* EBRD chief says loans to Russia could drop as economy
* Bank to look at 'doing more' in Central and Eastern Europe
* Governments there worried about Russia, energy security
(Adds quotes, detail, background)
By Marc Jones
WARSAW, May 15 Lending to Russia by the European
Bank for Reconstruction and Development could drop as the
economy slows, the bank's head said on Thursday, while it may
step up loans to countries at risk of economic damage from the
EBRD funding in Russia slumped last year to 1.8 billion
euros ($2.5 billion) from 2.6 billion in 2012 due to what the
development bank termed "difficult investment conditions".
Its president, Suma Chakrabarti, said it could now drop
again this year.
"It could impact on our business volumes in a country the
size of Russia if the economy keeps slowing because investment
then slows," Chakrabarti told reporters at the bank's annual
meeting in Warsaw.
On Wednesday the EBRD slashed its growth forecast for Russia
to zero this year and warned it could fall into recession,
especially if further U.S. and EU sanctions are imposed.
But the bank had no plans at the moment to stop its funding
to Russia in reaction to Russia's annexation of Crimea and the
situation in eastern Ukraine, parts of which have been taken
over by pro-Moscow separatist militants.
"There are some shareholders that are seriously concerned
at, as they perceive it, Russia's behaviour in eastern Ukraine,"
"That may play out in the EBRD, it hasn't yet," he said.
"The shareholders bought into my argument that the EBRD has been
a force for good in Russia. We will see what the future holds,
but not yet."
Chakrabarti himself has pulled out of an international
conference Russia is holding in St Petersburg this month. He
said he had an urgent engagement elsewhere, but gave no details.
Meanwhile, he said, the bank would look in the next few
months at increasing its investments in central and eastern
Europe. Governments in the region fear the Ukraine crisis could
hurt their economies and Chakrabarti said there was high demand
for EBRD loans, which come on attractive terms.
"In the next few months we will look if we can do a bit more
in the region," he said. "There is high demand for more EBRD
resources, this is absolutely accurate.... Energy security
comes up a lot in the conversations at the moment."
EBRD shareholders earlier voted to provide up to 700 million
euros of financing to Cyprus over the next six years to help it
weather the euro zone debt crisis. They also approved Libya as a
full-fledged bank member.
The EBRD was created in 1991 to invest in the former Soviet
bloc countries of eastern Europe. In recent years, its
membership has expanded to include Mongolia, Turkey and
economies affected directly or indirectly by the Arab Spring
such as Morocco, Egypt, Tunisia and Jordan.
($1 = 0.7294 Euros)
(Reporting by Marc Jones; Editing by Mark Trevelyan)