MICROCAPITAL BRIEF: EBRD, USAID to Cooperate on Boosting Private Sector Development in Regions Including Eurasia, Middle East, North Africa

The European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, England, and the United States Agency for International Development (USAID), a government agency that provides international economic and humanitarian assistance, recently signed a “Framework for Cooperation” detailing a plan to boost private sector development in regions in which both organizations operate. The Framework outlines how EBRD and USAID teams will collaborate both in-country and between their headquarters on issues including the following: (1) financial sector and capital market strengthening; (2) trade and regional integration; (3) infrastructure improvement; (4) energy security and climate change; and (5) promoting civic engagement. The Regions involved in the initiative include Central Asia and the Caucasus, the Western Balkans and the southern and eastern Mediterranean region.

As part of the joint action plan, USAID recently provided USD 350,000 to support EBRD’s development program in Georgia, where EBRD has already invested EUR 2.9 million (USD 3.2 million) in the form of loans, equity investments and guarantees for small and medium-sized enterprises (SMEs) working in infrastructure or the financial, telecommunications or energy sectors. EBRD provides funding both through financial intermediaries and directly to SMEs.

During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion). USAID reported a total of USD 27.1 billion in budgetary resources for 2015.

By Michelle Dold, Research Associate

About The European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and is owned by 65 countries as well as the European Investment Bank and the European Union as of 2016. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central and Western Asia, and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). During 2015, EBRD invested EUR 9.38 billion (USD 10.5 billion) in 381 projects in 36 countries, and as of December of that year it reported total members’ equity of EUR 14.6 billion (USD 16.3 billion).

About United States Agency for International Development (USAID)

The United States Agency for International Development (USAID) is a government agency that provides international economic and humanitarian assistance. It focuses on areas such as economic growth, agriculture, trade, health, democracy, conflict prevention and humanitarian assistance. Under the Development Credit Authority (DCA), it provides credit guarantees that cover up to 50 percent of defaults on wholesale loans made by private financial institutions to institutions that lend on a retail basis to underserved borrowers. USAID reported a total of USD 27.1 billion in budgetary resources for 2015.

USAID offers a suite of resources aimed at improving the outcomes of microenterprise development research and practice at https://www.microlinks.org/es/kdid.

Sources and Additional Information

[1] EBRD Press Release: “EBRD and USAID join forces to boost private sector development

[2] MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

[3] MicroCapital Universe Profile: United States Agency for International Development (USAID)

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.

Similar Posts: