EBRD unhappy with privatization in Belarus

The European Bank for Reconstruction and Development (EBRD) expects the Belarusian authorities to make progress in privatization transactions. According to TUT.BY, if it doesn’t happen, the bank may revise its strategy for working with the Belarusian public sector in the future.

Recently, Economy Minister Dzmitry Krutoy met with EBRD President Suma Chakrabarti. As noted in the press release of the Ministry of Economy of Belarus, the EBRD stressed its interest in the privatization of Belarusian banks and enterprises in the context of the preparation of a new EBRD strategy for Belarus for 2020-2023. The previous strategy was approved in 2016. It allowed the European Bank to expand cooperation with the Belarusian public sector.

As a result, the Bank invested a record EUR 360 million in Belarus in 2018. According to the results of 2019, this indicator may be exceeded. In particular, it is expected that financing will be provided for the construction of roads, bridges and water treatment facilities.

However, the privatisation in Belarus has been delayed. For four years, the EBRD has been discussing the purchase of a blocking stake in Belinvestbank. However, in the summer, the EBRD and the Belarusian authorities were far apart in their assessment of the bank’s value. In addition, the direct competitor of the EBRD – the Eurasian Development Bank – showed its interest in Belinvestbank.

“It is clear that the EBRD is dissatisfied with the way the pre-privatization projects are implemented in Belarus,” the source told TUT.BY. “According to the latest information, the EBRD has made another proposal for Belinvestbank. But it’s not just that. The project to buy the state stake in Priorbank by the EBRD remains unfinished (previously it was reported that the EBRD agreed to buy the state stake (about 6%) for €17 million – TUT.BY). There are optimistic signals on Krynitsa OJSC.

But if the projects in which a lot of effort, money and time have been invested do not get implemented, then, of course, the [EBRD] shareholders will surely be ready for unpopular decisions. Especially now they have a new promising region for investment”.