What is a European Bank for Reconstruction and Development?

The European Bank for Reconstruction and Development (EBRD) was created in 1991 after the fall of the Berlin Wall and the collapse of the Union of Soviet Socialist Republics (USSR). Its guiding mission is to provide financial and other forms of assistance to private enterprises in former Communist bloc countries so that these nations are better able to transition to market-driven economies and democracy. With its headquarters in London, the EBRD operates in 29 countries stretching from central Europe to central Asia. It is owned by its 61 member countries, the European Community, and the European Investment Bank. Recipients include former USSR member states as well as Turkey and Mongolia.

The EBRD makes loans and provides other forms of financing to banks, industries and businesses in its recipient member countries. In addition to capital provided by recipient members, it has a triple-A (AAA) credit rating and actively issues debt securities in the international financial markets to fund its loan portfolio and operations. It also provides recipient member country governments advice and support for policy development and planning related to privatization and restructuring of state-owned companies and improvement of infrastructure and municipal services.

The bank focuses on raising capital and providing financing tailored to the needs of new or recently established private sector banks and businesses; in general, the EBRD provides what are deemed to be essential services and products perceived to be too risky or that require investment capital in amounts too large for commercial and investment banks to take on individually. In order to receive European Bank for Reconstruction and Development funding, projects must successfully pass through an extensive process during which each one is evaluated on a commercial basis and a decision is made as to its commercial viability. Similarly, European Bank for Reconstruction and Development loans are priced on a commercial basis. The EBRD does not issue export credit guarantees nor is it involved in retail banking.

The European Bank for Reconstruction and Development invests and operates in the following countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Estonia, Macedonia, Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Montenegro, Poland, Romania, Russia, Serbia, Slovak Republic, Slovenia, Tajikistan, Turkey, Turkmenistan, Ukraine, and Uzbekistan. The EBRD stopped making new investments in the Czech Republic in 2007, although it continues to manage and administer its investments there. Similarly, it in the process of ending its activities in the Baltic states of Estonia, Latvia and Lithuania.