Russia`s government is to inject $265 million of budget money into a state-owned bank in Crimea because the lender does not have enough capital to finance infrastructure projects in the region, which Moscow annexed from Ukraine three years ago, according to Reuters.
According to a government order seen by Reuters, the charter capital of the Russian National Commercial Bank (RNKB), one of the biggest lenders in Crimea, is to be increased by 15 billion roubles ($265 million) via the issue of additional shares.
The shares are to be bought by the government and paid for out of budget funds, the order stated.
In an explanatory note to accompany the order, the government said the resources the bank has at the moment were not sufficient to finance planned infrastructure projects such as new power plants and a new airport terminal.
The decision to increase the bank`s capital ”will allow RNKB to ensure implementation of investment projects,” the note said.
Russia promised ambitious projects to develop Crimea`s economy and hoped many of them would be financed by private business. But that finance has not materialised, in part because of Western sanctions on investments in the region. The burden has instead shifted on to state coffers.