Business with Russia: multilateral banks must rethink their approach to Russian exposure, 1 April 2022

The London-based European Bank for Reconstruction and Development (EBRD), created in April 1991 to ‘foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative’, has suspended investments in Russia since the annexation of Crimea in 2014 and in Belarus since the fraud elections in 2020. 

In March, the Bank launched a formal resolution process with its Board of Governors to formally cut Russia and Belarus from its resources, which, when adopted by its Board of Governors, would allow it to stop disbursements under numerous sovereign infrastructure projects in Belarus. 

In comparison, the EU-controlled European Investment Bank (EIB) suspended all such disbursements in the summer 2021, following adoption of EU sectoral sanctions...

Some multilateral institutions, including the EIB, EBRD and IMF-World Bank Group have already announced resilience packages to help Ukrainian citizens, companies and institutions affected by the war. The EUR 2 billion resilience package from the EBRD also includes support for neighbouring countries affected by the humanitarian crisis, as nearly 4 million refugees have fled the war in Ukraine...

Even though most of the multilateral development banks have pulled out of Russia and Belarus...they are still prepared to finance commercial banking groups present there. By doing so, they indirectly support these businesses’ operations in Russia and Belarus and hence, Putin’s war and Lukashenko’s assistance and domestic repression...