European Bank for Reconstruction and Development (EBRD) - Explained
What is the European Bank for Reconstruction and Development?
Written by J. Mance Gordon
Updated at April 21st, 2024
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What is the European Bank for Reconstruction and Development (EBRD)?
The European Bank for Reconstruction and Development (EBRD) is an international bank that was formed to assist Eastern European countries and ex-Soviet countries to uplift their economies and ensure a speedy transition of democracies into these countries. The EBRD was established in 1991 after the fall of the USSR with the purpose of helping the countries to develop free-market economies. Today, it has 27 countries which span from Central Asia to Central Europe.
What does the European Bank for Reconstruction and Development Do?
The EBRD is an international bank that financially assists those countries which are democratic and promote democratic principles. EBRD shareholders spread across 61 countries. Moreover, EBRD supports and assists programs that offer sustainable and environmentally friendly solutions. It only finances those sectors which are permitted by local law. It does not provide financial assistance for defense, the tobacco industry, and gambling, etc. EBRD encourages countries to transform publicly-owned assets to private entities to foster economic growth and productivity.
The Czech Republic is the only country of raw EBRD which has become a donor country from a recipient country. EBRD Funding The EBRD offers technical and financial assistance. It also provides financial support for equity financing, leasing, trade, and other development activities. The EBRD not only supports long-term projects, but it also supports micro-projects. The EBRD provides support for the privatization of state-owned companies and assistance to improve the operation of private companies. The EBRD provides financial support for different sectors including infrastructure, energy, manufacturing, tourism, transport, financial institutions, and agribusiness. Every recipient country must be committed to democratic principles, free market, focus on the private sector; sound banking practices and meet environmental sustainability standards.