* Loans to Russia plunged due to difficult conditions
* EBRD stepped up loans to central, SE Europe
* SE Europe still vulnerable after debt crisis
By Carolyn Cohn
LONDON, Jan 15 The European Bank for
Reconstruction and Development said on Wednesday that its
lending to Russia fell sharply last year because of difficult
economic and investment conditions there, but it was looking to
build up investment again in 2014.
The bank cut lending to Russia to 1.8 billion euros ($2.46
billion) in 2013 from 2.6 billion a year earlier.
The EBRD invests mainly in the private sector in emerging
Europe and the Middle East and the North African countries of
Egypt, Jordan, Morocco and Tunisia.
Its overall investments fell to 8.5 billion euros from 8.9
billion, according to preliminary estimates, but it stepped up
lending in central and southeast Europe as well as the Balkans.
In Russia, the global financial crisis and vast illegal
outflows of cash, estimated by a former central bank chief at
$50 billion a year, have caused a fragile recovery to stall.
The country has acknowledged that its economy will lag
global growth over the next two decades, averaging annual growth
of just 2.5 percent during that period - half the rate President
Vladimir Putin targeted before his return to the Kremlin in
"Russia's economic slowdown proved to be a challenge for
EBRD investment in 2013," said EBRD chief operating officer Phil
"We are working hard to build up our activities across
Russia as well as Russia's share of the EBRD'S overall
The EBRD said 2013 was not an easy one for financing in its
regions of operation.
"These investments (we made) were achieved against a
backdrop of general investor reluctance in the face of continued
economic fragility," it said in a statement.
The bank expects a net profit of 1 billion euros for 2013,
in line with 2012, and said this "will largely be ploughed back
into future financing".
The EBRD increased investment in southeastern Europe to 1.65
billion euros in 2013 from 1.5 billion in 2012, saying this
region "remained particularly vulnerable to the effects of
problems in the euro zone".
It also increased lending to central Europe and the Baltic
states, to 1.6 billion euros in 2013 from 1.2 billion in 2012.
It invested 920 million euros last year in Turkey and 450
million euros in the four Middle East and North African
countries, in the EBRD's first full year of lending to them.
The number of individual projects the EBRD has financed
stood at 392 in 2013, almost matching the record high of 393 in