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EBRD sets rapid pace of investment in response to crisis
Financing so far around €2.3 billion at 15-16 May Annual Meeting
The EBRD is setting a rapid pace of investment, responding to the impact of the global financial crisis on eastern Europe at its 15-16 May Annual meeting.
Investments signed around the Annual Meeting will cover the whole range of industries where the EBRD is active, including the financial, the corporate and the energy and infrastructure sectors.
By the end of the Annual Meeting commitments will have reached around €2.3 billion, up by more than 50 percent from the same period last year.
The EBRD has significantly increased its investment objective for 2009 at a record level of €7 billion. “We are well on track to achieving this goal with the projects we have finalised so far and with the pipeline of investments which has been built up,” said EBRD First Vice President Varel Freeman.
Some 60 percent or €1.4 billion of the investments so far have been directly linked to alleviating the impact of the crisis on eastern Europe.
The EBRD’s immediate crisis response has been to help stabilise the banking sectors in the region, investing a total of over €800 million in financial institutions with the aim especially of ensuring their continued funding for small and medium-sized enterprises.
In February this year, the EBRD teamed up with the World Bank Group and the European Investment Bank to pledge €24.5 billion in financing to SMEs via the banking sector over the next two years.
In the context of this IFI plan, the EBRD this month joined forces with the Italian banking group UniCredit to support economies in eastern Europe, announcing plans to invest over €430 million in Unicredit subsidiaries in eight countries. The funding is aimed mainly at SME, leasing and energy efficiency financing.
Another important milestone in the financial sector was the EBRD’s financial package worth over €100 million in equity and Tier 2 capital for Latvia’s Parex Bank in April. Already last year, the EBRD and the IFC provided Bank of Georgia with up to $200 million to help the leading bank in the Caucasus manage the effects of the crisis.
The EBRD has also provided crisis financing worth €330 million directly to the corporate sector, helping enterprises meet short-term refinancing needs and carry out existing investment programmes.
It has separately established a €250 million facility to provide rapid financial support to existing corporate clients. Ukraine’s leading agribusiness and sugar producer, Astarta, was the first client to benefit from the new facility, receiving a $20 million loan in April.
In close cooperation with other International Financial Institutions, the EBRD has also provided financing for critical infrastructure and energy projects where commercial funding sources have dried up.
So far, €390 million has been provided in crisis response funding in these sectors, including loans totalling €350 million to Romanian oil and gas company Petrom for environmental upgrades and for the construction of a state-of-the-art gas fired power plant.
In the week leading up to the Annual Meeting, the EBRD also signed its first project in Turkey, which became a recipient country of operations in 2008. The Bank is providing a €45 million loan for the construction of the largest wind farm in the country.
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The EBRD, owned by 61 countries and two intergovernmental institutions, is supporting the development of market economies and democracies in countries from central Europe to central Asia. www.ebrd.com
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