Gazprombank, the main banking arm of Russian state energy giant Gazprom [RTS: GAZP], proposed a loan to Belarus earlier this week for the same purpose, but the Belarusian government declined the offer.
"The money will be enough to pay the $450 million debt for Russian natural gas supplied to Belarus, which Gazprom officially announced about today," Viktor Babariko said.
Belarus previously asked for a $1.5 billion loan from Russia, and last week Russian Finance Minister Alexei Kudrin said the government had essentially approved the loan. But Prime Minister Mikhail Fradkov said after talks with his Belarusian counterpart Sergei Sidorsky early this week that no loan would be extended.
Gazprom announced earlier Wednesday that it would cut gas supplies to Belarus by 45% as of August over the accumulated debt and lack of payment guarantees.
Experts said Belarus had asked for the $1.5-billion loan exceeding its gas debt to secure a financial cushion for its economy in the future, as its economic development had been heavily dependent on subsidized prices for Russian natural gas.
Early this year Russia doubled the gas price for Belarus to $100 per 1,000 cubic meters, which although being less than half the average rate to the European Union, still dealt a heavy blow to the Belarusian economy. Gazprom, which has set its sights on Belarus's Europe-bound pipelines, arranged to buy 12.5% in Beltransgaz for $625 million in June as the first of four installments to acquire 50% in the pipeline company by 2010.