The EBRD is an international financial institution that supports countries in transition to market economies. It was founded in 1991 after the collapse of communism in Eastern Europe and the former Soviet Union. The EBRD has 69 shareholders, including 66 countries, the European Union and the European Investment Bank.
Ukraine is one of the EBRD’s largest countries of operation, with a cumulative investment of over 18 billion euros in 532 projects since 1993. The EBRD focuses on supporting private sector development, promoting green and inclusive growth, enhancing energy security and efficiency, and strengthening governance and resilience.
Ukraine has been facing a protracted armed conflict with Russia since 2014, when Moscow annexed Crimea and backed separatist rebels in the eastern regions of Donetsk and Luhansk. The war has claimed over 14,000 lives, displaced millions of people, damaged infrastructure and disrupted trade and economic activity.
How much support has the EBRD provided to Ukraine during the war?
The EBRD has been a staunch supporter of Ukraine throughout the crisis, providing emergency financing to key sectors such as banking, energy, transport and agribusiness. The EBRD has also helped Ukraine implement crucial reforms to improve its business climate, fight corruption, modernise its public services and diversify its energy sources.
In May 2023, the EBRD confirmed its unwavering commitment to Ukraine at its annual meeting, where it announced that it had earmarked 3 billion euros for Ukraine for 2022-23. This amount is part of a larger package of international assistance that includes loans from the International Monetary Fund (IMF), the World Bank and the European Union.
The EBRD also launched a new initiative called the Ukraine Investment Platform, which aims to attract more private capital to the country by offering co-financing opportunities, risk-sharing mechanisms and technical assistance. The platform was inaugurated in Tokyo with the participation of Japanese Prime Minister Yoshihide Suga and EBRD President Odile Renaud-Basso.
What is the proposal to boost the EBRD’s capital and how will it benefit Ukraine?
The EBRD’s shareholders are considering a proposal to increase the bank’s capital by 3 billion-5 billion euros over the next five years. This would enable the EBRD to expand its lending capacity and support more projects in its regions of operation, especially in countries facing significant challenges such as Ukraine.
According to Renaud-Basso, the capital increase would allow the EBRD to play a key role in Ukraine’s post-war reconstruction, once conditions allow. She said that the bank would focus on rebuilding infrastructure, supporting small and medium-sized enterprises (SMEs), fostering innovation and digitalisation, and promoting green and social transition.
The capital increase would also strengthen the EBRD’s financial resilience and credibility, as well as its ability to leverage additional resources from other sources. The proposal is expected to be approved by the shareholders by the end of 2023.
Conclusion
The EBRD is a vital partner for Ukraine in its efforts to overcome the devastating effects of the war with Russia and achieve sustainable economic development. The bank has provided substantial financial and technical assistance to Ukraine during the crisis and has pledged to continue its support in the future. The proposal to boost the EBRD’s capital by 3 billion-5 billion euros would enable the bank to increase its impact and help Ukraine realise its full potential.
