A new three-year EBRD strategy for Belarus reaffirms the Bank’s strong commitment to supporting the country’s 9.5 million people through projects which contribute to the development of the private sector and improve the environment.
The new strategy continues an existing policy of constructive but calibrated engagement which uses both political and economic benchmarks to measure how much Belarus is in practice committed to the EBRD founding principles, to which it subscribed on joining in 1992.
The fundamental principles listed in the 1991 agreement establishing the EBRD are multiparty democracy, the rule of law, respect for human rights and market economics.
A calibrated approach allows the EBRD to adjust its engagement on the ground in response to any initiatives concerning the political or economic goals that are at the heart of the Bank’s mandate in all its countries of operation.
Whether or not the EBRD can go beyond the support spelt out in this new strategy will thus depend on the future actions of the Belarusian authorities.
The Bank’s existing Belarus portfolio is predominantly invested in the country’s nascent private sector and promoting it further will remain the EBRD’s priority over the next three years in a country where the state sector still employs most of the labour force and accounts for over 70 per cent of GDP.
The EBRD will provide debt and equity financing to privately owned corporates across all sectors of the economy with a particular focus on manufacturing and agro-processing. The EBRD will also strengthen financial intermediation by providing credit-lines to its partner banks for on-lending to small and medium-sized companies.
The Bank this year launched a USD 50 million programme to finance investments in energy efficiency and renewable energy in Belarus, making this funding available to medium-sized industrial firms and small businesses through local banks that meet EBRD lending requirements.
Although previous attempts have been unsuccessful, the EBRD remains ready to support the transparent privatisation of state-owned companies and banks once a suitable privatisation framework has been created.
The EBRD, which last year launched its first environmental project in Belarus, involving waste water-treatment in three towns, may also consider extending its support to more towns and/or engaging in other municipal sectors which tangibly benefit the local population and the environment, such as solid waste management.
The EBRD last year invested EUR 185 million in the Belarus economy, providing EUR 107 million for 12 projects as well as making available over EUR 78 million in trade financing. As during the previous strategy period, the EBRD will not provide any direct funding to the state over the next three years.