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European Bank for Reconstruction and Development
|Type||International financial institution|
|Industry||international governmental or non-governmental organizations|
|Odile Renaud-Basso (President)
Jacques Attali (First president)
|US$1.1 billion (2016)|
|Total assets||US$59.15 billion (2016)|
|Total equity||US$16.27 billion (2016)|
Number of employees
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 more than 30 countries from Central Europe to Central Asia. Similar to other multilateral development banks, the EBRD has members from all over the world (North America, Africa, Asia and Australia, see below), with the biggest shareholder being the United States, but only lends regionally in its countries of operations. Headquartered in London, the EBRD is owned by 71 countries and two EU institutions, the 71st being Algeria since October 2021. Despite its public sector shareholders, it invests 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. EBRD is also distinct from the Council of Europe Development Bank (CEB).
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 the European Economic Community (EEC, now European Union – EU), after reaching an agreement on the bank's charter, size, and distribution of power among shareholders.
The EBRD is unique among development banks for two reasons. First, it was the first multilateral development bank to have an explicit environmental mandate in its charter (since 1995), and second, in that it will not finance thermal coal mining and coal-fired electricity generation due to their environmental impact.
The following table shows the development of investment volume into the Green Economy Transition (GET) approach, in support of the Paris climate goals.
|Year||Total investment||GET investment||Ratio||Source|
|2016||9.4 billion EUR||2.9 billion EUR||31 %|||
|2017||9.7 billion EUR||4.1 billion EUR||43 %|||
|2018||9.5 billion EUR||3.3 billion EUR||36 %|||
|2019||10.1 billion EUR||4.6 billion EUR||46 %|||
The EBRD had pledged, prior to 2015 Paris Agreement, to dedicate above 40 per cent of its financing to green investment by 2020. This goal was accomplished for the first time in 2017. With Russia actually being the biggest donor to an NDEP Support Fund for the environments inside the bank, with total contributions amounting to €60 million. €5 million was donated by Russia in the same year of 2015.
The EBRD was founded to support countries of the former Eastern Bloc in the process of establishing their private sectors. 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 privatisation, as advocated by the WTO since the 1980s 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 "defence-related activities, the tobacco industry, selected alcoholic products, substances banned by international law and stand-alone gambling facilities."
Environmentally harmful projects
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. Among the contested projects are the Ombla power plant in Croatia, the Kumtor Gold Mine in Kyrgyzstan, and the Šoštanj lignite power plant in Slovenia.
The EBRD's activities in the Balkans have attracted particular controversy and criticism, especially when they have centered on national parks or free-flowing rivers. This has often involved the actualized or proposed construction of hydroelectric dams and road infrastructure. Indeed, a 2017 report alleged deficiencies in monitoring and mitigation measures that had been designed to lessen the environmental impact of dam projects financed by the EBRD, while, in March 2018, outdoor clothing label Patagonia helped launch The Dam Truth campaign, which directly requests international banks including the EBRD to "stop investing in the destruction of Europe's last wild rivers".
In 2011, the EBRD approved a €65 million loan to ELEM, the Macedonian electricity utility, for a dam at Boskov Most. The Standing Committee of the Bern Convention requested immediate suspension of the project, with reference to the high biodiversity of the area and its importance as a core reproductive area for the Balkan lynx, one of the most endangered mammals on the planet. In January 2017, the bank cancelled the loan saying the "conditions for disbursement were not met."
Again in North Macedonia, the EBRD was criticised by environmentalists after plans were announced to bisect National Park Galičica in the UNESCO Ohrid-Prespa Transboundary Biosphere Reserve with an A3 express road, which would have required certain zones of protection in the national park to be downgraded. Scientists from North Macedonia and across the world signed a declaration in opposition to this and other projects proposed for the Ohrid-Prespa region, a message that was reinforced by a Joint Reactive Monitoring Mission from the World Heritage Centre, ICOMOS and the IUCN, which requested total cancellation of proposed A3 road sections. This recommendation was underlined by the World Heritage Committee at its 41st session in Kraków. Eventually, in February 2018, the Republic of North Macedonia abandoned plans for the road, redirecting the EBRD's funds to other infrastructure projects.
2014 sanctions against Russia
The EBRD announced on 23 July 2014 that it would suspend new investment projects in Russia, following an earlier declaration by the European Council. The European Council declaration was made in the context of the 2014 pro-Russian unrest in Ukraine. As of 2014[update] 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. The bank stated that it will continue to manage on-going projects in Russia. Despite denying Russia new funds the EBRD continues to insist on its 6.1% of ownership in the Moscow Stock Exchange, seeking profits from Russia with the Privatisation of the Soviet economy.
Azerbaijan's oil and gas sector
Building Southern Gas Corridor, European countries and companies support gas export from Azerbaijan and contribute to finance Azerbaijan's government. The Aliyev regime is considered by many NGOs and watchdogs organizations as repressive and activists and journalists are regularly arrested on false charges and imprisoned. The International Federation for Human Rights (FIDH) wrote in 2015, that "for more than a decade Azerbaijan has made shameless use of caviar diplomacy to charm European governments, its most important oil and gas clients". The CEE BankWatch warns that "Developing Shah Deniz stage 2 and the Southern Gas Corridor is likely to cement further the oppressive structures of the Aliyev government".
The EBRD has invested over 3 billion euros ($3.5 billion) in 177 projects in Azerbaijan. The EBRD approved three loans for the Shah Deniz gas field (US$200 million, US$250 million and US$100 million) as well as a US$500 million loan for the Trans-Anatolian gas pipeline (TANAP), and stated its financial support to the Trans Adriatic Pipeline (TAP) could amount to EUR 1.2 billion.
The following presidents have served the EBRD to date (as of 2020[update]).
- Jacques Attali: April 1991 – June 1993
- Jacques de Larosière: September 1993 – January 1998
- Horst Köhler: September 1998 – April 2000
- Jean Lemierre: July 2000 – July 2008
- Thomas Mirow: July 2008 – July 2012
- Suma Chakrabarti: July 2012 – July 2020
- Odile Renaud-Basso: 2020 – present
Recipient countries of investments
The following countries are recipients of funds: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Estonia, Egypt, Georgia, Greece, Hungary, Jordan, Kazakhstan, Kosovo, Kyrgyzstan, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Morocco, North Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Tunisia, Turkey, Turkmenistan, Ukraine and Uzbekistan.
The EBRD publishes its tenders and contracts on its own website and in Development Business, a publication launched in 1978 by the United Nations with the World Bank and other development banks.
The following countries contribute in financing the EBRD: Australia, Austria, Belgium, Canada, China, Cyprus, Czech Republic (receiving member until 2007-12-31), Denmark, Egypt, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, India, Japan, Luxembourg, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Portugal, Russian Federation, South Korea, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America as well as the European Union and the European Investment Bank.
|country||date joined||capital subscription|
|Albania||18 December 1991||€30010000|
|Algeria||19 October 2021||€2030000|
|Armenia||7 December 1992||€14990000|
|Australia||30 March 1991||€300140000|
|Austria||28 March 1991||€684320000|
|Azerbaijan||25 September 1992||€30020000|
|Belarus||10 June 1992||€60020000|
|Belgium||10 April 1991||€684320000|
|Bosnia and Herzegovina||17 June 1996||€50710000|
|Bulgaria||28 March 1991||€237110000|
|Canada||28 March 1991||€1020490000|
|China||15 January 2016||€29000000|
|Croatia||15 April 1993||€109420000|
|Cyprus||28 March 1991||€30010000|
|Czech Republic||1 January 1993||€256110000|
|Denmark||28 March 1991||€360170000|
|Egypt||28 March 1991||€21010000|
|Estonia||28 February 1992||€30010000|
|European Investment Bank||28 March 1991||€900440000|
|European Union||28 March 1991||€900440000|
|Finland||28 March 1991||€375180000|
|France||28 March 1991||€2556510000|
|Georgia||4 September 1992||€30010000|
|Germany||28 March 1991||€2556510000|
|Greece||29 March 1991||€195080000|
|Hungary||28 March 1991||€237110000|
|Iceland||29 May 1991||€30010000|
|India||11 July 2018||€9860000|
|Ireland||28 March 1991||€90040000|
|Israel||28 March 1991||€195080000|
|Italy||28 March 1991||€2556510000|
|Japan||2 April 1991||€2556510000|
|Jordan||29 December 2011||€9860000|
|Kazakhstan||27 July 1992||€69020000|
|Kosovo||17 December 2012||€5800000|
|Kyrgyzstan||5 June 1992||€21010000|
|Latvia||18 March 1992||€30010000|
|Lebanon||17 July 2017||€9860000|
|Libya||16 July 2019||€9860000|
|Liechtenstein||28 March 1991||€5990000|
|Lithuania||5 March 1992||€30010000|
|Luxembourg||28 March 1991||€60020000|
|Malta||28 March 1991||€2100000|
|Mexico||28 March 1991||€45010000|
|Moldova||5 May 1992||€30010000|
|Mongolia||9 October 2000||€2990000|
|Montenegro||3 June 2006||€5990000|
|Morocco||28 March 1991||€24640000|
|Netherlands||28 March 1991||€744350000|
|New Zealand||19 August 1991||€10500000|
|North Macedonia||21 April 1993||€17620000|
|Norway||28 March 1991||€375180000|
|Poland||28 March 1991||€384180000|
|Portugal||5 April 1991||€126050000|
|Romania||28 March 1991||€144070000|
|Russia||9 April 1992||€1200580000|
|San Marino||7 June 2019||€2030000|
|Serbia||19 January 2001||€140310000|
|Slovakia||1 January 1993||€128070000|
|Slovenia||23 December 1992||€62950000|
|South Korea||28 March 1991||€300140000|
|Spain||28 March 1991||€1020490000|
|Sweden||28 March 1991||€684320000|
|Switzerland||29 March 1991||€684320000|
|Tajikistan||16 October 1992||€21010000|
|Tunisia||29 December 2011||€9860000|
|Turkey||28 March 1991||€345150000|
|Turkmenistan||1 June 1992||€2100000|
|Ukraine||13 April 1992||€240110000|
|United Arab Emirates||23 September 2021||€2030000|
|United Kingdom||28 March 1991||€2556510000|
|United States||28 March 1991||€3001480000|
|Uzbekistan||30 April 1992||€44120000|
|71+2 total||(28 March 1991)||€29748890000|
The EBRD offers loan and equity finance, guarantees, leasing facilities, trade finance, and professional development through support programs. Direct investments in equity range from 5% to 25% stakes and €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.
In 2015, the EBRD invested a record amount in the Central Asian region. The total investment in 2015 rose by 75% reaching €1,402.3 billion. Kazakhstan reported the largest total volumes of investment reaching €790 million in 2015.
The EBRD invested $761 million in 29 private and public sector projects in Kazakhstan in 2019. Most of the projects are involved in public infrastructure and renewable energy.
In the period 2009 - 2020, the ERD has invested almost €12.5 billion in various sectors of the Turkey's economy, with almost all investment being in the private sector. The EBRD's Turkey portfolio is the largest among the economies where the Bank invests.
In 2020, the ERD lent more than $1.18 billion (€1 billion) to local Turkish firms. It also lent $25 million to the Turkish private lender Alternatif Bank for on-lending to small and medium-sized enterprises and firms affected by the COVID-19 pandemic in Turkey.
Since its founding in 1991, so far only the Czech Republic has graduated from borrower to shareholder within EBRD, in 2007, but re-joined the borrower status in 2021.
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- Green Climate Fund
- Sustainable development
- Irakli Kovzanadze, chairman of the Task Force on corporate governance of banks in Eurasia (2007–2009)
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