LONDON, ENGLAND — A majority of the board of directors of the European Bank for Reconstruction and Development (EBRD), including all E.U. member states and several non-E.U. shareholders, gave clear guidance on July 23 to the EBRD management that, for the time being, they will be unable to approve new investment projects in Russia.

Their guidance follows a declaration by the European Council, which called on the E.U. member states to coordinate their positions within the bank's board. The EBRD management will be guided by this in its operational approach in Russia. The board of directors represents the bank's shareholders (64 member states, as well as the E.U. and the European Investment Bank).

Russian Minister of Economic Development Aleksey Ulyukaev said the freeze contradicts the goals of international development institutions. He said the move could “seriously damage the bank, its customers and long-term interests of all shareholders.”

The bank will continue to manage its portfolio of existing projects and client relationships in Russia. The bank will also continue to maintain its physical presence there. In the first six months of 2014, 19% of the Bank's investments were in Russia, with 81% made in the EBRD's other 34 countries of operations. 
During the first half of 2014, the bank invested a record amount of €3.6 billion in its countries of operations, with a high transition impact and continued strong profitability.