the subject of further negotiation,” it said.
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.
The former Soviet republic’s economy has been battered by currency volatility in Russia arising from the Ukraine crisis and a plunge in the oil price. The International Monetary Fund forecasts the economy shrinking 2 percent this year.
(Reporting by Andrei Makhovsky; Writing by Alessandra Prentice; Editing by Kevin Liffey, William Hardy, Larry King)