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EBRD and Council of Europe agree on co-financing programme for central and eastern Europe
An agreement on co-financing in central and eastern Europe has been reached by the European Bank for Reconstruction and Development (EBRD) and the Council of Europe Social Development Fund (CEF). Through this agreement, the two institutions aim to intensify their cooperation and to increase opportunities for jointly financing projects in the region. The Memorandum of Understanding between the EBRD and the CEF has been signed by Horst Köhler, President of the EBRD, and Raphäel Alomar, Governor of the CEF.
The co-financing programme will focus on three key areas for both institutions: small and medium-sized enterprises (SMEs), micro-businesses and municipal and environmental infrastructure. These are priority areas for investment because of their potentially significant impact on the transition process and on the accession of candidate member states to the European Union. The EBRD and the CEF have agreed to have regular discussions to identify specific opportunities for project-based co-financing.
The first co-financing project between the EBRD and the CEF is under preparation in the energy efficiency sector in the city of Kaunas in Lithuania. Future co-financing projects will be undertaken in countries where the EBRD and the CEF both operate, namely Bulgaria, Croatia, the Czech Republic, Estonia, FYR Macedonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, the Slovak Republic and Slovenia. Albania has also applied for CEF membership and may soon become eligible for financial support.
The EBRD was set up in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with EUR 20 billion in authorised capital. In 1998 the EBRD financed 96 projects totalling EUR 2.4 billion.
The CEF is a multilateral development bank with a social vocation. Its headquarters are located in Paris. The original members of CEF were mostly western European countries. More recently central and eastern European countries have joined, increasing the membership to 32 countries. Since its creation in 1956 the Fund, which operates on sound banking principles, has helped to finance social projects with a particular focus on employment and income generation. In 1998 the Fund financed 43 projects totalling EUR 2.3 billion.
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