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. Last Updated: 07/27/2016

Business in Brief

Baku-Ceyhan Loan

The Moscow Times

A member organization of the World Bank Group last week gave signs that it would be willing to participate in project financing of the Baku-Ceyhan pipeline if funding by the U.S. and Azeri governments falls through.

International Finance Corp. representatives said a decision will be made after oil companies promise to dedicate a certain amount of their oil production to the pipeline, Azeri news service Azer-Press reported.

The 1,730 kilometer pipeline will start at Baku, Azerbaijan, cross through Tbilisi, Georgia, and then terminate at the Turkish port of Ceyhan. It is estimated to cost $2.4 billion.

The United States has thrown its support behind the Baku-Ceyhan route, calling it more stable because it bypasses Russia. However, preliminary studies have shown that at least 6 billion barrels of reserves would be needed for the Baku-Ceyhan pipeline to operate at full capacity. Currently, Azerbaijan can only offer 4 billion barrels, making the project economically unfeasible, according to several estimates.

$700M Budget Deficit


Russia ran a budget deficit in February of 20.1 billion rubles ($702.3 million), or 3.4 percent of gross domestic product, compared with a surplus of 1.3 percent of GDP in January, the Finance Ministry said Sunday.

In a statement on its web site (, the ministry said it estimated Russia posted a federal budget deficit of 14.5 billion rubles, or 1.2 percent of GDP, in the first two months of 2001.

February budget revenues amounted to 105.9 billion rubles, 6 percent above target for the month, while spending amounted to 126 billion rubles, or 87.4 percent of planned spending.

Revenues were 73.4 billion rubles in February 2000.

Tax revenues last month amounted to 62.8 billion rubles, or 10.7 percent of GDP, up from 45 billion rubles, or 9.8 percent of GDP, in February 2000.

Customs collections amounted to 38.4 billion rubles, or 6.5 percent of GDP, up from 25.8 billion rubles, or 5.6 percent of GDP, in February 2000.

Nigerian Steel Mill

The Associated Press

Russian officials agreed last week to complete a disputed, multibillion-dollar steel mill in Nigeria that was designed by Soviet authorities in 1979, but has languished unfinished for years.

Officials from the Ajaokuta plant and Russia’s Tyazhpromexport company signed the deal in Moscow during a visit by Nigerian President Olasegun Obasanjo, said the press office of the Nigerian Embassy. It said the mill should be finished in two or three years, but did not give the cost of the deal.

Nigeria is already heavily indebted to Russia for initial construction of the mill, which is reported to have cost $5 billion and has come to symbolize government waste and corruption in Africa’s most populous nation.

CB: Keep Forex Rules


Central Bank Chairman Viktor Gerashchenko said in an interview last week that it was too early to reduce the percentage of foreign currency receipts that Russian exporters are required to sell in exchange for rubles.

Russian exporters currently have to sell up to 75 percent of their foreign exchange revenues for rubles at a special daily session on the Moscow Interbank Currency Exchange. The Central Bank is the major buyer.

This rule was introduced after the 1998 financial crisis to support the ruble. But last year’s strong economic recovery sparked talk of liberalization.

The government has considered the issue, but Gerashchenko, hoping to build up Central Bank reserves and keep the ruble stable, was cautious. "There should be no hurry in this matter," he told Kommersant newspaper. The Finance Ministry