July 23, 2014 / 11:43 AM / in 4 years

EBRD says unable to approve new investment projects in Russia

LONDON, July 23 (Reuters) - The European Bank for Reconstruction and Development said on Wednesday that a majority of its board of directors had given it “clear guidance” that they would be unable to immediately approve new investment in Russia.

The statement from the bank comes a week after the EBRD said it would consult all of its shareholders on the implications of the European Union’s call for it and the European Investment Bank (EIB) to suspend new lending in Russia.

“Their guidance follows a declaration by last week’s European Council which called on the EU member states to coordinate their positions within the Bank’s Board. The EBRD management will be guided by this in its operational approach in Russia,” the EBRD said in a statement.

The Board of Directors represents all EBRD shareholders which consist of 64 member states, the European Union and the European Investment Bank.

The EBRD said, however, that it would continue to manage its portfolio of existing projects in Russia and would maintain its physical presence there.

Russia has traditionally been the biggest recipient of the London-based EBRD’s funds - it lent 1.8 billion euros ($2.46 billion) there last year. The EIB pledged to lend more than 1 billion euros to Russia last year.

In the first six months of 2014, Russia accounted for 19 per cent of the bank’s investments. During this period, investments in all the countries of operations were a record 3.6 billion euros, the statement added. (Reporting by Carolyn Cohn and Sujata Rao. Editing by Chris Vellacott)

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