MICROCAPITAL BRIEF: EBRD Moves to Block Russia, Belarus from Funding, Technical Assistance; Boost Financing in Ukraine

In response to hostilities in Ukraine, the Board of Directors of the European Bank for Reconstruction and Development (EBRD), a UK-based multilateral development finance institution, recently proposed to the institution’s Board of Governors that it cut off assistance to Russia and Belarus, both of which are EBRD members. EBRD has outstanding investments of about EUR 900 million (USD 980 million) in each country as of January 2022. EBRD also is considering participating in a multi-stakeholder effort to provide emergency financing to Ukraine and countries to which some of its citizens are fleeing because of the violence. These moves have come as EBRD has expressed “condemnation of the invasion and its unwavering support for Ukraine.”

Founded in 1991, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of micro-, small and medium-sized enterprises. With a focus on “the promotion of private and entrepreneurial initiative,” the bank disbursed approximately EUR 11 billion (USD 13.3 billion) to 411 projects during 2020. EBRD’s shareholders comprise 69 countries plus the EU.

By Sheen Gupta, Research Associate

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2022/ebrd-moves-forward-with-action-against-russia-and-belarus.html

Previous MicroCapital article on EBRD
https://www.microcapital.org/microcapital-brief-ebrd-loans-5-6m-to-banka-per-biznes-to-boost-competitiveness-of-smes-in-kosovo/

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