China Eximbank provides $312.8 million preferential buyer’s credit for 400MW Lukoml Power Plant Construction Project (Linked to Record ID#42199, #42214 and #66983)

Project narrative

On December 22, 2010, China Eximbank and the Government of Belarus signed a $312.8 million preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK No. PBC (2010) 32 (139)] for the 400MW Lukoml Power Plant Construction Project. The PBC, which was funded through a $5.7 billion framework agreement (captured in Record ID#42199) and partially fulfilled a $1 billion pledge from March 2010 (captured in Record ID#42214), carried the following terms: a 15 year maturity, a 5 year grace period, and a 3% annual interest rate. The Government of Belarus on-lent the proceeds of the PBC to a state-owned energy company called RUE Vitebskenergo. RUE Vitebskenergo then used the proceeds of the PBC to finance 85% of the cost of a commercial contract [№ Витебскэнерго-СМЕС-001] that it signed with China Machinery Engineering Corporation (CMEC) on September 21, 2010. The purpose of this project was to install a 400MW combined cycle gas turbine at the Lukoml Power Plant in the town of Novolukoml. Upon completion, it was expected that the plant would save 242,000 tons of oil equivalent per year. The new installation was designed to burn natural gas and achieve a performance factor of 57%, whereas the performance factor of conventional the units of the power plant stood at 39.4%. Combined cycle gas turbines also use less water per unit of electricity and are more environmentally friendly. CMEC was the EPC contractor responsible for implementation. Construction began on January 18, 2012 and the power plant was handed over to the local authorities on June 4, 2014. The plant ended its warranty period and was successfully transferred to the owner on May 12, 2016.