EBRD reviews Belarus projects after plane hijacking

The European Bank for Reconstruction and Development will review all of its projects in Belarus after shareholders raised concerns following the diverting of an airliner to arrest a journalist and his partner.

Bank management gave an initial update to board members Wednesday on the multilateral lender’s activity in the eastern European country of around 9 million people.

Sources at the closed-door discussion said the upcoming review will cover the status of disbursements under the bank’s private and public loans in Belarus, as well as the use of associated technical cooperation funding. EBRD has an active portfolio of €582 million ($709.8 million) in the country, with 63% of its projects in the private sector.

After last summer’s presidential election — which the European Union labelled “neither free nor fair” — EBRD was already limiting new investments in Belarus to “selected private sector projects,” though it states on its website “we continue to fulfil our existing obligations and are committed to completing already signed infrastructure deals.”

Last Sunday, a fighter jet forced a Ryanair flight from Greece to Lithuania to land in the Belarussian capital Minsk to allow authorities to detain journalist Roman Protasevich and his partner Sofia Sapega.

EBRD management will now present its shareholders — which include Japan, the United States, European Union states, Russia, and China — with a range of options on what further steps they could take to toughen bank policy on Belarus.

European governments in the European Council this week backed new sanctions against the regime of Alexander Lukashenko, as well as demanding the couple’s immediate release and an International Civil Aviation Organization investigation into Sunday’s incident.

One source present at Wednesday’s meeting told Devex that of the shareholders who spoke, all but one expressed their support for the European Council conclusions and exploring how to “tighten” policy toward Belarus. That exception was Russia, whose representative spoke on behalf of Belarussian authorities, the source said.

Erik Meyersson, a former academic and blogger critical of EBRD’s human rights record, told Devex that if the bank does decide to leave Belarus altogether “it would be because it would be politically inconvenient for them to remain ... not that they’re following their own Article 1 establishing agreement.”

“When the spotlight is on (in this case Belarus) the risk of public embarrassment is probably too high,” Meyersson added.

Article 1 of the agreement establishing the bank around 30 years ago states that EBRD’s purpose is to support countries “committed to and applying the principles of multiparty democracy, pluralism and market economics.”

Yet that credo is coming under increasing scrutiny. Governors approved the United Arab Emirates’ application for membership — though it is not a country of operation — earlier this year, to the dismay of human rights groups. And rights advocates published an opinion piece in Le Monde newspaper in April, decrying billions of investment in Egypt and questioning new EBRD president Odile Renaud-Basso’s claim that private sector support helped strengthen civil society.

Asked what if anything should change regarding EBRD policy toward Belarus, the European Commission, which is a major shareholder, declined to comment.

The European Investment Bank issued a statement Tuesday, reiterating that it had “stopped activity in Belarus since the country’s presidential elections and will continue to maintain the same stance in line with EU policy.”

For its part, EBRD will be eager to ensure the latest episode does not overshadow its upcoming annual meeting, including the board of governors on July 1. Sources predicted the Belarus review would be completed within weeks.