MINSK, 15 May (BelTA) - Alesya Yakimush, Head of the Client Management Department of the Development Bank of the Republic of Belarus, spoke about the terms of lending under the One District, One Project program in a new episode of BelTA’s The Nation Speaks project.
Due to the mandate of the Development Bank, the projects of the One District, One Project program should have a longer payback period. “We consider projects with a payback period of only over seven years. If the project is faster, it goes to partner banks because it is an option offered by commercial banks. The projects that the Development Bank finances are from 7 to 15 years. As a rule, we advise all our clients to take a more realistic, not optimistic, approach to the development of the business plan, in order to build an even schedule of loan repayment and ensure smooth functioning and commissioning,” Alesya Yakimush said.
In total, the Development Bank lends 85% of the investment costs. “Investment costs include capital expenditures, VAT and net working capital growth. Due to the mandate, the Development Bank does not cover net working capital growth. In principle, we can lend 100% of capital expenditures with VAT. For the rest, the client’s participation is mandatory. It may be not exactly money from the company's activities, but funds from the innovation fund, loans from related companies, other sources that may be provided in the form of some grants,” the specialist said.
As for the conditions, the rate on financing is 8% per annum. This rate is valid until 1 January 2029. Further the rate on these loans will equal the refinancing rate (now it is 9.5%), increased by 3 percentage points, but not higher than the calculated value of the standard risk (11.98% as of May 2024).
“The Development Bank lends for up to 15 years, and the beginning of principal repayment is always set for its clients not only after commissioning, but also after reaching the capacity to generate revenue,” Alesya Yakimush added.
