Berlin Siemens Energy is to deliver a total of 16 gas turbines and other equipment for power plants from its plant in Sweden to Belarus. But business with the country of “Europe’s last dictator”, as the autocratic ruling President Alexander Lukashenko is called for 27 years, is now threatened with an abrupt end.
The Swedish credit insurer EKN announced its exit from the project on Wednesday: “The prerequisites are not in place that would enable the two projects in Belarus to meet human rights requirements in accordance with the international framework.” The Handelsblatt learned from financial circles that the German banks involved were no longer making the planned loans available.
With KfW-Ipex-Bank, Commerzbank and Landesbank Hessen-Thüringen (Helaba), three German banks are involved in the financing of the Siemens Energy contracts. Spicy: KfW-Ipex is the subsidiary of the German state development bank Kreditanstalt für Wiederaufbau, the federal government holds over 15 percent of the shares in Commerzbank, and Helaba is an institution under public law in which the two federal states own more than twelve percent of the shares.
The DAX group Siemens Energy has so far been evasive: “We are of course monitoring the current events in the country very closely,” said a company spokesman. The company “of course strictly adheres to all applicable national and international provisions and ordinances”. In addition to the now open question of financing, there are also expected new EU sanctions.
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On Tuesday, the EU had already banned Belarusian airlines from landing in the member states and asked European airlines to bypass Belarusian airspace. This is how the European heads of state and government reacted to the forced landing of a civil Ryanair plane in the Belarusian capital Minsk with a MiG29 military jet. Actually, she was on her way from Athens to Vilnius, Lithuania. The Belarusian opposition member Roman Protasewitsch, who had previously fled into exile, was arrested.
Belarusian opposition runs internet campaign against Western companies
Because of this incident, which Vice Chancellor Olaf Scholz classified as a “bad act of piracy”, further EU sanctions would shortly be imposed – and they would hit the Belarusian dictator Lukashenko hard, said the social democratic chancellor candidate at his first European policy speech to the SPD-affiliated Friedrich -Ebert Foundation. “Its economic foundations are endangered by what has already been decided and by what we will still decide,” said Scholz.
The chairman of the Foreign Affairs Committee in the Bundestag, Norbert Röttgen (CDU), is also calling for “tough sanctions to be imposed on Alexander Lukashenko’s entire apparatus of power”. In the “Wirtschaftswoche” he demanded that the state companies in particular now have to be “targeted, from which the regime and its corrupt profiteers make a living”.
EU summit decides to extend sanctions against Belarus
This also puts German companies under pressure. The Belarusian energy companies are all state-owned – and customers of Siemens Energy. Since 2019, the company has completed orders for the delivery of 16 gas turbines and equipment for power plants, including turbines for replacement power plants for the new Ostrowez nuclear power plant. But because of the EKN exit, the financing is now shaky.
Also affected is the German insurance group Allianz, whose subsidiary Allianz Global Advisors, according to the Belarusian opposition, is to hold government bonds of the country in the amount of 86 million euros in index funds. Allianz told Handelsblatt that it was planning “not to buy any more Belarusian government bonds”.
Most recently, major western banks such as the American Citigroup, the Austrian Raiffeisen Bank International and the French Société Générale had brought Belarusian government bonds to western investors. Belarus currently has $ 42.2 billion in foreign debt. Government bond prices have plummeted since the Ryanair plane was forced to land on Sunday.
The Belarusian opposition has now started a campaign on the Internet against Western companies that do business with the dictatorial country. She accuses the company – especially Siemens Energy – of accepting “blood money” from Lukashenko. The electricity generated with the help of German turbines would also be used to operate stun guns, with which opposition members would be tortured in prisons.
After the mass protests against Lukashenko’s fake re-election last August, thousands of opponents of the ruler were arrested and, in some cases, brutally mistreated. Some members of the opposition were killed. The fate of some is still unclear today.
More: The EU is taking sanctions against the government in Minsk – but what can they do?