China Eximbank provides $51.8 million preferential buyer’s credit for Phase 2 of Orsha Linen Mill Modernization Project

Project narrative

On December 30, 2015, China Eximbank and the Government of Belarus signed a $51,834,700 preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK № PBC (2015) 44 (387)] for Phase 2 of the Orsha Linen Mill Modernization Project. The PBC carries a maturity of 15 years. Its interest rate and grace period are unknown. BSP-Sberbank OJSC is the loan servicing agent. The proceeds of the PBC were on-lent from the Government of Belarus to a state-owned company called RUPTP Orsha Linen Mill (РУПТП Оршанский льнокомбинат), which in turn used the proceeds to finance 85% of the cost ($60.982 million) of its commercial (EPC) contract with CITIC Construction, which was signed on May 11, 2015. The purpose of this project was to upgrade and reconstruct the Orsha Linen Mill (Orša Flax Mill), which is a textile enterprise in the city of Orsha that processes linen fiber and produces linen fabrics. Upon completion of the project, it was envisaged that the processing capacity of the factory would increase by 80%. Labor costs were also expected to fall by 45% and value-added per worker was expected to rise to $15,100 per year. CITIC Construction was the EPC contractor responsible for implementation. This project was implemented between 2015 and 2017. On December 11, 2017, the Vitebsk State Construction Supervision Bureau of the National Standards Committee of Belarus formally issued a project acceptance certificate, which marked the successful completion of the project.