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Donor partnerships bring change to EBRD region
Small business programme major beneficiary
Donor funding channelled through the EBRD has reached a milestone of €1 billion, according to the Bank's just-released report on these "technical cooperation" (TC) funds. Of the cumulative total between 1991 and the end of 2002, the European Union led in TC funding with €413 million in grants, followed by Japan with €134 million, the United States with €87 million, Italy with €68 million and the United Kingdom with €49 million.
International organisations and individual governments and their agencies also join the EBRD in financing ventures in the Bank's region of operations. Such "official co-financing" reached a record €1.14 billion in 2002 alone. Among the leading co-financiers were the Black Sea Trade and Development Bank, the European Investment Bank, the World Bank's International Finance Corporation and the EU.
Donor funds complement lending in addressing specific aspects of individual investments and larger initiatives to underpin the transition of former communist countries to market economies. Such donor-funded work includes:
educating banks in lending to micro- and small businesses
helping governments reform outdated commercial and anti-corruption laws
matching retired business executives with struggling businesses needing advice in modern production, management and marketing methods
supporting improvements in municipal water and transport infrastructure, with significant benefits for the consumer and the environment.
EBRD President Jean Lemierre said the EBRD's partnerships with donors and co-financiers are bringing real change to our region, accelerating transition impact and ensuring sustainability. Donor funding in 2002 alone was €101.7 million.
One of the biggest challenges facing the Bank and its partners is to do more in the poorest member countries in the Caucasus and Central Asian regions. The investment climate in these countries remains difficult, and coordination with donors and co-financiers is essential to make progress with investment and advisory work. In these countries, as elsewhere in the region, the Bank emphasises micro- and small-enterprise finance, recognising the link between promoting entrepreneurial initiative at the grassroots level and consequent emergence of civil society which could underpin stronger political and economic reform that defines transition.
Indeed, there has been rapid growth in donor assistance to micro, small and medium enterprise lending programmes. Support has been provided by Canada, the EU, France, Germany, Italy, Japan, Switzerland, the UK and the US. These programmes are expanding into new countries and new regions, and now represent the largest element of donor funded assistance provided by the EBRD.
Small and medium enterprises are also benefiting from advice provided through the TurnAround Management and Business Advisory Services programmes. Significant support was provided during 2002 by the EU for work in Azerbaijan, Armenia, the EU Accession Countries and Georgia. A BAS office will be opened in Kaliningrad during 2003, with support from Finland, Luxembourg and Sweden.
In co-financing in 2002 Japan and Switzerland provided funds to purchase new buses and equipment for the Belgrade Municipal Infrastructure programme. To name another example, in Sofia, co-investment from the Netherlands provided a new bus ticketing system. Co-investment has also promoted trade between countries through the Trade Facilitation Programme.
Environmental projects were given a boost during 2002 through the creation of the Northern Dimension Environmental Partnership. The NDEP Fund will help support municipal environmental projects and nuclear waste clean-up in Northwest Russia. Funding is being provided by Denmark, EU, Finland, Norway, Russian Federation and Sweden, with other donors expected to join during 2003. Donor support for the environment is also being provided through the Global Environmental Facility and the Bank's programme for renewable energy.
The EBRD Annual Report to the Donor and Cofinancing Community is released each year at the time of the Bank's Annual Meeting. The Report is available online at www.ebrd.com/publications.
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