The European Bank for Reconstruction and Development (EBRD) helps to build market economies in 29 countries, from Central, Eastern and South-eastern Europe to Central Asia. It does this by financing investments in these countries and supporting private sector development.
The EBRD was established in 1991 to foster the transition towards open, market-oriented economies and to promote private and entrepreneurial initiatives in those countries from Central Europe to Central Asia that are committed to, and apply the principles of, multi-party democracy, pluralism and market economics.
EBRD membership comprises 61 governments, the European Community and the European Investment Bank (EIB). The European Community is a shareholder (3.05% of the total vote) in the bank. Together with the EIB (which also has 3.05% of the vote) and the Member States, EU 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 Community 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 EBRD is the largest single investor in the regions it covers and mobilises 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 2006, the EBRD provided financing of €4.9 billion to 157 projects divided between the financial sector (45%), the corporate sector (30%), infrastructure (17%) and energy (8%). Investments were made in Russia (38%), the Western CIS and the Caucasus (23%), South-eastern Europe (19%), Central Europe and the Baltic States (14%), and Central Asia (6%).
The European Community is by far the major provider of grant funds for technical assistance and investment co-financing by the bank. During the period 1996-2006 it provided more than €3.6 billion in grant funds or co-financing, including for nuclear safety. The EBRD has played an important role in supporting the EU pre-accession strategy and, more recently, in promoting the European Neighbourhood Policy. Furthermore, where appropriate, the bank is promoting EU norms and standards (notably environmental) through its operations.
EU/EBRD co-operation has developed in all the bank's countries of operations and is now comprehensive and diversified in a variety of sectors (including energy, municipal and environmental infrastructures, SME support, nuclear safety, etc.).
Strengthened co-operation has been established between the EC, EIB and EBRD through a Joint Structure for the preparation of Structural Funds projects in the new Member States (JASPERS), and through a tripartite Memorandum of Understanding that provides for joint financing of projects of significant interest to the EU in the field of infrastructure in Eastern Europe, Southern Caucasus, Russia and Central Asia.
>> COM(2011) 34 final. 2.2.2011. Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL concerning the subscription by the European Union to additional shares in the capital of the European Bank for Reconstruction and Development (EBRD) as a result of the decision to increase this capital