EBRD in Ukraine. The work of a financial institution. Loans
How do international financial institutions help countries grow their economies? Many states understand how profitable it is to attract long and not expensive loans. History, strategy and plans of international lending in Ukraine.
European Bank for Reconstruction and Development (EBRD) – invests capital in large-scale projects in many countries that contribute to the development of a market economy, as well as business and private activities.
History of creation
The bank was established in 1991 with headquarters in London, and before that, in 1989, French President Francois Mitterrand put forward the idea of creating such an institution in order to organize a market economy and support private entrepreneurs after the collapse of communism in Eastern Europe.
From the very beginning of its existence, the bank had to quickly react to various epoch-making events, for example, such were the “Arab Spring”, or the collapse of the Soviet Union. It was after 1991 that the bank developed a reputation as a financial organization that must cope with all economic problems and focus on market business between countries.
During this period, the Bank is actively involved in activities such as banking system reform, privatization (legalization and policy dialogue), price liberalization, and the formation of an appropriate regulatory framework for property rights, i.e. in all vital and strategic sectors of the economy. Today 69 countries are the bank’s shareholders.
How the EBRD works in Europe
The EBRD primarily provides assistance in organizing and conducting entrepreneurial and business activities. Thanks to its experience, investment opportunities and participation in the discussion of global issues in the economy and politics of countries, the bank has won the trust of many countries. The EBRD is a trusted partner that helps shape successful economies and makes a difference in people’s lives.
This is not a commercial financial institution. The bank offers tailored solutions for specific circumstances. These changes contribute to the transition to a market economy. In addition, they stimulate innovation, transparency and business growth.
The EBRD mainly develops financial investment operations. But in addition, the financial institution provides consulting services for investors and entrepreneurs, and also encourages trade finance and loan syndication.
The bank directs investments to already existing companies, as well as finances projects in various sectors of the economy. Key industries in which the EBRD invests:
- agro-industry
- municipal infrastructure
- information and communication technologies
- legal reform
- Natural resources
- industrial production and services
- financial institutions
- transport
- sustainable resource use and climate change
- private equity funds
- nuclear safety
- energetics
EBRD in Ukraine
In September 2018, the EBRD Board of Directors approved a new strategy for Ukraine, which outlines the Bank’s priorities in the country for the next five years.
The EBRD will focus on projects that will combine investment and policy participation in areas such as privatization, energy security and efficiency, the financial sector, trade and infrastructure.
The EBRD’s operational and strategic priorities in Ukraine will be underpinned by the following five pillars:
Facilitating public sector privatization and commercialization to improve competitiveness and good governance: The EBRD will help foster private sector participation in all sectors and further commercialize public sector companies. The Bank will continue to support the introduction of modern procurement in the public sector, as well as the implementation of good governance.
Promote the rule of law, fair competition in the private sector, and support companies using the bank’s best practices. The EBRD will foster competition and support anti-corruption efforts. Special attention will be paid to skills development and employment of vulnerable groups.
Strengthening energy security through effective regulation, market liberalization, diversification and increased production and energy efficiency: The EBRD will commit more resources to create a sustainable energy market structure and improve energy connectivity. The Bank will help improve the efficiency of resource use and promote renewable energy sources.
Improving the resilience of the financial system by strengthening the banking sector in Ukraine, as well as through the development of capital markets and non-bank financing: The EBRD will contribute to the creation of a stable and efficient banking sector, a greater variety of non-bank financial channels and their use.
Improving Integration by Facilitating Trade and Investment, Enhancing Infrastructure Linkages and Supporting Convergence to EU Standards: The Bank will invest in improved connectivity through infrastructure improvements. It will also help increase trade and investment flows.
The European Bank for Reconstruction and Development in Ukraine provides significant assistance in the development of the country’s economy. The Bank continues to actively cooperate with state and private companies, helping to improve the financial climate in the country. In the coming years, the EBRD in Ukraine plans to increase the investment potential of the economy to strengthen the state economy in the international arena.
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