Donors provide €454 million in funding to the EBRD

By Anthony Williams
@ebrdtony

Donor funding to the EBRD hit a record €454 million in 2011, helping to pave the way for investments throughout the region where the EBRD is active, including emerging democracies in the Middle East and North Africa.

Ever since Norway became the first country to provide the Bank with donor funds, a total of 42 donors have now created partnerships with the EBRD, according to the EBRD’s Donor Report, that was published on Thursday.

Donor funds are crucial as a way of preparing for future EBRD investments, helping to foster reforms and improving the investment climate. Record donor funding in 2011 coincided with a record for total EBRD investments last year of €9.1 billion.

“We are deepening the partnership with donors as we expand activities to the southern and eastern Mediterranean region, while remaining highly committed to our existing region of operations. We believe that by leveraging the resources of donors, the EBRD is able to achieve more than any individual institution or country could on its own,” said EBRD President Thomas Mirow.

With donor funding, in 2011 the EBRD started activities in the southern and eastern Mediterranean (2MB - PDF) (SEMED) region. The European Union, Australia, Finland, France, Italy, Germany, the Netherlands, Norway, Sweden and the United Kingdom provided funding for such activities. The EBRD also allocated €20 million from its net income.

Funding for around 40 technical cooperation projects (TC) in SEMED has been approved so far. About €25 million worth of TC projects are currently in the preparation and implementation process. Through this funding, the EBRD is providing expertise to small and medium-sized businesses. The Bank is also focusing on project preparation in order to be ready for investments. One such project is the agribusiness framework being set up in Egypt, Jordan, Morocco and Tunisia with companies in the food sector, and a local enterprise facility to prepare small direct financing operations.

In 2011 the main beneficiaries of donor funding were the early transition countries at 26 per cent, other official development assistance (ODA) countries such as Ukraine and Turkey at 23 per cent and the Western Balkans at 13 per cent. Donor funding was distributed widely across the various sectors where the EBRD invests including in financial institutions, municipal and environmental infrastructure, small businesses as well as energy efficiency and sustainable energy.

In 2011, bilateral donors continued to provide the bulk of resources at €193 million and another €62 million in concessional loan funds. The European Union, the Bank’s largest contributor, has provided increasing support from its national programmes and regional platforms at €118 million.

Such funding helps the EBRD to improve living conditions and economic opportunities. In Tajikistan, for example, following years of under-investment in the water sector, the EBRD and donors are helping to improve water and wastewater services in 15 cities. Such large-scale and expensive projects are only affordable and often possible because of donor involvement through investment grants and technical cooperation funding.