European Bank for Reconstruction and Development

Annual Report 2014

This digital microsite for the EBRD Annual Report 2014 expands on the printed report

Introduction

In 2014 we increased our total annual investment to €8.9 billion and signed 377 projects across more than 30 emerging economies. These projects cemented the EBRD’s reputation as a reliable partner in times of need and produced a major contribution to the transition process, which is vital for sustainable long-term growth. Major areas of engagement alongside investment activities included support for reforms aimed at combating corruption and improving the business climate.

President’s message

2014 will be remembered as a year in which the EBRD overcame serious challenges, once again delivering significant investment and transition impact. Geopolitical tensions, market and currency volatility, and slowing growth were just some of the obstacles facing the Bank in many countries in which we work. In July, shareholders gave guidance to EBRD management that they would not, for the time being, approve new projects in Russia.

In this difficult operating context, the Bank demonstrated impressive flexibility, delivering results in line with its business plan. Annual Bank investment reached €8.9 billion across 377 operations, an increase of €355 million on the 2013 figure. These results were partly driven by the Bank’s ability to swiftly boost operations outside Russia. The EBRD stepped up its investments in Ukraine to help counter the worsening economic situation and support renewed reform efforts, committing over a billion euros to a wide range of private and public sector projects. We also performed strongly in central and eastern Europe and the Caucasus, south-eastern Europe, Turkey and the southern and eastern Mediterranean (SEMED) region.

Our activities in the SEMED countries – Egypt, Jordan, Morocco and Tunisia – are now firmly established. It is just two years since we started full investment there, at the behest of the international community, and already our total portfolio stands at over €1.7 billion. The SEMED region illustrates the relevance of the Bank’s business model in countries that have no history of central planning but are in transition to more efficient market economies. This was also evident in Cyprus, which became an EBRD recipient country in May 2014 and will remain so for a limited period until 2020. Within weeks of this development we made our first investment there – a testament to our capacity to move swiftly in supporting our clients.

2014 was also the year in which, at our Annual Meeting in Warsaw, Governors considered our new Medium-Term Directions (MTDs). These set the high-level strategic objectives of the organisation. Based on analysis showing that transition in the EBRD region has stalled in recent years, the MTDs aim to “re-energise transition” through three main areas: building transition resilience, through strong policies, institutions and economic structures; supporting market integration, to reinforce efficient markets and promote reform; and addressing common global and regional challenges such as climate change and food security.

In keeping with these priorities, we put further effort into policy dialogue. We launched an Investment Climate and Governance Initiative (ICGI) in coordination with national and international partners. The ICGI aims to build institutional frameworks that can improve the investment climate and combat corruption. Under the Initiative, we signed agreements with the Albanian, Moldovan, Serbian and Ukrainian governments to help them pursue reforms. We also launched the Ukraine Crisis Response Framework, the Small Business Initiative, the Sustainable Resource Initiative and the Strategic Gender Initiative, all of which combine investment activities, policy dialogue and capacity-building to ensure balanced impact.

The flexibility shown by the Bank in 2014 was supported by ongoing organisational improvements. Our programme of internal modernisation, designed to ensure that we provide the most efficient support to our countries, has made significant progress. We launched a People Management Framework and introduced compulsory training for managers to enhance their skills. The final pieces of the internal reform programme should be delivered by the end of 2015.

But we cannot afford to be complacent. Our region faces significant economic and geopolitical challenges. The global economic outlook is uncertain, with implications for our region in terms of trade, capital flows and other key areas.

In 2015 the United Nations will launch the Sustainable Development Goals, which will replace the Millennium Development Goals. The associated Financing for Development programme will tackle the implementation of the post-2015 development agenda and the 21st Conference of the Parties (COP 21) meeting will seek agreement on how to limit climate change.

In light of all the geopolitical and economic factors affecting the regions, our Governors will decide on the Bank’s future orientation, discussing the Strategic and Capital Framework (SCF) at our 2015 Annual Meeting in Tbilisi. Building on the MTDs agreed at the 2014 Warsaw Annual Meeting, the SCF will set the high-level strategic framework for EBRD operations in 2016-20.

Many of the challenges of 2014 remain with us, but I believe that the EBRD is in a strong position. The foundations have been laid for another demanding but impactful year.

Suma ChakrabartiSuma Chakrabarti
President, European Bank for Reconstruction and Development

Who we are

The EBRD is investing in changing people’s lives and environments from central Europe to Central Asia, the Western Balkans and the southern and eastern Mediterranean region. With an emphasis on working with the private sector, we invest in projects, engage in policy dialogue and provide technical advice that fosters innovation and builds sustainable and open-market economies.

The Bank is committed to promoting environmentally and socially sound and sustainable development. We seek to ensure that our projects are socially and environmentally sustainable, respect the rights of affected communities, and are designed and operated in compliance with applicable regulatory requirements and international good practices.

What we do

We provide direct financing for well-structured, financially robust projects of all sizes (including many small businesses), both directly and through financial intermediaries such as local banks and investment funds. The Bank works mainly with private sector clients, but also finances municipal entities and publicly owned companies. Our principal financing instruments are loans, equity investments and guarantees.

We maintain close policy dialogue with governments, authorities, international financial institutions, and representatives of civil society, and provide targeted technical assistance using funds donated by member governments and institutions.

map

Where we work

To read more about our work, go to the Activities section

COUNTRIES WHERE THE EBRD INVESTS

We invest in more than

30 countries

from central Europe to Central Asia, the Western Balkans and the southern and eastern Mediterranean.

Central Europe and the Baltic states

  • 01 Croatia
  • 02 Estonia
  • 03 Hungary
  • 04 Latvia
  • 05 Lithuania
  • 06 Poland
  • 07 Slovak Republic
  • 08 Slovenia

South-eastern Europe

  • 09 Albania
  • 10 Bosnia and Herzegovina
  • 11 Bulgaria
  • 12 FYR Macedonia
  • 13 Kosovo
  • 14 Montenegro
  • 15 Romania
  • 16 Serbia

Eastern Europe and the Caucasus

  • 17 Armenia
  • 18 Azerbaijan
  • 19 Belarus
  • 20 Georgia
  • 21 Moldova
  • 22 Ukraine

Central Asia

  • 23 Kazakhstan
  • 24 Kyrgyz Republic
  • 25 Mongolia
  • 26 Tajikistan
  • 27 Turkmenistan
  • 28 Uzbekistan

Southern and eastern Mediterranean

  • 29 Egypt
  • 30 Jordan
  • 31 Morocco
  • 32 Tunisia

Other

  • 33 Russia
  • 34 Turkey
  • 35 Cyprus

Key developments in 2014

€8.9 million

Annual bank investment

We invested in

34 countries

72% PRIVATE SECTOR SHARE OF ANNUAL BANK INVESTMENT

A record
€8.9 Billion
INVESTED UNDER THE
SUSTAINABLE RESOURCE INITIATIVE

SINCE 2012 OVER €1.7 BILLION
INVESTED IN THE SEMED REGION

€1.2 BILLION DIRECTLY MOBILISED FROM CO-FINANCIERS

Cyprus

BECAME AN EBRD RECIPIENT COUNTRY

81 local currency loan and bond transactions

Portfolio of investment operations increased to

€38.7 billion

Almost one-third of investments were in

early transition countries

170 sustainable energy projects

12

investments signed with a gender component

€8.9 million

Annual bank investment

We invested in

34 countries

72% PRIVATE SECTOR SHARE OF ANNUAL BANK INVESTMENT

A record
€8.9 Billion
INVESTED UNDER THE
SUSTAINABLE RESOURCE INITIATIVE

SINCE 2012 OVER €1.7 BILLION
INVESTED IN THE SEMED REGION

€1.2 BILLION DIRECTLY MOBILISED FROM CO-FINANCIERS

Cyprus

BECAME AN EBRD RECIPIENT COUNTRY

81 local currency loan and bond transactions

Portfolio of investment operations increased to

€38.7 billion

Almost one-third of investments were in

early transition countries

170 sustainable energy projects

12

investments signed with a gender component

Our policy dialogue and initiatives

We maintain close policy dialogue with governments, authorities, international financial institutions, and representatives of civil society. This policy dialogue helps create impact and makes a difference to both investors and communities in the countries where we invest. Our related policy initiatives blend investments with policy dialogue and targeted technical assistance to address common global and regional challenges, increase economic resilience, and promote recovery and growth across our region.

Our partners

Donor partnerships

Donors are active throughout the EBRD region and play a major part in the transition process by providing a range of funding that helps to prepare the way for Bank projects, foster reform and improve the investment climate. Donors are particularly active in those parts of our region facing the biggest obstacles to recovery and growth and in the infrastructure, sustainable energy and small business sectors. In 2014, they contributed €340.6 million in donor financing.

Engagement with civil society

We engage in open communication with a variety of civil society organisations, both international and those from the countries where we invest. Civil society provides local knowledge, technical expertise and innovative ideas, all of which contribute to the development of our policies, strategies and the implementation of projects. In this way, civil society enhances our effectiveness and impact across the region.

Donor partnerships

Donors are active throughout the EBRD region and play a major part in the transition process by providing a range of funding that helps to prepare the way for Bank projects, foster reform and improve the investment climate. Donors are particularly active in those parts of our region facing the biggest obstacles to recovery and growth and in the infrastructure, sustainable energy and small business sectors. In 2014, they contributed €340.6 million in donor financing.

Engagement with civil society

We engage in open communication with a variety of civil society organisations, both international and those from the countries where we invest. Civil society provides local knowledge, technical expertise and innovative ideas, all of which contribute to the development of our policies, strategies and the implementation of projects. In this way, civil society enhances our effectiveness and impact across the region.

How we work

Our reputation and future of the EBRD depend on the Bank’s integrity: we promote good corporate governance and high ethical standards in all our business. We also have a strong commitment to environmental and social sustainability. We recognise that EBRD staff are key to our success and we employ a highly skilled and diverse workforce with exceptional leadership abilities from across our region, and beyond.

EBRD organisation

As at April 2015

EBRD organisation chart

We invest in changing lives.