EBRD invests €1.3bn in Central Europe in 2021

By Svitlana  Pyrkalo
@pyrkalo

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  • Visit focused on post-Covid-19 recovery, green transition and innovation
  • Green projects accounted for 100 per cent of 2021 finance in the Czech and Slovak Republics
  • Total 2021 investment in the CEB region was 1.3 billion

EBRD Vice President for Banking Alain Pilloux visited the Czech and Slovak Republics last week for meetings with national governments and the business community.

First, in Bratislava, he met with EBRD Governor and Slovak Finance Minister Igor Matovic. Later, in Prague, where a new government was sworn in December 2021 shortly after EBRD re-engagement in the country, he met with new EBRD Governor and Czech Finance Minister Zbyněk Stanjura.   

Having graduated from direct EBRD investment activity in 2007, at the start of the Covid-19 pandemic the Czech Republic requested the resumption of EBRD investment for a limited period of five years to support the country’s economic recovery and help it to “build back better”. On his first visit since EBRD re-engagement, the Vice President discussed EBRD priorities with the newly appointed government.

The EBRD adopted a new Country Strategy for the Czech Republic last September, with the sole priority of supporting a green and inclusive economic recovery from the Covid-19 crisis.

At his meeting with the new Czech Minister of Finance on 3 February, the Mr Pilloux discussed Bank plans to support the decarbonisation of the economy and the green transition, including the EBRD flagship Green Cities programme.

They also discussed ways to support cross-border activities and the further internationalisation of local companies, including through equity investments (directly through private equity funds).

Examples of projects financed last year in the Czech Republic include a €35 million equity investment in Rohlik, a leading Czech online grocery retailer now expanding outside the Czech Republic, and a €10 million tranche of a green bond issued by regional PV developer, Photon Energy, which also operates in the Slovak Republic and Hungary.

In the Slovak Republic, the EBRD continues to support the strengthening of the electricity transmission network following the closure of two obsolete nuclear reactors.

The entirety of the EBRD’s investment in the Czech and Slovak Republics last year was channelled to green projects.

Investment in the CEB region in 2021

According to its final results for 2021, the EBRD last year committed a total of €1.27 billion to 50 projects in the economies of central Europe and the Baltic countries (CEB).

Cumulative commitments to the regions in which the EBRD operates were €26.9 billion. The EBRD made its first ever investment in Poland in 1991, shortly after its inception.

The EBRD’s 2021 investment in the region was as follows, with the share of funds for Green Economy Transition (GET) initiatives in brackets:

Croatia: €176 million (64% GET); Czech Republic: €8 million (100% GET); Estonia: €56 million (66% GET); Hungary: €63 million (76% GET); Latvia: €113 million (84% GET); Lithuania: €115 million (82% GET); Poland: €598 million (78% GET); Slovak Republic: €86 million (100% GET); Slovenia: €40 million (95% GET).

The EBRD’s priorities in the CEB countries are a green transition and the development of debt and equity capital markets.  

Overall, in CEB, 78 per cent of 2021 investment was “green” finance, up from 64 per cent in 2020. The vast majority was to private companies (87 per cent, or €1.24 billion), with only €30 million to a state-owned enterprise (to support green bond issuance by a Latvian electricity company).

According to the EBRD’s classification, the CEB region includes the westernmost economies of the regions in which the Bank operates, including Slovenia and Croatia, and the northern area of emerging Europe.

Other European economies are classed as part of the south-eastern Europe region and the eastern Europe and the Caucasus region.

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