MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Supports Sovereign Lending for Public Sector Projects, Private Investments in Ukraine

The European Bank for Reconstruction and Development (EBRD), a UK-based financial institution, is putting together an economic support package for Ukraine that includes sovereign lending for public sector projects such as infrastructure development and increased funding for small and medium-sized enterprises (SMEs). EBRD initially planned to invest between EUR 500 million (USD 690 million) and EUR 750 million (USD 1 billion) in Ukraine over the next few years, but has decided to increase its commitment to EUR 1 billion (USD 1.4 billion). The move follows major political unrest in Ukraine from which many international partners are trying to help the country recover by increasing their investment in the country, including a macro-economic stabilization program introduced by the International Monetary Fund, an un-affiliated financial institution that has 188 country members and seeks to promote global monetary cooperation.

EBRD has a portfolio of investments in Ukraine totaling approximately EUR 4.7 billion (USD 6.5 billion). 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. As of 2014, EBRD is owned by 64 countries as well as the European Investment Bank and the European Union. 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.

About International Monetary Fund

The International Monetary Fund (IMF), part of the United Nations, is an organization with 188 member countries and territories working to foster global monetary cooperation, secure financial stability, facilitate international trade, boost employment, promote sustainable economic growth and reduce poverty around the world. IMF was created after the Second World War to oversee the international monetary system, promote exchange rate stability and encourage members to eliminate exchange restrictions that hinder trade.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development: “EBRD to Step Up Engagement in Ukraine,” http://www.ebrd.com/pages/news/press/2014/140327a.shtml

MicroCapital, February 5, 2014, “European Bank for Reconstruction and Development (EBRD) Considers $21m Loan to Compagnie Internationale de Leasing (CIL) for Micro-,Small and Medium-sized Enterprises (MSMEs) in Tunisia,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-considers-21m-loan-to-compagnie-internationale-de-leasing-cil-for-micro-small-and-medium-sized-enterprises-msmes-in-t/

MicroCapital, January 8, 2014, “European Bank for Reconstruction and Development (EBRD) Loans $4m to Microfund for Women (MFW) of Jordan to Support Onlending to Female Entrepreneurs,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-4m-to-microfund-for-women-mfw-of-jordan-to-support-onlending-to-female-entrepreneurs/

MicroCapital, July 10, 2013, “European Bank for Reconstruction and Development (EBRD), European Union Launch $3m “Small Business Support” Facility to Bring Technical Assistance to Firms in Egypt,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-european-union-launch-3m-small-business-support-facility-to-bring-technical-assistance-to-firms-in-egypt/

MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: International Monetary Fund (IMF) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Monetary+Fund+%28IMF%29

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