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About the EBRD

 

The EBRD (European Bank for Reconstruction and Development) is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. The Bank is owned by 69 countries as well as the EU and the EIB. EBRD investments are aimed at making the economies in its regions competitive, inclusive, well-governed, green, resilient and integrated.

 

History of the EBRD

The EBRD was set up in haste to meet the challenge of an extraordinary moment in Europe’s history, the collapse of communism in its East. In fact, a mere 18 months elapsed between the first mooting of the idea of a European development bank, by President François Mitterrand of France, in October 1989 and its opening for business with headquarters in London in April 1991.

 

Urgency and the ability to respond to momentous events swiftly and decisively, whether it be the end of the Soviet Union, financial crises, the ‘Arab Uprising' or the coronavirus pandemic have been among the EBRD’s hallmarks from the start.

 

During the frenetic years of the early 1990s the EBRD’s emphasis on the private sector as the main driver for change in Central and Eastern Europe was vindicated many times over. This was the period that established the EBRD’s reputation as an expert on transition to the open market.

It was heavily involved in areas such as banking systems reform, the liberalisation of prices, privatisation (legalisation and policy dialogue) and the creation of proper legal frameworks for property rights, all vital ingredients for change.

 

This period also witnessed the start of the EBRD's work to help safeguard and transform the site of the Chernobyl disaster in Ukraine and its involvement in nuclear safety elsewhere as well.

 

Expanding the EBRD's regions of operations

 

Reforms were supported by sound advice, training and technical expertise, and supplemented by major investments in the private and public sectors. With domestic capital on its own insufficient to finance transition, the EBRD helped to bring in external capital from both private and public sources.

 

Such experience has stood the EBRD in good stead when it has expanded its original region of operations - four times already - into new countries such as Mongolia (2006), Turkey (2009), Egypt, Jordan, Morocco, Tunisia and Kosovo (in 2012), Cyprus (2014), Greece (2015) and Lebanon (2017).

 

It is currently active in nearly 40 countries from central Europe to central Asia and the southern and eastern Mediterranean, plus the West Bank and Gaza.

The Czech Republic is the only member to have ‘graduated’ from the EBRD and no longer receives investment from the Bank.

 

The EBRD’s understanding of how a market economy works and engagement with other international financial institutions also allowed us to play a crucial role in stabilising its regions and planning for recovery after the shock of the global financial crisis in 2008.

 

Part of our response to that crisis was a substantial and rapid increase in the volume of our operations. That increase continued throughout the second decade of the century, despite a new operational approach to Russia, previously the EBRD’s largest country by business volume, under which, following guidance from a majority of our Directors, the Bank is no longer undertaking new business there.

 

While the Bank remains as committed to fulfilling its original mandate as ever, its understanding of what the transition to market economics actually entails has evolved in the light of recent history.

 

At the beginning of 2017, for example, we began applying a new transition concept which defines a well-functioning market economy as more than just competitive; it should be inclusive, well-governed, green, resilient and integrated as well.

And over the nearly 30 years of our existence, we have become more convinced than ever before that financing projects alone cannot bring about the changes our countries need. They need help with policy reform and in creating an enabling investment climate as well.

 

The EBRD's unique mandate

 

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. In 2019 such finance accounted for 46 per cent of its total annual investment, surpassing the 40 per cent target we had set ourselves to reach by the end of 2020.

 

The coronavirus pandemic of 2020 was a huge challenge to the countries where the EBRD works, all our shareholders and the Bank itself. The EBRD responded by committing all its activity in 2020 and 2021 - expected to amount to €21 billion = to countering its economic impact.

 

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 (€10.1 billion in 2019). 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.

 

However many shareholders the EBRD has, we all stand to gain from the EBRD regions' closer and deeper integration into the global economy and their economies’ continued progress on their transition journeys. Today, the Bank is doing more than ever before - across three continents - to help them on their way.