(In March 5 item, corrects amount EBRD currently has invested
in Russia to 9.7 bln euros from 23.5 bln)
LONDON, March 5 The European Bank for
Reconstruction and Development promised Ukraine a 5 billion
euros, six-year aid package on Wednesday on the condition it
enters into an IMF programme and makes greater efforts to stamp
The bank also doused speculation that it could be used by
Western backers to punish Moscow for its recent actions in
Ukraine, saying it was continuing to invest in Russia.
It said the package for Ukraine, which will run until 2020
as part of a bigger 11 billion euro European Union deal, was
aimed at supporting the country, "as part of a coordinated
international financial assistance programme in support of
credible structural and macroeconomic reforms."
The 5 billion euros earmarked could be exceeded if economic
circumstances permitted. It added it was "essential for investor
confidence" that Ukraine agreed a macro-economic stabilisation
programme with the International Monetary Fund.
Ukraine has been thrown into chaos in recent weeks as the
ousting of its pro-Moscow president Viktor Yanukovich has been
followed by Moscow effectively taking control of Ukraine's
largely Russian-speaking Crimea peninsula.
Ukraine is on the verge of bankruptcy because of economic
mismanagement, high energy costs and currency turmoil amplified
by its conflict with Russia. Kiev's new rulers have said they
need $35 billion over the next two years.
Jonathan Charles, the EBRD's head of communications, said
that part of the deal would see the bank investing with the
Ukraine government again.
Though it had continued with private sector projects, it had
used worries about corruption to stop its direct dealings with
Kiev last month as European pressure rose on Yanukovich.
"With the new government we will be looking at all
possibilities again," Charles said. "There is now a Ukraine
taskforce working in the bank to assess what Ukraine's needs are
and what we can do to meet them."
Although he was careful not to pre-empt any decisions ahead
of Thursday's summit of European leaders, Charles also played
down speculation that the EBRD could reduce its lending in
Russia as part of any potential sanctions imposed over Ukraine.
Russia is where the EBRD spends the biggest proportion of
its money. Of the 8.5 billion euros it invested last year, 1.8
billion went to Russian projects, bringing the overall amount it
has at stake in the country to 9.7 billion euros.
According to its latest figures, 331 projects are up and
running. Industry, commerce and agri-business schemes make up
just under half the total, energy and infrastructure share about
30 percent and financial sector loans make up the rest.
"We are continuing to invest in Russia," Charles said.
(Reporting by Marc Jones Editing by Jeremy Gaunt)