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The Head of EDB: The development of trans-border infrastructure is key to success of the Eurasian integration project

The Head of EDB: The development of trans-border infrastructure is key to success of the Eurasian integration project

18 June 2015

St. Petersburg, 18 June 2015. One of the main objectives of the Eurasian Economic Union (EAEU) is to develop trans-border infrastructure inside it and on its western, eastern and southern borders. This will make it possible for the EAEU to find its niche in the international division of labour. Dmitry Pankin, Chairman of the Management Board at Eurasian Development Bank (EDB), said this at the session The Eurasian Economic Union: A New Compass in Global Economic Relations at the Saint Petersburg International Economic Forum (SPIEF) today.

“In this context trans-border infrastructure projects have significant effects in terms of ensuring transit through the EAEU and the movement of goods, services and labour,” he emphasised. However, these require significant investment and “long” money. Dmitry Pankin believes that development banks are an effective instrument for this. “The EAEU should avail itself of the opportunities offered by these institutions to make its own economic and technological breakthrough,” he said.

Dmitry Pankin pointed out that there were three key types of infrastructure to focus on: transport (rail and motor), energy and telecommunications.

Speaking about energy infrastructure in the EAEU, Dmitry Pankin emphasised the need for creating common electricity markets and investing in trans-border exports. He said, in particular, that, “The CIS countries have inherited from the Soviet Union common engineering standards and developed trans-border power transmission grids, which can become the basis for international cooperation. This is a great advantage. Yet, we have a disadvantage as well: the single market in electricity has been lost.” Dmitry Pankin believes that a common electricity market should be restored in the EAEU and that investment in electricity export schemes should be made.

The head of EDB stated that energy was one of the most important and attractive areas for cooperation in the SCO too. He emphasised that the SCO countries boasted huge energy resources: 25% of global oil reserves, over 50% of global gas reserves, 35% of coal, 50% of uranium, and almost 50% of hydropower reserves. The region with its potential and energy resources can become a global growth point. However, the SCO member countries are implementing projects, which usually remain bilateral, and do not relate to the SCO as an integration institution.

Dmitry Pankin also stated that the use of energy potential, in the hydropower sector in particular, could promote energy cooperation in the SCO and increases in the production of environmentally friendly electric power.

“This would make it possible for the SCO member countries to save expensive non-renewable resources, to significantly improve their energy security, and to foster economic advancement as a whole,” he emphasised. “It is obvious that these projects should envisage the uniting of the SCO countries in a single electric power supply system through the creation of a common electricity market.”

Dmitry Pankin also said that EDB was ready to participate directly in the preparation and fulfilment of multilateral projects in the energy sector and reminded that it accounted for almost a third of the Bank’s current investment portfolio.

Additional Information

Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.