Belarus and EBRD agree on privatising a state-owned bank

By Anton Usov

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Agreement is first of its kind in a banking system dominated by the state
The EBRD and the Belarus government have for the first time agreed to work together on the privatisation of one of the country’s state-owned banks. This pioneering agreement marks a bold change in official policy and could open a new chapter in the history of the country’s banking system, 65 per cent of which is currently owned by the state. 
A Memorandum of Understanding signed at the EBRD’s Annual General Meeting in Tbilisi today between EBRD’s First Vice President Phil Bennett and Belarus’s Deputy Prime Minister Vladimir Semashko envisages the government selling by 2020 its controlling stake in Belinvestbank, the country’s fourth-largest bank.
The EBRD is for its part ready to make pre-privatisation funding available on the condition that certain agreed goals are met that will strengthen Belinvestbank’s corporate governance and guarantee its independence as a commercial entity free from political influence.
The funding could include an equity investment in Belinvestbank, as well as setting up a trade financing line for the bank and providing it with loans aimed at fostering the growth of local small and medium-sized businesses.
Belarus's Deputy Prime Minister Vladimir Semashko said the government of Belarus is satisfied that the EBRD excluded the project aimed at pre-privatisation support of Open JSC Belinvestbank from its “calibrated approach”. He, therefore, hoped this project would pave way for the removal of limitations and help broaden the Bank’s public sector operations in the country.
EBRD President, Sir Suma Chakrabarti, said: “The signing of the agreement is a highly promising breakthrough, and a successful outcome of the discussions I started with President Lukashenko back in February. Implementation of the agreement could unlock huge potential by spurring the development of the country’s private sector.”
The potential privatisation of Belinvestbank, whose share of the local banking market is over 6 per cent, was one of the issues discussed with President Lukashenko during Sir Suma’s visit to Minsk earlier this year.
The EBRD is a major investor in Belarus. As of 1 May 2015 the Bank had invested €1.7 billion spread over 70 projects, most of which are in the private sector.
Full text of the MoU    
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