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Tuesday, June 18, 2013
Bank warns of billions in losses from Sochi Games

Associated Press

MOSCOW -- Russia's state development bank says it stands to lose billions of dollars from financing unprofitable construction projects for the 2014 Sochi Olympics.

VEB chairman Vladimir Dmitriev said in a recent interview with the Gazeta.ru news portal that of the 19 projects the bank is funding, at least eight would fail to turn a profit. The eight projects are receiving about $5.2 billion, and Dmitriev expressed doubts the money will be repaid.

Among those receiving the credits are companies owned by metals tycoons Vladimir Potanin and Oleg Deripaska, and also state-owned Sberbank and Gazprom. All four have asked the government for help in covering some of their losses.

The overall bill for the Winter Games stands at $51 billion, making them by far the most expensive Olympics in history.