About the European Bank for Reconstruction and Development (EBRD)
Founded in 1991, the EBRD provides project financing mainly for private enterprises, usually together with other commercial lending partners, in countries that are committed to, and apply, democratic principles. It also works with public partners to support privatisation, restructuring and improvement of municipal services. It does this by financing investments, providing business services and getting involved in high-level policy dialogue in these countries to support private sector development.
Membership and EU representation
EBRD membership comprises of 66 governments from five continents, the European Union and the European Investment Bank (EIB). The European Union is a shareholder (3.03% of the total capital) in the bank. Together with the EIB (which also has 3.03% of the capital) and the European Union countries, EU related shareholding reaches 63%.
All the bank’s powers are vested in the Board of Governors which delegates the major tasks to a resident Board of Directors, being responsible for the direction of the bank's general operations and policies. The European Union is represented in the EBRD by a Governor and an Alternate Governor, and by an Executive Director and an Alternate Director on the Board of Directors.
The EU Executive Director attends regular EU coordination meetings with Board Directors from Member States while also consulting Commission and EEAS Services on projects submitted to the EBRD Board for approval. The EU Director formulates his/her voting position on a case-by-case basis taking into account Member States' views as well as advice received from the Commission and EEAS Services with the aim of reflecting the priorities of the EU as a whole.
Operations
EBRD is the largest single investor in its regions of operations, mobilising significant foreign direct investment beyond its own financing. It provides project financing, usually together with commercial partners, mainly to the private sector, for example to banks, industry and businesses, both new ventures and existing companies. It also works with publicly owned companies to support privatisation, the restructuring of state-owned firms and improved municipal services. Each investment must meet the requirements of transition impact, additionality and sound banking principles.
In 2016, the EBRD provided financing of EUR 9.4 billion to 378 projects, covering financial institutions – including support for micro, small and medium sized enterprises via financial intermediaries (33%), the corporate sector – industry, commerce and agribusiness (26%), energy (23%) and infrastructure (18%).
EU/EBRD co-operation
The EBRD is an important strategic partner for the EU, supporting EU policies and objectives such as the European Neighbourhood Policy, the Europe 2020 Strategy for growth and jobs – the European Semester and the EU's response to the migration challenge. Furthermore, where appropriate, the bank is promoting EU norms and standards (notably environmental) through its operations. EU/EBRD co-operation has developed in all of EBRD's countries of operations and is comprehensive and diversified in a variety of sectors (including energy, municipal and environmental infrastructures, SME support and nuclear safety).
The European Union is by far the largest provider of grant funds for technical assistance and investment co-financing by the EBRD. Since the bank’s inception the EU has accounted for 36 per cent of total grants channeled through the EBRD. In 2016 EU contributions amounted to €289 million, representing two thirds of the total donor funding provided to the EBRD that year. EU funding has been increasingly channeled through regional facilities created to combine EU grants with EBRD financing, such as the Neighbourhood Investment Facility (NIF), the Western Balkans Investment Framework (WBIF), the Investment Facility for Central Asia (IFCA) as well as bilateral funding programmes. EBRD projects in EU Member States also benefit from Structural and Cohesion Funds.
The EBRD also cooperates closely with EU institutions in supporting policy dialogue and reforms that strengthen the business environment in the Bank's countries of operations. The EC-EIB-EBRD Tripartite Memorandum of Understanding forms the basis of this cooperation for operations outside the European Union, fostering regular exchange of information and facilitating the identification of co-financing opportunities based on each partner’s comparative advantages.