EU: EBRD shareholder profile

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The EBRD’s strong relationship with EU institutions is multi-faceted and extremely wide-ranging.

The EU owns 3 per cent of the EBRD’s capital. The European Union, the European Investment Bank (EIB) and the EU member states combined own 62.8 per cent of the EBRD’s capital.
 
As the largest single donor to the EBRD, the EU has accounted for 36 per cent of total grants channelled through the EBRD since the Bank’s inception. In 2015 the Bank received over €179 million in contributions from the EU, which represents half of the total donor funding provided to the EBRD that year. 

EU and the EBRD: at a glance
EBRD’s largest single donor
€1.54 billion: total donor contributions
€179 million: contributions in 2015
3% capital share

Funding channels include the Instrument for Pre-Accession Assistance (IPA) for Turkey and the Western Balkans, the European Neighbourhood Instrument for countries on the eastern and southern edge of Europe and the Development Cooperation Instrument financing EBRD projects in Central Asia. EBRD projects in EU member states have also benefited from funding through the Structural and Cohesion Funds. In addition to accessing EU funding on a bilateral basis, the EBRD is an active participant in the regional blending facilities, which combine grants with investments from European financial institutions.

The EU is also critical to EBRD operations by supporting policy dialogue. The EU is a driver of policy and legislation in many countries in which the EBRD invests. In addition, the Bank cooperates with EU institutions on current and emerging policies, whether linked to IFI growth plans, environmental issues or initiatives such as Vienna 2.0, a private-public sector platform established to secure adequate capital and liquidity support by banking groups for their affiliates in central, eastern and south-eastern Europe

EU funding is provided through regional loan/grant blending facilities as well as on a bilateral basis.

The Neighbourhood Investment Facility (NIF) supports infrastructure projects in the transport, energy, financial, social and environmental sectors by combining EU grant resources with loans from European development financing institutions. NIF funding is particularly focused on the Eastern Partnership (EaP) countries and the southern and eastern Mediterranean (SEMED) region.

In 2015 the EBRD received a total of €140 million from the NIF, with projects including finance and advise for Small Business across the region, financing technologies to combat climate change in Ukraine.  The establishment of a Deep and Comprehensive Free Trade Area (DCFTA) with Georgia Moldova and Ukraine is an increasing focus in the EU’s Eastern Neighbourhood. To help SMEs seize the opportunities the DCFTA presents,  the EBRD has launched several programmes to raise product and service standards and boost trade with the EU.

The Western Balkans Investment Framework (WBIF) provides technical assistance, grant co-financing and other grant-funded instruments to support sustainable growth in the region. It pools resources from the EU, partner financial institutions, and 19 bilateral donors for investment in the transport, energy, environment and social sectors, and in private sector development. By end-2015, 217 technical assistance grants amounting to approximately €370 million were approved, leveraging over €3.7 billion in loans. The EBRD has received just under 30 per cent of the overall portfolio for 61 assignments and two regional initiatives: the Regional Energy Efficiency Programme and the Enterprise Development and Innovation Facility.  In 2015, the EU contributed €144.9 million for investment grants in energy and transport projects which improve links between the Western Balkans countries. Two projects are led by the EBRD, mobilising €50.5 million in investment grants for the interconnection of FYR Macedonian and Albanian power networks and the Kosovo-Serbia rail interconnection.

 

The Investment Facility for Central Asia (IFCA) is key in supporting EBRD activities in Central Asia. It covers Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan, and is aimed at promoting investments in the energy, small and medium-sized enterprise (SME) and social sectors. Since 2010 the IFCA and EBRD have had a very strong partnership, signing 13 agreements worth €68 million and approving in total more than €100 million for projects. These grants are used to support our investments across the region, mostly in the municipal infrastructure, SME and energy efficiency sectors.

The Asia Investment Facility. In 2015, the EU and the EBRD signed their first agreement under the AIF. The AIF contributes €9.26 million to support economic diversification by providing access to finance for SMEs in Mongolia.

The EBRD and the EU also work side-by-side in the framework of multi-donor funds managed by the EBRD.

The Northern Dimension Environmental Partnership (NDEP) fund, established in 2002, pools funds from donor governments and the EU which are then used as grants for priority environmental and nuclear safety projects in the Northern Dimension Area.  Contributors to the Fund are the European Union and 12 countries: Belarus, Belgium, Canada, Denmark, Finland, France, Germany, the Netherlands, Norway, Russia, Sweden and the United Kingdom.  The Fund is managed by the EBRD and stands at over €348.2 million, with the EU and Russia being the largest contributors. Activities in Russia are split between nuclear safety and environmental projects.

The Eastern Europe Energy Efficiency and Environment Partnership fund (E5P) is a multi-donor fund initiated by the EU Swedish Presidency in 2009 and managed by the EBRD to facilitate municipal investments in energy efficiency and environmental projects. It aims to reduce greenhouse gas emissions in the Eastern Partnership countries. Since 2010, the Fund has been operating successfully in Ukraine extending grants, now over €80 million, to support district heating and energy saving investments across the country. Based on pledges of over €60 million, in 2015 the E5P commenced operations in Armenia, Georgia and Moldova. First projects for district heating, energy efficiency in public buildings and solid waste management have been approved for these new E5P countries.  Donors pledging their support are the European Union (the largest contributor with €78 million), Armenia, Czech Republic, Denmark, Estonia, Finland, Georgia, Germany, Iceland, Ireland, Latvia, Lithuania, Moldova, Norway, Poland, Romania, Slovak Republic, Sweden, Ukraine and the United States.

The EU is a major contributor to bilateral programmes.

In 2014 the EBRD launched a Women in Business Programme in Turkey. Co-financed by the European Union, the programme supports women-led SMEs through improved access to finance and advisory services. The EU committed €32.3 million and Turkey is contributing a further €5.7 million. In 2014 the EU contributed €24.3 million to help establish an EU/EBRD Turkish Energy Efficiency and Renewable Energy Support Programme. The programme aims to promote the use of sustainable energy through a mix of project financing, policy dialogue and technical cooperation (TC).

Both programmes are funded under the EU’s Instrument for Pre-Accession Assistance (IPA). In the last five years, bilateral contributions provided through the IPA, the European Neighbourhood Partnership Instrument and the Development Cooperation Instrument in support of EBRD projects have amounted to €255 million.

The EBRD has also secured €10 million from the EU to continue its activities under the EBRD-European Local Energy Assistance facility. Such funding helps municipalities cover the costs of TC activities that prepare and implement investment projects in the areas of energy efficiency, renewable energy and sustainable urban transport.

The EU/EBRD SME Finance Facility provides financing through local financial institutions to SMEs in central and eastern Europe. Eligible countries include EU accession countries and new member states. By the end of 2014, the EBRD had provided €1.2 billion in credit lines to 44 banks and 40 leasing companies. The facility is being supported by €136.6 million in EU grant funding.

An SME energy efficiency sub-window to the EU/EBRD SME Finance Facility supports investments for energy efficiency and renewable energy measures that target CO2 emission reductions. By the end of 2014, the EBRD had provided €180 million in credit lines under the Polish Sustainable Energy Financing Facility (PolSEFF) and launched PolSEFF2. Both facilities are supported by €33.3 million in EU grant funding. The EBRD also provided €75 million under the Romania Sustainable Energy Financing Facility and up to €204 million for an extension of the Turkey Sustainable Energy Financing Facility, supported by €15.3 million and €4.9 million in EU grant funding, respectively.

The EU is particularly involved in the work of the EBRD’s Advice for Small Business programmes. Since 1993, the EU has provided one-third of the total funds that support the programmes.

With a contribution of €2.3 billion, the EU is also the largest donor to the EBRD-managed funds that provide support to enhance nuclear safety, including the Chernobyl Shelter Fund and the NDEP “nuclear window”, among others.

 

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