EBRD to review relations with Russia in September - Finance Ministry

EBRD is going to consider relations with Russia only after break

The European Bank for Reconstruction and Development (EBRD) Bank for Reconstruction and Development Board (EBRD) is going to consider the issue of relations with Russia in September 2016, after the break, Director of the Department for International Financial Relations of the Finance Ministry Andrey Bokarev told journalists on July 21, 2016.

"The letter from Russia was sent to the bank. Now there will be a break in the EBRD Board of Directors work. On a high political level this issue will be considered in September," he said.

According to Bokarev, Chairman of the EBRD Board of Governors confirmed that Russia’s appeal was received and will be considered. "Another thing is that the prospects of consideration are not clear. What the decision will be and whether it is a positive decision for us - it is difficult to say," he said, adding that it is impossible to talk about EBRD completely withdrawing restrictions on Russian projects.

Bokarev said earlier that suspension of the European Bank for Reconstruction and Development (EBRD) work with Russian projects increases risks and causes real financial losses for the bank.

"These are not just loud political statements. In this particular case, due to suspension of work on the Russian projects, the bank is actually suffering losses and creates additional risks for itself," he said.

According to Bokarev, until recently one-third of the Bank's portfolio was tied to Russia. "Even now, when our share is about 10%, based on the results of last year profit from the Russian projects accounted for one third of the Bank's profit for the year," he said. "It is clear that the work in the Eastern Mediterranean region (North Africa and the Middle East) cannot provide a sufficient level of profitability and increases the bank's risks," he added.

He said he was not taking into account the political context; the sharp increase of the portfolio for Ukraine in the current economic situation in the country does not generate guarantees of additional income for the bank.

On July 19, an official representative of the EBRD told TASS that EBRD Board of Directors discussed Russia’s letter addressed to chairman of the Board of Governors of EBRD Pierre Gramegna.

In that letter the Russian authorities requested the Bank's shareholders to clarify if the decision to freeze new projects in Russia is in line with international status of the bank.

In May, Deputy Finance Minister Sergei Storchak said that the Bank's management shows willingness to work with Russia and is ready to return to the Russian market once the political conditions are created for it.

In July 2014, the Bank's shareholders adopted a resolution on the "temporary suspension" of financing of new projects in Russia. This decision was taken on the initiative of the bank's shareholders from the EU due to the introduction of anti-Russian sanctions.

The EBRD was established in 1991 to contribute to the establishment of a market economy in the countries of the former socialist camp.

Currently, the Bank's shareholders are 64 countries, as well as the EU and the European Investment Bank (lending institution of the European Union to finance the development of backward regions of Europe in the form of long-term loans).

Russia’s has been a member of EBRD since 1992. Until recently, the country accounted for almost one third of the Bank’s operations. In 1992-2014 EBRD financed about 800 projects in Russia.

Source: Tass.com

Read more: Russia to raid pension funds to finance infrastructure projects>>>

All rights reserved by Rossiyskaya Gazeta.

We've got more than 2 million followers on Facebook. Join them!

This website uses cookies. Click here to find out more.

Accept cookies