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. Last Updated: 07/27/2016

Kasyanov Seeks Cash for Energy Deal

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PARIS — Moscow wants the European Union to back a strategic energy supply partnership by authorizing the European Investment Bank to provide some of the massive funding, Prime Minister Mikhail Kasyanov said Tuesday.

The 15-nation European Union, badly hit by a surge in prices from the OPEC oil-exporting states, is keen to find an alternative supplier and said in October that it had agreed to deepen long-term energy cooperation with Russia.

Kasyanov, in Paris to further promote economic ties after an October visit by President Vladimir Putin, said Russia had more oil and gas than the entire Middle East region. But it could cost as much as $20 billion to get it out of the ground and to build the infrastructure needed to supply Western Europe.

He said that he had discussed his ambitions with French oil giant TotalFinaElf and other oil companies but that investment needs went beyond those firms.

"We are going to ask Western European governments. EIB rules do not exclude credit to other countries," he told a group of French industrialists. "It seems logical to have the [EIB] involved."

Kasyanov, speaking through an interpreter, said that he had discussed the issue at length Monday with French Prime Minister Lionel Jospin, whose country holds the EU's rotating presidency role until the end of the year.

Kasyanov said massive EU loans are needed to set up the $20 billion partnership.

A spokesman at EIB headquarters in Luxembourg said that the lending agency had not traditionally lend to Russia and any change of policy would have to be requested and approved by EU capitals.

"For the EIB to become operational in Russia on a permanent basis it would require a decision by the 15 EU member states," the spokesman said. "It's a question of member states giving us a mandate and providing a guarantee on lending there."

The World Bank and the European Bank for Reconstruction and Development lend money in Russia, but the country is not included among non-EU countries, which get EIB loans for infrastructure.

Kasyanov said Moscow was keen to build on what was so far an "agreement in principle" on EU energy needs and his government wanted concrete proposals drawn up before EU leaders meet in Sweden in about six months' time.

"We need to invest now in infrastructure," he said, adding that both Jospin and German Chancellor Gerhard Schr?der had "confirmed their interest."

Kasyanov exploited the second day of an official visit to engage in an unusually frank question-and-answer session with French company representatives, promising all of them that he was set on improving the climate for foreign investment in the wake of the country's virtual economic collapse in 1998.

The prime minister, previously Moscow's main finance and debt negotiator, faced a barrage of questions from industrialists who wanted to know when he would lower Russian taxes, cut bureaucracy and make it safer to invest either directly or indirectly in his country.