* Bosnian Serb leader facing election on Oct. 12
* Says secures loan during visit to Moscow
* Bosnian finances hit by flooding in May
BANJA LUKA, Bosnia, Sept 19 (Reuters) - The leader of Bosnia’s autonomous Serb Republic said on Friday Russia would loan the region 500 million to 700 million euros ($643 million to 900 million) to help steady its finances after devastating flooding in May.
There was no immediate confirmation from Russia.
Bosnian Serb President Milorad Dodik, who faces a general election on Oct. 12, met Russian President Vladimir Putin on Thursday in Moscow during a five-day visit that his opponents criticised as electioneering with government money.
“I have received confirmation that the Russian government, after passing a revised budget, agreed to approve a loan of between 500 and 700 million euros to Republika Srpska (the Serb Republic),” Dodik told a news conference on his return to the regional capital, Banja Luka.
He said his government had asked for a grace period of two to three years, an interest rate of 2 to 3 percent and a 10-year maturity.
“These are our terms, which the Russian side has neither rejected nor accepted,” he said. The loan would require parliamentary approval in Russia, he said, since the Serb Republic is not a state.
The election is complicating efforts to meet terms set by the International Monetary Fund for disbursement of new funds under its loan agreement with Bosnia. The IMF sent a mission last week, but Bosnian Prime Minister Vjekoslav Bevanda said on Wednesday the governments in Bosnia were unlikely to meet reform deadlines.
Dodik said the Serb Republic needed a reserve plan - the Russian loan - in case the IMF on Friday freezes disbursement.
“We do not want to break the agreement with the IMF, but we cannot accept blackmail,” he said.
Dodik has long tried to nurture ties with Russia, seen by some nationalist Serbs as their big-power protector. The Bosnian Serb leader advocates secession from Bosnia, something the West opposes.
Bosnia, split between two autonomous regions at the end of the 1992-95 war, suffered damage estimated at around 2 billion euros during the worst rainfall to hit the Balkans since records began more than a century ago.
Bosnian Serb Prime Minister Zeljka Cvijanovic said that Russia’s VTB bank had approved a credit of 65 million euros to help the region plug a budget deficit that has widened since the flooding. (1 US dollar = 0.7781 euro) (Writing by Daria Sito-Sucic; Editing by Matt Robinson, Larry King)
Our Standards: The Thomson Reuters Trust Principles.