The EBRD bank on Wednesday said it will freeze funding for new projects in Russia in response to sanctions announced by Brussels last week over the Ukraine crisis. The European Bank for Reconstruction and Development confirmed the move as the European Union looks set to follow Washington's lead by announcing a new round of even tougher sanctions against Moscow on Thursday.
The EBRD's board of directors, including all EU member countries and several non-EU shareholders, "have given clear guidance to the EBRD management that, for the time being, they will be unable to approve new investment projects in the Russian Federation," a statement said. European leaders said the EBRD and the EU's European Investment Bank would halt finance for projects in Russia over the Ukraine crisis a week ago.
The London-based institution, founded 25 years ago to help ex-Soviet bloc countries switch to free-market economies and democracy, said it would manage existing projects and client relationships in Russia and keep a "physical presence" in the country. During the first half of the year, 19 percent of its investments were in Russia, with the remaining 81 percent spread across the bank's 34 other countries of operation, the EBRD said.