The European Bank for Reconstruction and Development is planning an increase in its investments in Ukraine, including a return to sovereign lending for public sector projects, as part of an international economic support package for Ukraine.
The EBRD could invest around €1 billion a year over the next few years, signficantly raising its investments from the range of €550 to €750 million contemplated earlier in 2014. This increase is envisioned in the context of the response of the international community, including Ukraine’s agreement announced today with the International Monetary Fund for a macro-economic stabilisation programme.
The EBRD will continue to monitor economic developments in Ukraine and will adjust its approach accordingly in support of its clients. The EBRD has a portfolio of investments in Ukraine of around €4.7 billion.
While the EBRD's emphasis on private sector projects will continue, the Bank will also return to sovereign lending for public sector investments after abstaining from pursuing them over the last 12 months.
To underpin its investments in Ukraine, the EBRD will reinvigorate its Anti-Corruption Initiative, which should help to address the country's acute problems of corruption and the unsatisfactory business climate.
In the private sector, the Bank will be active in both the corporate and financial sectors, and will also provide financing for energy efficiency projects. The Bank will aim to increase its funding specifically for small and medium sized enterprises and open a new office in Lviv to strengthen its support of this essential segment of Ukraine's economy. It will also stand ready to increase its support for trade financing, as necessary.
In the public sector, the EBRD will revive its investment plans. These may include some major infrastructure projects that are critical to the recovery of the country's economy.
The EBRD expects Ukraine's economic output to contract in 2014. The EBRD believes that the implementation of the economic and structural reforms which Ukraine has agreed with the IMF, along with the other support from the international community including our own, should eventually help return the country to economic stability and growth.