Current focus and key challenges

In particular, the region faces the following medium-term challenges:

• Competitiveness and efficiency: One of the most intractable challenges of transition has been the need to tackle the command economy’s legacy of energy-intensive production and poor-quality infrastructure, including in housing, government buildings, and power and heat generation, transmission and distribution. An increased emphasis on energy efficiency is part of the transition process, which requires further restructuring at the company, industry and economy level.
• Investment and growth: As their economies continue to grow, the Bank’s countries of operations face huge energy investment needs over the medium term.
• Energy security: The transition region is rich in energy but resources are concentrated in a few countries. The energy importers of the region can reduce energy dependence by cutting energy waste and expanding sources of supply. Reviewing the fuel mix and diversifying supply channels (through energy trade, market liberalisation and supply chain investments) are therefore important challenges.
• Climate change: From a global context, many of the most attractive options to reduce greenhouse gas emissions are to be found in the Bank’s region, given its continuing high levels of energy wastage. The EBRD’s countries of operations are therefore expected to play a prominent role in the international effort to combat climate change.
• Natural resource development: The region has abundant energy resources: four countries are rich in oil and gas, while others have coal and renewable energy. If these resources are developed competitively, they can help to alleviate global supply constraints and contribute to an increased security of supply. Managed well, they can also be a boon to the region’s economies. However, the concentration of oil and gas reserves in only a few countries is raising concerns about energy dependence among energy-importing countries and, where there is poor governance, is increasing the scope for corruption in the resource-rich countries themselves.

Last updated 26 April 2010