European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) was established to help build a new, post-Cold War era in Central and Eastern Europe. It has since played a historic role and gained unique expertise in fostering change in the region – and beyond – investing more than €145 billion in a total of over 5,700 projects.
The EBRD is committed to furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’. This has been its guiding principle since its creation at the beginning of the 1990s and, new challenges and the welcoming of new countries to the EBRD world notwithstanding, will continue to be its mission in years to come. Uniquely for a development bank, the EBRD has a political mandate in that it assists only those countries ‘committed to and applying the principles of multi-party democracy [and] pluralism’. Safeguarding the environment and a commitment to sustainable energy have also always been central to the EBRD’s activity. A commitment to promote ‘environmentally sound and sustainable development’ was made explicit at its founding. More recently, our Green Economy Transition approach has made climate finance a key measure of the Bank’s performance. EBRD is committed to ensuring that, by 2025, the majority of our business volume is green. The EBRD serves the interests of all its shareholders – 69 countries from five continents plus the European Union and the European Investment Bank – not just those countries which receive its investments (a record €11 billion in 2020). At the same time, the number of EBRD shareholders is still increasing; recent new members include China, India, San Marino and Libya. Indeed, the EBRD is one of only two major multilateral development banks currently expanding its shareholder base.
The financing mechanisms
EBRD is not a retail bank and does not offer commercial products such as mortgages and bank accounts. It operates in 38 economies across three continents. Its operations span dozens of business sectors. The EBRD offers financial products tailored to each client. Prospective clients have to demonstrate that their proposed project or business meets the minimum requirements to be eligible to be considered for EBRD involvement. EBRD financing for private sector projects generally ranges from $5 million to $250 million, 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.
The forms of direct financing EBRD offers are:
- Equity investments
- Guarantees to promote trade
EBRF also supports small and medium-sized enterprises via assistance through financial intermediaries.
EBRD Annual Review 2019