GFMC: World Bank Not To Release $60 Million Forestry Loan until Russia Meets Green Terms, Interfax Russian News, 9 August 2000

World Bank Not To Release $60 Million Forestry Loan until Russia Meets Green Terms

Interfax Russian News, 9 August 2000

The World Bank does not plan to begin disbursing $60 million under a frozen sustainable woodlands project until Russia meets the environmental conditions of the project, World Bank Vice President for Europe and Central Asia Johannes Linn said in a letter published by the bank.

Linn was responding to letter sent by Russian and American environmentalists to World Bank President James Wolfensohn calling on the bank to halt loans for Russian environmental programs until Russia sets up a new environmental protection committee or restores the previous one, which was abolished by President Vladimir Putin.

The World Bank froze the $60 million loan for pilot woodlands projects, which was approved in May, after Putin issued a decree dissolving the Federal Forest Management Service. The loan was intended for three pilot projects aimed at creating a sustainable forest management system in Leningrad region and Krasnoyarsk and Khabarovsk territories.

Linn said the World Bank is holding consultations with the Russian government on how to restructure this agency as part of a general reform of state administration. The bank cannot begin disbursing the funds for this project until it receives confirmation that all the environmental parameters of the loan are being observed, he said.

However, Linn said he does not think it necessary to suspend all the World Bank’s current projects in Russia that have environmental aspects until the abolished agency is fully restored. The bank does not think this would help the environmental situation in Russia, and moreover the bank does not have the legal grounds to do this, he said.

But Linn backed environmentalists’ plans to discuss issues that concern them Michael Carter, the World Bank director for Russia. He also pledged to keep Wolfensohn informed on further developments in this area.

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