The London-based European Bank for Reconstruction and Development (EBRD) is considering to resume operations in Russia starting from next year, according local media reports.
The bank’s shareholders might take their decision (positive or negative) in December or January, online publication Gazeta.ru wrote last week, referring to “an unnamed source close to the bank.”
Contacted by East-West Digital News, the bank’s press service neither denied nor confirmed the information.
All EBRD projects must be approved by the Board representing the 64 countries and two international institutions (the EU and the EIB), which own the EBRD.
The profitability of the EBRD’s Russian projects is higher than the average, another unnamed source told Gazeta.ru, while the state of mind of some of the bank’s shareholders towards Russia has “strongly changed lately.”
Politics vs. business
The bank froze new investment projects in Russia in late July 2014, amid the international tensions triggered by the Ukrainian crisis. A majority of its shareholders, including “all EU member states and several non-EU shareholders,” announced that, “for the time being, they will be unable to approve” new projects in Russia.
Following the shareholders’ decision, the EBRD pulled out of a planned joint investment fund with Rusnano, the state-owned nanotech corporation.
A few months later, however, the bank did participate — along with Intel Capital and two Russian funds — in a significant round of financing for Webinar.ru, a Russian web- and video-conferencing software company. The transaction had been agreed just before before the announcement to freeze investment activity, which applied only to new projects.
€24 billion invested in Russia since 1991
When created in the early 1990s to support Eastern European countries in their transition toward market economy, the EBRD considered help to Russia as being “its single biggest challenge.”
“The immediate task facing the members of the international community who grouped together to found the Bank was how to revive a bankrupt state whose economy had ceased to function,” the bank reminded recently.
One of the bank’s first major initiative was the creation of a mechanism for supporting micro, small and medium-sized businesses, the Russia Small Business Fund (RSBF). The banks which participated in this mechanism, which was set up in 1993, have since issued over 800,000 loans worth €16 billion, according to the EBRD.
In total, the EBRD invested €24 billion in Russia, spread over 800 projects, from 1991 to 2014. Its last investments in the IT and telecom sectors went to online package tour reseller Travalata, IT service company Maykor, Internet broadband provider Trivon, and telecom tower operator Russian Towers, among others.
