{"id":22800,"date":"2023-03-13T14:17:00","date_gmt":"2023-03-13T10:17:00","guid":{"rendered":"https:\/\/greenalt-live.w3i.app\/en\/?post_type=story&p=22800"},"modified":"2023-05-29T14:23:17","modified_gmt":"2023-05-29T10:23:17","slug":"ebrd-funds-channelled-to-kremlin-affiliates-why-the-purchase-of-tbilisi-metro-cars-from-a-russian-company-should-not-proceed-as-planned","status":"publish","type":"story","link":"https:\/\/greenalt-live.w3i.app\/en\/blogs\/ebrd-funds-channelled-to-kremlin-affiliates-why-the-purchase-of-tbilisi-metro-cars-from-a-russian-company-should-not-proceed-as-planned\/","title":{"rendered":"EBRD funds channelled to Kremlin affiliates: Why the purchase of Tbilisi metro cars from a Russian company should not proceed as planned"},"content":{"rendered":"\n

This blogpost was originally published<\/a> on Bankwatch.org<\/em><\/p>\n\n\n\n

The European Bank for Reconstruction and Development is providing funding to Tbilisi City Hall to purchase metro cars for the Georgian capital\u2019s metro system from Russian company Metrowagonmash. But Metrowagonmash is not just any Russian company.<\/p>\n\n\n\n

Links with the Kremlin and Russia\u2019s defence industry<\/strong><\/h4>\n\n\n\n

Metrowagonmash is part of Transmashholding, whose shareholders<\/a> Russian oligarchs Iskander Makhmudov and Andrey Bokarev \u2013 are closely linked with the Kremlin and its defence industry. In 2015, Bokarev and Makhmudov became two of the largest government contractors<\/a> in Russia. Until 2017, they, along with Russia\u2019s current deputy defence minister Alexei Krivoruchko, also held shares<\/a> in JSC Kalashnikov Concern, which manufactures<\/a> around 95 per cent of Russia\u2019s guns.  <\/p>\n\n\n\n

After leaving Kalashnikov, the partners continued to provide engines for Russian warships through Metrowagonmash\u2019s sister company, as evidenced in the company\u2019s 2018 and 2019 annual <\/a>reports. In 2021, Transmashholding tried to expand its capabilities in motor production by acquiring Bergen Engines from Rolls-Royce. Citing security risks, the sale was blocked by the government of Norway. In a statement<\/a> issued on 23 March 2021, the Ministry of Justice and Public Security of Norway said: \u2018The engines they [Bergen Engines] produce would have had great military strategic importance for Russia, and it would have strengthened Russia\u2019s military capabilities in a way that would clearly be at odds with Norwegian and allied security policy interests.\u2019 <\/p>\n\n\n\n

Notably, Andrey Bokarev was among<\/a> the billionaires and tycoons that met Russian president Vladimir Putin on the day Russia attacked Ukraine. After the invasion, both Makhmudov and Bokarev were sanctioned by Ukraine, the United Kingdom and New Zealand.  <\/p>\n\n\n\n

The unexplained backtracking of the EBRD and Tbilisi City Hall<\/strong><\/h4>\n\n\n\n

The Tbilisi Metro Project, which is co-financed by the Green Climate Fund, received<\/a> finances from the EBRD in 2020 and the Russian supplier was selected<\/a> in a two-tier tender in 2021. Russia\u2019s invasion of Ukraine changed the context and stalled the official procurement procedures with Metrowagonmash. <\/p>\n\n\n\n

In March 2022, the EBRD suspended<\/a> a transfer to the Russian company due to the risk of sanctions. In November 2022, the mayor of Tbilisi announced<\/a> that the municipality and the EBRD had decided to terminate the contract and were in contact with alternative suppliers. Yet in February 2023, a Tbilisi City Hall representative said<\/a> that Metrowagonmash would remain on as the supplier, as it provided the most affordable tender proposal. The mayor of Tbilisi also stressed<\/a> that he was forced to keep the existing agreement to avoid the imposition of fines and financial sanctions on the state \u2013 although it is not clear who would impose these. The company has agreed to supply<\/a> 44 wagons (11 sets) at a cost of EUR 49.2 million. According to City Hall, the original agreement was renegotiated with an added provision that payment to the company will only go ahead once the metro cars are received. <\/p>\n\n\n\n

We urge the Bank to terminate the contract with Metrowagonmash and find an alternative supplier for the project.<\/p><\/blockquote>\n\n\n\n

Despite our multiple attempts to obtain more information, the EBRD has not yet responded to our queries about the project. <\/p>\n\n\n\n

Bankwatch and Green Alternative call on the EBRD to clarify:<\/strong> <\/h4>\n\n\n\n