Japanese and Russian state-backed lenders will create a fund to jointly invest in Moscow’s “priority development projects”, as the two countries look to promote business and diplomatic ties, the Nikkei reported. The Japan Bank for International Cooperation and the Russian Direct Investment Fund will form an about 100 billion yen ($901 million) fund, and each will contribute roughly half of the total amount to launch the development projects in 2017, the report said. The fund will invest in projects in fields of medicine, urban development and involve upgrades to manufacturing facilities, the Japanese daily reported. JBIC will form a venture with Russia’s Far East Investment and Export Agency and the Far East and Baikal Region Development Fund to encourage investment in a special economic zone, the report said. JBIC will also extend a new line of credit worth around 30 billion yen to Russia’s largest bank, Sberbank, subject to Western sanctions, the Nikkei reported. Progress on the economic side hinges on making headway on disputed islands off Hokkaido, Reuters reported earlier this month. “The territorial issue and economic cooperation are two sides of a coin,” a Japanese government official had told Reuters. “It’s meaningless if only economic cooperation moves ahead.”