MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Considers $277m Investment for Financial Institutions in Western Balkans

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral financial institution, is considering investing an additional EUR 200 million (USD 277 million) through its Western Balkans Financing Framework, an initiative that funds development projects through intermediary financial institutions in Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia. The money is intended to be used for leasing, mortgages, insurance, subordinated debt and on-lending to micro-, small and medium-sized enterprises (MSMEs). Additionally, a portion of the investment will be used for technical assistance and to promote best practices in corporate governance. The funds will be disbursed by EBRD to retail institutions via debt, equity and guarantee facilities.

As of year-end 2013, the Framework has invested approximately EUR 13 billion (USD 17.8 billion) in 144 projects. EBRD provides loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

By Meraj Husain, Research Associate

About 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 it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central 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). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development: Western Balkans Financing Framework IV

MicroCapital, April 15, 2014, EIF, EBRD, European Commission, DEG to Allocate $19.8m for Small, Medium-Sized Enterprises (SMEs) Via Western Balkans Enterprise Expansion Fund (ENEF)

MicroCapital, February 5, 2014, European Bank for Reconstruction and Development (EBRD) Lends $14m to Societe Generale Banka Montenegro to Support On-Lending for Housing

MicroCapital, February 2, 2014, European Bank for Reconstruction and Development (EBRD) to Loan $25m to Belvnesheconombank (BelVEB) of Belarus to Support On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs)

MicroCapital, December 24, 2012, EBRD Loans $56m to Ohridska Banka of Macedonia, Banca Intesa Beograd of Serbia for SMEs

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

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