Finance Ministers Alexei Kudrin of Russia and Nikolai Korbut of Belarus signed the agreement after talks between the two countries' leaders. Russian President Vladimir Putin and his Belarusian counterpart Alexander Lukashenko also attended a meeting of the Supreme Council of the Russia-Belarus Union State earlier in the day.
"With a view to ensuring a smooth transition of bilateral energy cooperation to universal market principles and taking into account earlier agreements and contracts, Russia has decided to grant [Belarus] a state loan worth $1.5 billion," Putin said.
Belarus requested Russia to issue a $1.5 billion loan in February. In late November Kudrin said that the Russian government could grant it to the ex-Soviet republic before the end of the year.
Addressing a news conference after the Union State session, Putin said that the price of Russian natural gas for Belarus would remain unchanged in 2008.
The Russian leader added that Russian natural gas monopoly Gazprom would honor all commitments under contracts signed last year.
"Gas prices for Belarus will certainly be raised, but within the levels fixed in last year's agreement. We will stick to previous contracts, despite the fact that Russia will buy gas at a higher price than we will sell to Belarus," said Putin.
Turkmenistan earlier raised the price for its natural gas, which has been instrumental in gas contracts.
The Russian leader also pledged support to Minsk in minimizing the consequences of price hikes.
"We will try to do everything to eliminate the consequences of gas price hikes for the Belarusian economy," Putin said.
The two leaders reiterated that their countries would honor all commitments on Russian natural gas transits to Europe.
"Supplies of natural gas and oil hugely contribute to strengthening stability across the whole of Europe," Lukashenko said. "We are making this contribution to stability and expect appropriate action on security provisions for our countries from Europe."
On January 1, Russia raised the price of its gas supplies to Belarus to $100 per 1,000 cubic meters from $46.7 in 2006, which sparked an energy dispute between the two countries and triggered more accusations in Europe that Russia is using oil and gas as a political weapon.