Kudrin Eyes New Loan for Belarus

Finance Minister Alexei Kudrin said Thursday that Russia would consider extending a new loan to Belarus worth $2 billion.

Kudrin made the announcement after signing a deal to lend Belarus $1.5 billion to help it handle rising Russian energy prices.

The possibility of an additional loan will add to concerns among opponents of Belarussian President Alexander Lukashenko that he is driving the country into increasing dependence on Russia.

Kudrin and Belarussian Finance Minister Nikolai Korbut signed an agreement on the $1.5 billion loan, which President Vladimir Putin announced after meetings with Lukashenko last week, his first state visit to Belarus in several years.

"There is an instruction from the presidents to study the possibility of providing a new credit," Kudrin said.

He suggested a decision was likely in about a year.

RIA-Novosti reported that Belarus would receive the $1.5 billion loan this year and next and would not have to begin paying off the principal before 2012.

Belarus depends heavily on Russian energy to fuel its largely Soviet-style, centrally managed economy. Following a dispute over energy prices at the beginning of the year, Russia forced Belarus to accept a doubling of gas prices this year, to $100 per thousand cubic meters, and Gazprom said Saturday that Belarus would pay $119 in 2008.

Under the deal, prices are to rise to market levels- minus the transit cost and export duties -- by 2011, the year the next presidential election is scheduled in Belarus.