European Bank for Reconstruction and

Development
European Bank for Reconstruction and
Development

Founded

1991

Type

International financial institution

Location

London

President

Sir Suma Chakrabarti

Employees

1500

Mission

development bank

Website

ebrd.com

The European Bank for Reconstruction and Development (EBRD) is an international financial
institution founded in 1991. As a multilateral developmental investment bank, the EBRD
uses investment as a tool to build market economies. Initially focused on the countries of the
former Eastern Bloc it expanded to support development in 30 countries from central Europe to
central Asia. Besides Europe, member countries of the EBRD are from all 5 continents (North
America, Africa, Asia and Australia see below), with the biggest shareholder being the United States,
so the name is somewhat of a misnomer. Headquartered in London, the EBRD is owned by 64
countries and two EU institutions. Despite its public sector shareholders, it invests mainly in private
enterprises, together with commercial partners.
The EBRD is not to be confused with the European Investment Bank (EIB), which is owned by EU
member states and is used to support EU policy.
Contents
[hide]

1 History

2 Mission

3 Criticism

4 2014 sanctions against Russia

5 Structure
o

5.1 Presidents

5.2 Recipient countries of investments

5.3 Financing members

6 Financing
o

6.1 Outcomes

7 See also

8 References

9 External links

History[edit]

EBRD headquarters in London

The EBRD was founded in April 1991 during the dissolution of the Soviet Union by representatives of
40 nations from 3 continents and two European institutions, the European Investment Bank (EIB)
and, after reaching agreement on the bank's charter, size, and distribution of power among
shareholders.[1]

In 2006, EBRD stated it would cease spending in the Baltic and central European nations by 2010,
and would shift funding to Russia,Ukraine, Armenia, Kazakhstan and Uzbekistan.[2] In 2010, due to
the Great Recession, this process was postponed until 2015.[3][page needed]

Mission[edit]
The EBRD was founded to support countries of the former Eastern Bloc in the process of
establishing their private sectors.[4] To that end, it offers "project financing" for banks, industries and
businesses, for new ventures or existing companies. It works with publicly owned companies to
support their privatization, as advocated by the WTO since the 1980s [5] and "improvement of
municipal services".
The EBRD mandates to work only in countries that are "committed to democratic principles". It
promotes "environmentally sound and sustainable development", and does not finance "defenserelated activities, the tobacco industry, selected alcoholic products, substances banned by
international law and stand-alone gambling facilities".[citation needed]

Criticism[edit]
Some NGOs have criticized the EBRD for financing projects they consider to be environmentally and
socially harmful. Although it has increased its investments into energy efficiency and sustainable
energy in recent years, these NGOs consider the bank continues to diminish the impacts of green
investments by financing carbon-intensive development such as coal, oil and gas production,
transportation and generation, motorways, and airports.[6][7] Among the contested projects are
the Ombla power plant inCroatia,[8][9] the Kumtor Gold Mine in Kyrgyzstan, and
the otanj lignite power plant in Slovenia.[6]
NGOs have criticized the EBRD on the lack of progress the EBRD makes in its main mission, the
transition towards open and democratic market economies.[10][11] For example, the EBRD reported
that 67% of the people in its countries of operation indicated that corruption was the same or worse
in 2006 compared to 1989.[12]

2014 sanctions against Russia[edit]

The EBRD announced on 23 July 2014 that it would suspend new investment projects in Russia,
following an earlier declaration by the European Council.[13] The European Council declaration was
made in the context of the 2014 pro-Russian unrest in Ukraine.[14] As of 2014 Russia has been the
biggest funding recipient of all countries. In 2013, the Russian Federation received 1.8 billion for
investments from the EBRD and 1 billion from the EIB. Russia employed the funds to finance a
variety of projects like pipeline valves, property acquisitions, and a loan to a hypermarket chain. Two
Russian projects were awaiting funding from the EBRD: a 300 million plan for promoting energy
efficiency,and a $180 million loan to lease agricultural and forestry equipment. [15][16] The bank stated
that it will continue to manage on-going projects in Russia.[13]

Structure[edit]

European Bank for Reconstruction and Development member states

Recipient countries of investments
Financing members

Presidents[edit]
The following presidents have served the EBRD to date (as of 2012). [17]

Jacques Attali (1991-1993)

Jacques de Larosire (1993-1998)

Horst Khler (19982000)

Jean Lemierre (2000-2008)

Thomas Mirow (20082012)

Suma Chakrabarti (2012 present)

Recipient countries of investments[edit]

The following countries are recipients of funds: Albania, Armenia, Azerbaijan, Belarus, Bosnia and
Herzegovina, Bulgaria, Croatia, Cyprus, Estonia, Georgia, Hungary, Jordan, Kazakhstan, Kosovo,Ky
rgyzstan, Latvia, Liechtenstein, Lithuania, Macedonia, Moldova, Mongolia, Montenegro, Poland,Rom
ania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkey, Turkmenistan, Ukraine andUzbekistan.[18]
After the Arab Spring, the EBRD added four countries in the Middle East and North Africa region to a
special multi-donor account: Egypt, Jordan, Morocco, and Tunisia. These countries were expected to
become full recipient countries in the future.[19]
The EBRD publishes its tenders and contracts in Development Business. a publication launched in
1978 by the United Nations with the World Bank and other development banks.[20]

Financing members[edit]
The following countries contribute in financing the
EBRD: Australia, Austria, Belgium, Canada, Cyprus, Czech Republic (receiving member until 200712-31[21]), Denmark, Egypt,Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, L
uxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Portugal, South

Korea,Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America as
well as the European Community and the European Investment Bank.[citation needed]

Financing[edit]
This section does not cite any references or sources. Please help improve this section
by adding citations to reliable sources. Unsourced material may be challenged
and removed. (April 2015)
The EBRD offers loan and equity finance, guarantees, leasing facilities, trade finance, and
professional development through support programs. Direct investments range from 5 million to
230 million. Smaller projects are financed both directly by the EBRD and through "financial
intermediaries". The EBRD website states it has helped finance over 1 million smaller projects by
supporting local commercial banks, micro-business banks, equity funds and leasing facilities.
To be eligible for EBRD funding, "a 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 and satisfy banking
and environmental standards."
The EBRD finances projects in sectors including agribusiness, energy efficiency, financial
institutions, manufacturing, municipal infrastructure, also known as public works(which includes
transport, schools, water supply, waste disposal, and pollution control services), natural resources,
power and energy, property, telecommunications, tourism, transport,information technology.[citation needed]

Outcomes[edit]
Since its founding in 1991, so far only the Czech Republic has graduated from borrower to
shareholder within EBRD, in 2007.[22]

See also[edit]

Ukeep

Development Finance Institution

References[edit]
1.

Jump up^ "The European Bank for Reconstruction and Development". Overseas
Development Institut briefing paper. Overseas Development Institute. n.d. Retrieved 28 June 2011.

2.

Jump up^ "Business - EU-8 to Graduate by 2010 as EBRD Moves Focus East". The St.
Petersburg Times. Bloomberg News. 12 May 2006. Retrieved 7 January 2009.

3.

Jump up^ EBRD (11 February 2010). "Background Material On Capital Resources Review 4
2011-15" (PDF).

4.

Jump up^ "About the EBRD". European Bank for Reconstruction and Development. Archived
fromthe original on 2008-08-22. Retrieved 2009-01-07.

5.

Jump up^ Muir, Russell; Soba, Joseph. 1995. State-Owned Enterprise Restructuring : Better
Performance Through the Corporate Structure and Competition. World Bank, Washington,
DC. https://openknowledge.worldbank.org/handle/10986/11649

6.

^ Jump up to:a b "The European Bank for Reconstruction and Development". Central and
Eastern European (CEE) Bankwatch Network. 2011.

7.

Jump up^ Goldberg; et al. (1995). "The European Bank for Reconstruction and
Development: An Environmental Progress Report". Center for International Environmental Law.

8.

Jump up^ Mikaela Gavis (January 2013). "Reviewing the evidence: how well does the
European Development Fund perform?". Overseas Development Institute (ODI).

9.

Jump up^ "HEP and EBRD cancel loan agreement for Ombla power plant". Daily.tportal.hr.
27 May 2013. Retrieved 6 June 2013.

10.

Jump up^ "Our mission". European Bank for Reconstruction and Development.

11.

Jump up^ "Are we nearly there yet? Dilemmas of transition after 20 years of EBRD's
operations".CEE Bankwatch Network. May 2011.

12.

Jump up^ "Life in Transition: A survey of people's experiences and attitudes" (PDF). London,
United Kingdom: European Bank for Reconstruction and Development. 2007.

13.

^ Jump up to:a b "EBRD STATEMENT ON OPERATIONAL APPROACH IN RUSSIA". EBRD.

23 July 2014. Retrieved 28 July 2014.

14.

Jump up^ "European Council conclusions on external relations (Ukraine and Gaza)" (PDF).
Council of the European Union. 16 July 2014. Retrieved 26 July 2014.

15.

Jump up^ "Leaked: EU to cut loans and investment for Russia, punish Crimea". TV-Novosti.
16 July 2014.

16.

Jump up^ Alec Luhn (16 July 2014). "EU poised to cut funding to Russia and widen
sanctions over Ukraine conflict". The Guardian.

17.

Jump up^ "Key Dates (EBRD - Basic facts)". European Bank for Reconstruction and
Development. Archived from the original on October 14, 2009. Retrieved 2009-12-28.

18.

Jump up^ http://www.iamabanker.in/

19.

Jump up^ SEMED factsheet (PDF)

20.

Jump up^ United Nations Development Business' website

21.

Jump up^ Czech Republic homepage [EBRD - Countries]

22.

Jump up^ "Czech Republic graduates from EBRD, Press release 23 October 2007".
Retrieved2011-01-25.