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Donors approve EUR4.3m for new projects in poor states
Money from €14.8m fund to spur investment in Early Transition Countries
Donor governments today approved grant funding of €4.3 million for 10
EBRD-managed projects to improve prospects for economic development in the
Bank’s seven poorest countries of operation. These seven “Early Transition
Countries” (ETCs) are Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova,
Tajikistan and Uzbekistan; all are part of the Commonwealth of Independent
States.
These are the first projects supported by the new multi-donor ETC Fund
approved by the EBRD’s Board of Directors earlier this month. To launch the
fund a total of €14.8 million has been pledged by Finland, Ireland, Japan,
Netherlands, Sweden, Switzerland, Taipei China and the United Kingdom. More
donors are soon expected to join the Fund, with more commitments in the
offing. Many individual governments and other donors also support the ETC
initiative through “bilateral” funding channelled directly to specific ETC
projects. Crucially, the Organisation for Economic Cooperation and Development
has signalled that the ETC Multi-Donor Fund qualifies as Official Development
Assistance. This makes it more attractive for countries to contribute, noted
Fabrizio Saccomanni, EBRD Vice President with responsibility for donor
relations.
The EBRD focuses on supporting sustainable private-sector investments, but
doing so is particularly challenging in the ETCs because the business,
regulatory and legal environments are in the early stages of development.
Grants from donors will encourage the transition of these seven former Soviet
republics from centrally planned to market economies, a process in which the
ETCs have lagged the rest of the region.
The projects approved today promote a range of activities that will encourage
development of the private sector across the ETCs. They include:
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preparation of a sustainable programme for training commercial court judges in
the Kyrgyz Republic
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assistance to promote telecommunications-related enterprises and rural
telecommunications in the Kyrgyz Republic
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business advisory services for small and medium-sized businesses and rural
communities in a number of ETCs
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funds to help fast-growing local enterprises prepare for potential EBRD
investment (loans or equity)
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helping companies and governments prepare projects that would qualify for
Kyoto Protocol-style carbon emissions trading by funding improvements in
energy efficiency and renewable energy
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and policy dialogue and regulatory reform to improve municipal utilities in
Uzbekistan while ensuring services are still affordable for the poorest
citizens.
EBRD lending and equity investments in the non-oil and gas sectors in the ETCs
are also rising, with 22 projects signed so far in 2004 versus 16 in all of
2003.
The donors elected Jessica Irvine, representing the UK government, as Chair of
the Multi-Donor Fund and Susumu Fujimoto of Japan as Vice-chair.
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