July 7, 2015 / 3:33 PM / 5 years ago

Russia says new BRICS bank a good stimulus for member states

MOSCOW (Reuters) - The development bank being set up by the BRICS emerging nations is a good stimulus for building infrastructure in member states and projects undertaken by large Russian firms such as Rosneft (ROSN.MM) could get funding, Russia’s finance minister said.

An employee cleans a board during the preparations for the BRICS summit in Ufa, Russia, July 7, 2015. REUTERS/BRICS Photohost/RIA Novosti

Moscow has been pressing for the BRICS bank, with $50 billion in initial capital, to become an alternative to Western financial institutions, which have cut back on lending to Russia due to sanctions over the Ukraine crisis.

Anton Siluanov, speaking to journalists on Tuesday ahead of a meeting of leaders from Brazil, Russia, India, China and South Africa in the Russian city of Ufa later this week, said the first projects “will appear by the end of the year”.

Siluanov said he hoped international rating agencies would rate the new bank’s debt “soon” - a necessary condition for it to begin operations.

“We agreed that we need to act quickly, effectively. Competition between international banks is rather high, it is necessary to carve out a niche,” he said.

Other BRICS members are also keen for their New Development Bank to begin operations, worried that other new lending institutions, such as the China-led Asian Infrastructure Investment Bank, could diminish its significance.

Russia now needs to draw up a list of projects that could receive funding from the BRICS lender, complete with an economic basis for their selection, Siluanov said.

“I think that Rosneft projects will clearly be interesting for the financial development institutions that are created,” he said, in response to a question from journalists about whether the state oil giant could receive funding.

Separately, Siluanov said the International Monetary Fund and the European Union should have acted sooner to tackle Greece’s debt problems.

“But in any case Greece needs to work on getting its liabilities in line with the possibilities of its economy,” he added, repeating that Russia had not looked into the question of providing loans to Greece since Athens had not asked for help.

Russia does not plan to borrow in yuan to finance its budget deficit, Siluanov said.

Reporting by Alexander Winning, Darya Korsunskaya and Elena Fabrichnaya; Writing by Lidia Kelly and Alexander Winning; editing by Gareth Jones

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