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Development aid that works
Donor funding successfully catalyses investment in EBRD region
At a time when development aid is falling and donor governments are
questioning its cost-effectiveness, an EBRD report released today shows that
grant funding channelled via the EBRD clearly meets donors’ goal of boosting
economic development.
Noreen Doyle, the EBRD First Vice President, said grants from donors pave the
way for subsequent project financing by the EBRD and others and account for a
large part of the Bank’s success in investing in central and eastern Europe.
Over the past decade, €650 million in donor grants have supported €35 billion
in financing by the EBRD and its partners, said Fabrizio Saccomanni, the
EBRD’s Vice President with responsibility for donor relations. The EBRD uses
the grants to help prepare EBRD projects and ensure their successful
implementation. Grants also fund consultants to advise governments on
necessary legal, regulatory and sectoral reforms that improve the investment
climate.
Local financial institutions in which the EBRD invests are the main
beneficiaries of this donor-funded advice. That is because new and improved
financial intermediaries – such as banks, leasing and insurance companies –
are fundamental to the transition to market economies.
In particular, donor funds have helped build up banking services for micro,
small and medium-sized business, boosting credit availability for the
entrepreneurial engines of local economies. Donor-funded expertise, combined
with financing, also helps governments improve public services such as waste
water, heating and power generation, and transport.
Donor commitment is increasingly important as the EBRD increases its
investments in the seven poorest countries in its region: Armenia, Azerbaijan,
Georgia, the Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan.
The report, Technical cooperation: Catalyst for investment, is available from
the EBRD publications desk at the Bank’s annual meeting 18-19 April; or e-mail
pubsdesk@ebrd.com or call +44 20 7338 7553 for a copy; or download it from
www.ebrd.com/pubs/index.htm.
The EBRD, which is owned by 60 countries and two intergovernmental
institutions, aims to foster the transition from centrally planned to market
economies in central and eastern Europe and the Commonwealth of Independent
States.
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