The European Bank for Reconstruction and Development (EBRD) has launched an emergency support programme for infrastructure providers across its emerging economies to ensure the provision of vital services despite acute pressure from the coronavirus pandemic.
The EBRD’s initiative, part of its overall Solidarity Package response to Covid-19, will focus on both ensuring service provision immediately and protecting progress in its regions towards the provision of green, sustainable infrastructure.
The Covid‐19 crisis has had a severe impact on infrastructure sectors in EBRD countries that stretch from Central and Eastern Europe through to Central Asia and the Middle East and North Africa.
Providers are facing unprecedented financial strain due to a dramatic fall in revenues. They risk not having enough working capital to keep vital infrastructure safe and functioning when it is most needed.
At the same time, the diversion of budget resources away from infrastructure investments to emergency coronavirus services is compromising the sustainability of services in the medium to long‐term and threatening the transition to green, sustainable infrastructure that remains a fundamental challenge for all economies.
The VISP initiative contains three financing tools:
- Working capital lines to municipalities and utilities. The EBRD will deploy these credit lines through local banks to support the continuity of infrastructure services and/or infrastructure investment programmes.
- Stabilisation facilities for key infrastructure providers. These will be direct loans to key services providers to provide liquidity following temporary revenue losses due to Covid‐19, with the aim of protecting the delivery of vital services and infrastructure.
- Investment financing for public sector clients. The EBRD will provide finance to public sector clients to support vital capital expenditure that is otherwise threatened by the economic fallout of the COVID-19 crisis.
In addition to financial support, the EBRD will provide policy support across its regions to protect and sustain ongoing reforms, to strengthen the resilience of economies, to maintain the momentum of a low-carbon transition and to promote good governance across the sector.
Nandita Parshad, EBRD Managing Director, Sustainable Infrastructure Group, said: “This is a response to the needs of our countries, cities and their citizens to keep the lights on, clean water flowing, waste collected and treated, and public transport running safely. Preserving the stable provision of essential services is vital to support those societies right now in the midst of this unprecedented crisis, but also to ensure that when the recovery comes it is a green and sustainable one, led by private enterprise.”
Mattia Romani, EBRD Managing Director, Economics, Policy and Governance, added: “Given the unprecedented crisis affecting the infrastructure sector, the Bank is developing new ways to help our countries and vital infrastructure providers through a combination of short- and long-term financial products as well as advice to government to shape the economic policy response in a way that can help preserve the private sector’s ability to be the engine of growth, prevent value destruction and protect well-functioning markets.”