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Logo of the EBRD

Founded in 1991, the European Bank for Reconstruction and Development (EBRD) uses the tools of investment to help build market economies and democracies in 27 countries from central Europe to central Asia. Its mission was to support the formerly communist countries in the process of establishing their private sectors.¹

Headquartered in London, the EBRD is owned by 61 countries and two intergovernmental institutions. Despite its public sector shareholders, it invests mainly in private enterprises, usually together with commercial partners.

EBRD provides project financing for banks, industries and businesses, both new ventures and investments in existing companies. It also works with publicly owned companies to support privatization, restructuring state-owned firms and improvement of municipal services.

European Bank for Reconstruction and Development member states      Members, only financing      Members, recipients of investments

The EBRD’s mandate stipulates that it must only work in countries that are committed to democratic principles. The EBRD is directed by its founding agreement to promote, in the full range of its activities, environmentally sound and sustainable development.

Erik Berglof is the Chief Economist.

The following countries are members and recipients of investments:² Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Macedonia, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

The following countries are financing members only: Australia, Austria, Belgium, Canada, Cyprus, Czech Republic (receiving member until 2007-12-31³), Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Portugal, South Korea, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America.

Two European Union institutions are also financing members: the European Community and the European Investment Bank.

It is expected that after the end of investments in the Czech Republic, operations will end in the seven remaining EU member states (Bulgaria, Estonia, Hungary, Poland, Romania, Slovakia, Slovenia) by 2010.⁴

Requirements for EBRD financing

EBRD financing for private sector projects generally ranges from 5 million to 250 million euros, in the form of loans or equity. The average EBRD investment is €25 million.

Smaller projects may be financed through financial intermediaries or through special programmes for smaller direct investments in the less advanced countries.

To be eligible for EBRD funding, the project must:

• be located in an EBRD country of operations
• have strong commercial prospects
• involve significant equity contributions in-cash or in-kind from the project sponsor
• benefit the local economy and help develop the private sector
• satisfy banking and environmental standards.

Project structure

The EBRD tailors each project to the needs of the client and to the specific situation of the country, region and sector. The EBRD typically funds up to 35 per cent of the total project cost for a greenfield project or 35 per cent of the long-term capitalisation of the project company. The Bank requires significant equity contributions from the sponsors, which must equal or be greater than the EBRD’s investment.

There must be additional funding from the sponsors, other co-financiers or generated through the EBRD’s syndications programme.

Sectors supported by the EBRD

The EBRD finances projects in most sectors.These include:

• agribusiness
• energy efficiency
• financial institutions
• manufacturing
• municipal and environmental infrastructure
• natural resources
• power and energy
• property and tourism
• telecommunications, information technology and media
• transport

EBRD Presidents

• April 1991 – June 1993: Jacques Attali (French)
• September 1993 – January 1998: Jacques de Larosière (French)
• September 1998 – April 2000: Horst Kohler (German)
• July 2000 – July 2008: Jean Lemierre (French)
• July 2008 - Present: Thomas Mirow (German)

Investments

The bank invested 1.2 billion euros in projects during 1992, increasing to 5.6 billion during 2007.⁵⁶ In response to the 2008 global financial crisis, it announced plans in early 2009 to invest 7 billion euros.⁷

Notes

External links

• EBRD web site
• Bank Information Center
• US Commercial Service Liaison office to EBRD
• Central and Eastern European Bankwatch network of civil society groups monitoring and lobbying on public Bank projects and policies

Wikipedia content modification information:

• This page was last modified on 7 January 2009, at 13:08.

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