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 about 35 per cent of total donor funds channeled through the EBRD since the Bank’s inception. In 2018 the Bank received over €280 million[1] in contributions from the EU, which represents 48 per cent of the total donor funding provided for EBRD projects that year. 

EU and the EBRD: at a glance
EBRD’s largest single donor
About €2.5 billion: total donor contributions
€280 million: contributions in 2018 for EBRD projects
3 per cent 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, the Structural Reform Support Programme and the Horizon 2020 programme. 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 Regional Trust Fund 'Madad' provides grants to support projects under the EBRD refugee response programme.

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

In 2018 the EBRD received a total of €126 million from the NIP, with projects including the Moldova-Romania Power Interconnection, the climate resilience upgrade of the Enguri Hydropower Plant in Georgia, the As Samra Wastewater Treatment Plant Expansion in Jordan, the Kitchener Solid Waste and Drain Rehabilitation in Egypt, and the EBRD’s first Hazardous Waste Project in Georgia.

The EU’s Regional Trust Fund in response to the Syrian Crisis, the MADAD Fund, addresses educational, economic and social needs of Syrian refugees while also supporting overstretched host country communities and their administrations. The MADAD Fund co-financed the EBRD’s West Irbid Wastewater Network Construction Project in Jordan with an investment grant of €20 million in 2018.

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 with 90 per cent of IFCA funds allocated to the EBRD in the form of grants and risk sharing for EBRD investments across the region in the municipal infrastructure, SME and energy efficiency sectors. Recent projects include a Small Business Advisory Programme in Turkmenistan, new phases of the Kyrgyz Water Rehabilitation Framework, the extension of a Sustainable Energy Efficiency Financing Facility in the Kyrgyz Republic and a Solid Waste Framework in Tajikistan.

The Asia Investment Facility (AIF): the EU and the EBRD signed their first agreement under the AIF in 2015 and the AIF now contributes €16.75 million to EBRD projects to support economic diversification by providing access to finance for SMEs in Mongolia and to modernise the solid waste sector in the capital Ulaanbaatar.

In the Western Balkans, €105 million has supported EBRD investments in infrastructure under the Western Balkans Investment Framework, Tourism-LED Model for Local Economic Development Support Programme in Albania and SME support programme in Serbia.

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 20 bilateral donors for investment in the digital, energy, environment, social and transport sectors and in private sector development. In 2019, the WBIF is celebrating its 10th anniversary and has, at the same time, reached an important milestone of over €1 billion in approved grants to enhance regional integration and connectivity.  WBIF grants awarded to EBRD projects since inception amount to €431 million.

Bilateral donors are: Austria, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Poland, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom.

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 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 million, with the EU being the largest contributor.

The Eastern Europe Energy Efficiency and Environment Partnership fund (E5P) is a €200 million 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 €112 million, to support district heating and energy saving investments across the country. Based on pledges of over €68 million, in 2015 the E5P commenced operations in Armenia, Georgia and Moldova. Since 2017 E5P is also operational in Belarus. Donors pledging their support are the European Union (the largest contributor with €79 million), Armenia, Belarus, Czech Republic, Denmark, Estonia, Finland, Georgia, Germany, Iceland, Ireland, Latvia, Lithuania, Moldova, Norway, Poland, Romania, Slovak Republic, Sweden, Ukraine, TaiwanBusiness-EBRD Technical Cooperation Fund and the United States of America.

The EU is the largest donor to the EBRD-Ukraine Stabilisation and Sustainable Growth Multi-Donor Account with €18.7 million of contributions. The Multi-Donor Account enables the Bank to provide support for policy reforms, which are urgently needed to stabilise the economy, and paves the way for EBRD investments in the country. Contributors to the Ukraine MDA are: Denmark, EU, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Poland, Sweden, Switzerland, the United Kingdom and the United States.

More recently the EU and EBRD have joint forces through a number of other financing instruments:

The European Structural and Investment Funds (ESIF), which are jointly managed by the European Commission and the EU countries, aim to support investment in job creation and a sustainable and healthy European economy and environment. So far the EBRD has signed agreements with Cyprus and Bulgaria where ESIF funds are administered by EBRD to support local SMEs and enhance investments in the water sector, respectively.

The Structural Reform Support Programme (SRSP) provides tailor-made support to all EU countries for their institutional, administrative and growth-enhancing reforms. In this context, the EBRD has partnered with the EU on over 30 projects totaling €6.1 million to help EU member states implement reforms and capacity-building programmes across the financial sector and access to finance, growth and business environment as well as governance and public administration.

Horizon 2020 is the biggest EU Research and Innovation programme. In 2018 the EU and EBRD agreed to work together on a pilot project aimed at helping innovative small and medium-sized enterprises and mic-cap companies in Bulgaria, Latvia and Romania.

 

[1] Including funds secured through the Infrastructure Project Facility under the Western Balkans Investment Framework.

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