EBRD president: Bank might continue Belarus private sector investments

LONDON (Reuters) – The president of the European Bank for Reconstruction and Development (EBRD) said on Monday the lender might continue investing in private sector projects in Belarus as governments around the globe slap sanctions on Minsk.

The forced landing of a Ryanair passenger plane in Minsk on May 23 to arrest a dissident journalist has sparked fresh sanctions from the European Union, the United States, Canada and the UK. The curbs include a raft of measures against individuals and firms.

Majority-owned by G7 powers, the EBRD has faced scrutiny after other institutions such as the EU’s lending arm, the European Investment Bank (EIB), said they would stop funding new projects in Belarus as part of the bloc’s response to last year’s disputed re-election of President Alexander Lukashenko.

EBRD President Odile Renaud-Basso said the bank had stopped fresh financing for sovereign projects completely since last August and also put a de-facto halt to new sub-sovereign projects. However, the lender’s shareholders had not yet decided on whether the lender should stop investing in the country altogether while curbs coming in targeted specific firms and individuals, she added.

“What we have been doing still is projects in the private sector,” Renaud-Basso told Reuters, adding the lender had been cautious to focus investments on firms not related to the government and to the central power.

“There is a case for supporting small companies not related to the government and providing some support to the population, but of course there is a political choice (to make) and we have to go back to our shareholders who will make it at some point.”

Halting projects that the bank had already committed to in previous years could prove difficult, however, she added.

Having a mandate to operate in countries that are “applying principles of multiparty democracy and pluralism,” the EBRD halted all investments in Russia in 2014 after Moscow’s annexation of Crimea.

“Our strategy, as defined by the bank in 2018, is still relevant,” she said. “That involves accompanying evolution and reform in countries and adjusting our investments as necessary. That strategy is still relevant and the best way forward.”

The EBRD has invested more than 3 billion euros ($3.6 billion) across 142 projects in Belarus over the past 20-plus years. Of those, 63% were made in the private sector. Nearly half of those projects are still active, with its current portfolio in the country at 1 billion euros, according to EBRD data.

($1 = 0.8394 euro)