Russia To Challenge EBRD Ban On New Investments

Russian Economy Minister Maksim Oreshkin will address the EBRD board of governors in Nicosia on May 10.

Russian officials will again try to overturn a ban by the European Bank on Reconstruction and Development (EBRD) on new investment loans in Russia when the bank holds its annual meeting in Cyprus this week.

Russian Economy Minister Maksim Oreshkin is due to address the EBRD board of governors in Nicosia, the Cypriot capital, on May 10.

The EBRD imposed the ban as part of a series of Western sanctions after Moscow's illegal annexation of Ukraine's Crimean Peninsula in 2014 and support for separatists in eastern Ukraine.

Oreshkin is expected to argue that the freeze on new lending to Russia violates the international bank's own rules and is unfair as it affects the entire Russian economy instead of specific sectors.

Moscow began pushing last summer for the EBRD to remove the loan ban.

Although Moscow is likely to gain support from some fellow former Soviet states, EBRD President Suma Chakrabarti said he didn't expect a majority of the bank's 65 member-country shareholders to lift the ban on investment in Russia.

"This situation was discussed last year by our board and there was no change then to the guidance," Chakrabarti, a British citizen, said. "I'm not expecting it to be very different [in Nicosia]."

Despite the current ban on new loans to Russia, the bank is still managing more than $4 billion worth of investments in the country that were begun before 2014.

Russian Deputy Finance Minister Sergei Storchak told TASS that the bank has been losing money recently in part because of the ban on new lending to Russia.

"Their profitability and reliability have worsened," he said, adding that "It is naive to believe that by banning the bank's activities in Russia they will be able to change the trajectory of Russia's policy."

Until recently, Russia accounted for roughly a third of the total volume of the bank's operations.

Created after the 1991 collapse of the Iron Curtain, the EBRD loaned billions of dollars to former Soviet republics and Eastern bloc countries before expanding its reach outside of the region. It currently has investments and trade guarantees in 36 countries.

Uzbek officials are due to attend the Cyprus meeting, the first time in nearly a decade that Uzbekistan has participated in EBRD meetings.

With reporting by Reuters, TASS, and the Financial Times