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Eastern Europe
May 5, 2017 www.intellinews.com I Page 17
EBRD head sees Russian investment ban holding up
bne IntelliNews
The European Bank for Reconstruction and De- velopment (EBRD) is expected to reject Moscow’s bid to end a ban on new investment in Russia, the bank’s head Sir Suma Chakrabarti told the press on May 2.
The EBRD froze new investment in Russia in 2014 after the imposition of international sanctions for Moscow’s actions in Ukraine. The freeze is likely to be discussed at the upcoming EBRD meeting in Nicosia, Cyprus on May 9-11, with Moscow argu- ing that the ban contradicts the bank’s internal rules.
The EBRD board, which consists of national finance ministers and central bankers, already re- jected a similar appeal last year.
“This situation was discussed last year by our board and there was no change then to the guid- ance (not to invest in Russia),” Reuters quoted Chakrabarti as saying. “Let’s see how it goes in Nicosia. I’m not expecting it to be very different,” he added.
Russia was one of EBRD’s biggest markets before 2014, but the halt of new investments saw the country’s share decline to about 10% of €3.7bn
of the total portfolio. Meanwhile, Turkey took the lead from Russia, with over €7bn spent in the country in 2016 alone.
However, “what is happening in a political context [in Turkey] has affected foreign investor sentiment and some domestic investor sentiment, so the pipeline [for EBRD investments] is not as strong as it was last year, that is for sure,” Chakrabarti said.
side could consider dumping its share in the bank unless the measures were eased.
However, Chakrabarti told reporters in April when pressed on whether Russia could withdraw unless the bank resumed funding projects in the country: “No one [is] talking about take money and go, no one suggest[s] that. We see a value of Russia as a shareholder.”
Indeed, the EBRD's Russian assets, as well as its Turkish and Polish portfolios, were the highest yielding last year, according to Chakrabarti.
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An EBRD source claimed in April that the Russian