Overview of key EBRD objectives
The countries of central and eastern Europe and the Commonwealth of
Independent States (CIS) are currently undertaking major development
programmes to respond to new market pressures. Over the past decade there has
been significant progress in the sector, however an acute shortage of
facilities in many of the EBRD's countries of operations still remain - as
evidenced by low network densities, long waiting times for lines and paucity
of modern services.
Demand for access and for improved service quality continues to outstrip
current supply. The need for value-added services, computer networks, and
media and broadcasting services is growing rapidly.
The magnitude of the investment necessary to satisfy this demand requires the
effective mobilisation of substantial amounts of private capital. The EBRD's
main aims in the sector are to:
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promote network expansion, thereby increasing access to telephone services and
improve the quality of service;
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encourage the emergence of innovative and advanced communication services;
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accelerate the privatisation process;
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develop appropriate regulatory and legal frameworks; and
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extend the development of the sector beyond basic telephone services.
The Bank's overall strategy is to promote modernisation and expansion by:
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assisting in the transformation of the incumbent national telecommunications
operators into commercially oriented privatised companies. The EBRD's
telecommunications team has in-depth experience in this area. For example, the
team has been a key player in the privatisation of the Hungarian national
operator. It has also been actively involved in the privatisation of the
national operator in Romania, and invested in the initial public offerings
(IPO) of the national telecommunications operators in Poland and Lithuania.
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mobilising private sector financing. Since 1997, the vast majority of the
Bank's commitments in the sector have been made in private enterprises or in
connection with the privatisation of state-owned companies.
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maintaining a flexible and innovative approach. The Bank intends to continue
to expand its repertoire of financial instruments and to supply innovative
solutions to accommodate the increasingly sophisticated needs of both its
public and private sector clients. This includes equity warehousing, hedging
facilities, guarantees and local currency financing, along with its
traditional role as a provider of both hard currency debt and equity financing.
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continuing to benefit from its relationships with commercial lenders, other
multilateral and bilateral institutions, telecommunications operators and
service providers. In 2001, the Bank made its first local currency financing
in the sector.
