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Russian déjà vu

The EBRD is coming under a barrage of fire for its lending policy in Russia. Over the last nine months the pace of lending has been picking up momentum. But the bank is catching flak for three big deals.

The EBRD has already signed off on a $150 million loan to Russia's biggest oil company, Lukoil, to fund an investment and expansion plan. And the bank is also in negotiations with the state-owned gas monopoly, Gazprom, which wants a $250-million loan, and a joint venture between the producer of the ubiquitous Lada car, Avtovaz, and General Motors, which is asking for $220 million.

Several objections have been raised to these deals.

Some think that the EBRD is more concerned about getting loans out the door than who it is lending to. "I believe that the shareholders of the EBRD are pushing management to get a lot of loans out of the door and very few Russian companies are capable of taking these big loans - only the natural resource producers," says Christopher Granville, the political and equity strategist at Troika Dialog.

All these deals are big by Russian standards: the Lukoil deal is the EBRD's third largest loan ever in Russia and both the Gazprom and Avtovaz deals would set new records.

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