Russia won a $100 million (€99 million) loan from the World Bank yesterday to develop its coal sector, and a government official said a renewal of International Monetary Fund (IMF) lending could follow.

The World Bank's decision comes as disbursements under a $4.5 billion loan to Russia from the IMF are being held up amid Western criticism of Moscow's military campaign against Islamic militants in the Chechnya region.

The IMF says approval of its loan requires more action on reforming key sectors of the Russian economy, such as new bankruptcy legislation and moves to reduce the dependence of major companies on barter transactions.

"At the start of January, an IMF mission is expected to arrive [in Moscow], and I think we shall manage to iron out these shortcomings, remove these questions, and go back to normal crediting perhaps in February," Russia's envoy to the Group of Eight industrialised nations Mr Alexander Livshits said.

Finance Minister Mr Mikhail Kasyanov said the World Bank's disbursement opened the door to an additional credit from the Japanese government which provided co-financing.

He also said Russia had fulfilled almost all conditions for a separate World Bank structural adjustment loan, which he said Russia would receive in February. The World Bank has allocated $100 million under the structural adjustment loan for next year.

A World Bank statement said the first $400 million tranche of the coal loan, which aims to establish an efficient and economically viable coal industry, was disbursed in December 1997. Another "social" tranche was disbursed in July 1999.

The social tranches are aimed at supporting closures of heavily loss-making mines, and cushioning the impact of the restructuring on coal-miners, their families and communities.

Following the latest release, the remaining balance on the loan is $250 million, which is expected to be disbursed by mid-2000 if conditions are met.

The World Bank said all relevant conditions for release of the $100 million had been met. But the bank's country director for Russia, Mr Michael Carter, said the situation in Chechnya was still being monitored closely.

"Clearly in reaching this decision, we have had to carefully consider the possible impact of the conflict in Chechnya on Russia's economy," Mr Carter told reporters.