The EBRD in Czechia

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The EBRD has been investing in Czechia since 1993

The Bank is resuming investment in Czechia in response to a request by the government for help with recovery from the pandemic. Our re-engagement will be temporary, will not exceed a period of up to five years and will focus on the private sector.

At the EBRD, we partner with donors to make the economies in our regions greener, more resilient and more inclusive. To date, half of our investments are backed by donor funds.

137

Number of projects to date

€1,838m

Cumulative EBRD investment

€1,762m

Cumulative disbursements

100%

Private sector share of portfolio

Number of active portfolio operations

€650m

Current portfolio of projects

€606m

Operating assets

19%

Equity share of portfolio

1 January 1993

Joined the EBRD

256,110

Capital subscription (€000)

EBRD Governor: Zbynĕk Stanjura
EBRD Alternate Governor: Marek Mora
EBRD Board Director: Tamás Vojnits
EBRD Alternate Board Director: Klára Król

EBRD Shareholders information

The European Bank for Reconstruction and Development has resumed investment in Czechia after the Bank’s Board of Directors approved a request by its government to help with the recovery from the coronavirus pandemic.

Our re-engagement is temporary and will not exceed a period of up to five years. It will be limited in scope and focus on the private sector, complementing support provided by the European Investment Bank and the European Union (EU).

A joint assessment by the EBRD and the Czech government has identified as areas of engagement the provision of direct and private equity to strengthen firms that have suffered revenue losses as a result of the pandemic and those that have found new growth opportunities.

The Bank will invest venture capital to support innovative, high-growth, local small and medium-sized enterprises that have limited access to finance. Further development of the local capital market will also facilitate the financing of the real economy.

The green energy transition remains a high priority on Czechia’s agenda. The intensity of the country's energy sector is nearly twice the EU average and Czechia is one of the largest greenhouse gas emitters in Europe, with 75 per cent of its heating produced from coal. The EBRD can offer its know-how in strengthening the regulatory environment for renewable energy and support energy-efficiency investments with dedicated credit lines to address these challenges.

The EBRD had originally stopped investing in Czechia at the end of 2007, following the country’s request to graduate from being a recipient of the Bank’s funds.

However, Czechia had always remained a shareholder of the EBRD and the Bank had continued to manage its portfolio there and to support Czech companies in other EBRD economies.

The new approach to Czechia was due for review in 2024.

In addition to being a country where EBRD invests, Czechia is a donor to the EBRD, having made a total contribution of €23.1 million in donor funds to support the Bank’s operations. The EBRD’s latest strategy for Czechia was adopted on 15 September 2021.

1.1%

EBRD forecast for Czechia’s real GDP growth in 2024

2.4%

EBRD forecast for Czechia's real GDP growth in 2025

After contracting by 0.1 per cent in 2023, the Czech economy showed timid signs of recovery in the first half of 2024. Following a 2.8 per cent drop in 2023, private consumption expanded by 1.4 per cent year on year in the first half of 2024, while retail sales grew by 3.9 per cent year on year by July 2024, reflecting improved consumer confidence.

Although recording the steepest fall among its peers in 2023, real wages in Czechia recovered somewhat, with real-wage growth subsequently easing to 3.9 per cent year on year in the second quarter of 2024. After a strong recovery following the pandemic, investment declined by almost 2 per cent in the first half of 2024, while the destocking cycle continued. Reflecting this trend, imports were lower than in the same period of last year, counterbalancing weak exports.

As inflation averaged 2.5 per cent in the seven months to July 2024, the Czech National Bank cut the key interest rate five times in the period from January to August 2024, to 4.5 per cent. The September 2024 floods resulted in a 10 per cent increase in the fiscal deficit planned for the year (around €1.2 billion), despite the EU being expected to offer grants worth €2 billion to limit the impact on the budget.

The economy has been forecast to have grown by 1.1 per cent in 2024, on the back of the modest rebound of consumption, while stagnating foreign demand remains a key risk to the outlook. In 2025, more favourable financing conditions and further strengthening of foreign demand should support an increase in the growth rate to 2.4 per cent.

Czechia strategy and snapshot

Czechia strategy

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Local language version

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Report on public comments

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The EBRD in Czechia

At the EBRD, we partner with donors to make the economies in our regions greener, more resilient and more inclusive. To date, half of our investments are backed by donor funds.

Czechia strategy and snapshot

Contact the EBRD in Czechia

The EBRD in Czechia

At the EBRD, we partner with donors to make the economies in our regions greener, more resilient and more inclusive. To date, half of our investments are backed by donor funds.

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