The European Bank for Reconstruction and Development has opened the first of a series of guarantees totaling $100 million that will help Russian banks finance trade-related lending, especially letters of credit.

Under the Russian Trade Facilitation Program, the EBRD becomes the guarantor of short-term trade finance such as letters of credit issued by a Russian bank.The first such deal was signed Friday with the Stolichny Savings Bank, a private Russian bank in Moscow. The EBRD will guarantee 80 percent of trade credits opened by Stolichny for the benefit of Stolichny's foreign correspondent banks. The total available under the guarantee line is $20 million.

Pierre Mellinger, co-director of the EBRD financial institutions team, said that the guarantee line was designed to contribute to the development of Russia's foreign trade by increase the availability of trade finance in Russia.

Mr. Mellinger said it also was designed to promote selected Russian banks as reliable partners in the international financial community.

Currently, foreign banks will not cooperate with Russian banks on letters- of-credit transactions because of a lack of trust in the Russian financial system. Under a letter of credit, a buyer arranges with his bank to open a credit in the country of a seller who can then obtain payment by showing the bank proof that he has supplied the goods.

In most cases, foreign sellers and banks will only handle letters of credit from Russian banks if they have been guaranteed by a recognized Western bank.

Stolichny Savings Bank said it already has identified five top foreign banks who will handle its letters of credit internationally. It also plans to work through a subsidiary it opened last year the Netherlands, Stolichny Bank International.

Sergey Meshcheryakov, a spokesman for Stolichny Bank, said one big advantage of the EBRD guarantees was that they would substantially lower the cost of trade finance. He said hard currency letters of credit could be opened at rates around 16 percent a year compared to the 35 percent which is common today on the Russian market.

The EBRD, a London multilateral aid and investment bank for the former Soviet bloc, is planning to open similar facilities with up to 10 Russian banks, taking the total value of guarantees to $100 million.