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Friday, May 12, 2006. Issue 3409. Page 5. |
EBRD Says It Will Move East in 2010
By Stephen Voss
Bloomberg
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Alan Weller / Bloomberg EBRD President Jean Lemierre |
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LONDON — The European Bank for Reconstruction and Development will cease funding in Baltic and Central European nations after 2010, turning its focus to Russia, southeastern Europe, the Caucasus and Central Asia.
The bank's board made the unanimous decision Thursday as it drew up its five-year plan, EBRD President Jean Lemierre said.
Overall funding will total 3.9 billion euros ($4.99 billion) in 2010, compared with 3.7 billion euros this year, he said.
The EBRD plans to phase out loans to the eight newcomer countries in the European Union, or EU-8, as their capital markets are increasingly able to provide funding for businesses and projects without aid from the state-backed EBRD. “These EU-8 will graduate from the operations of the bank by 2010. Segments of the economy are financed in the normal way by the private sector without the need of a risk-taker like us,” Lemierre said in London.
The EBRD was set up by Western governments in 1991 to help build market economies in Eastern European and former Soviet states.
Bank funding for projects in the EU-8 nations plus Croatia will drop to less than 250 million euros, or 6 percent of the total, in 2010, compared with 45 percent in 2001. Funding for Russia will rise to 1.6 billion euros in 2010, or 41 percent, from 22 percent in 2001.
More funding will also go to Ukraine, the Caucasus, including Armenia, and Central Asian nations, including Kazakhstan and Uzbekistan, with those regions collectively expected to get more than 2 billion euros of loans, or 53 percent of the total, in 2010, compared with 33 percent in 2001.
The EBRD expects to open two new offices in Russia and another in Ukraine this year, and possibly one in Montenegro, Lemierre said. EBRD staff in Russia will double to 90 people.
The bank will decide between June and September whether to provide funding for the Royal Dutch Shell-led Sakhalin II oil and gas project in Russia, Lemierre said Thursday.
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