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EBRD Declines Sakhalin Loan

The European Bank for Reconstruction and Development has announced it has decided not to invest in the $20 billion Sakhalin-2 oil and gas project, following the harassment debacle that gave Gazprom majority control. While numerous environmental groups are praising the decision, it seems that the decision was based on the attack on the market – not the threats to the grey whale. From Reuters via Moscow Times:

Gazprom’s purchase of a controlling stake in Sakhalin-2 at a knockdown price amounts to renationalization of the offshore fields and this is at odds with the EBRD’s role of helping the former Soviet bloc move toward a market economy, analysts said. State-backed Japan Bank for International Cooperation and Britain’s Export Credits Guarantee Department said Friday that they were still considering whether to extend financing to Sakhalin-2. A number of banks, including ABN-Amro and Royal Bank of Scotland, are also considering loans, said James Leaton, an oil and gas policy officer at environmental group WWF. After years of badgering the EBRD, the nongovernmental organizations will now target their campaigning on these other lending institutions. Some analysts say Russian control of Sakhalin-2 will make it harder for NGOs to exert influence over the project.