Japan and Russia will create a ¥100bn (US$900mn) fund to jointly invest in development projects in Russia, as the two countries seek to promote economic and diplomatic ties.

The Japan Bank for International Cooperation (JBIC) and the Russian Direct Investment Fund (RDIF) will each contribute roughly half of the total amount and plan to launch the fund in 2017, according to local media reports in both countries.

Financing is expected to go to projects in medicine, urban development and involve upgrades to manufacturing facilities.

The fund is the latest in a series of actions, as recently reported by GTR, taken by state-owned JBIC to boost ties with Russia, stretching back to last year.

Tokyo aims to use greater economic co-operation to aid negotiations with Russia over disputed islands off Hokkaido, but Russia has been more tentative in stepping into territorial talks.

Japan’s Prime Minister Shinzo Abe is due a visit from Russian President Vladimir Putin on December 15 and 16. Abe has said he hopes to discuss the issue candidly with Putin during the visit.