By KYIV. Nov 15 (Interfax-Ukraine) – The Board of Directors of the European Bank for Reconstruction and Development (EBRD) on Wednesday recommended that the bank’s governors approve a paid-in capital increase of EUR4 billion in order to ensure a significant and stable volume of investment in Ukraine now and in the future.
“Today’s decision is in line with the governors’ recognition that support for Ukraine should be the bank’s highest priority, now and in the future, following Russia’s full-scale invasion of the country, whilst also ensuring that the EBRD can continue to pursue its strategic priorities across all its economies of investment,” the bank said.
“Under the proposal submitted for governors’ consideration, the additional capital would enable the EBRD to continue providing a sustained level of investment during wartime of EUR1.5 billion a year, and to increase its annual investment in Ukraine to EUR3 billion in the future,” it added.
“Endorsement by the board of directors is the first step in the formal process of increasing the EBRD’s shareholding from its current level of EUR30 billion,” the report said.
“Governors will make a final decision on the proposed capital increase by the end of 2023. The capital increase would take effect from the end of 2024, with first payments to come in early 2025,” the report reads.
“At the EBRD’s 2023 Annual Meeting in Samarkand in May 2023, the governors agreed that additional shareholder support would be required to ensure the bank could play its full role. They also acknowledged that paid-in capital was the most efficient, effective and widely shared instrument to provide such support,” the bank said.
“If the governors approve the proposal, this will be the third capital increase in the EBRD’s history, following similar decisions in 1996 and 2010,” it states.
“This support is particularly important in the context of the increased need to face geopolitical tensions and their economic consequences, and the climate crisis and the long-term challenges it poses,” it noted.
“The EBRD is a committed and steadfast partner of Ukraine. Over the last 30 years, the bank has been the largest institutional investor in the country, with cumulative investment of more than EUR18 billion in more than 500 projects,” it said.
“In October 2023 the EBRD reached its target of deploying at least EUR3 billion of financing in Ukraine’s real economy in response to Russia’s war on the country in 2022-2023,” according to the document.
