EBRD approves EUR 4 billion capital increase to finance Ukraine
EBRD to increase capital by EUR 4 billion to support Ukraine (ebrd.com)
The leadership of the European Bank for Reconstruction and Development (EBRD) has approved an increase in the bank's paid-up capital by 4 billion euros to 34 billion euros, according to the bank's press service.
"The additional capital from shareholders will be used to provide significant and sustained investment for Ukraine’s real economy, both in wartime and in reconstruction, and will help support the EBRD’s priorities in all economies where it operates," the statement said.
The EBRD has already provided Ukraine with over 3 billion euros in loans since Russia's invasion of the country in February 2022.
This latest step, following a recommendation made by the EBRD's Board of Directors in November 2023, completes the formal process of increasing the EBRD's statutory capital. The capital increase will take effect on December 31, 2024.
Capital increase
This is the third capital increase in the EBRD's history, following similar decisions in 1996 and 2010. It follows the bank's recognition in May 2023 that support for Ukraine should be the bank's top priority both now and in the future.
The additional capital will strengthen the EBRD, allowing it to maintain a steady level of annual investments in Ukraine of around 1.5 billion euros during times of conflict and have funds to increase its support to 3 billion euros annually after the start of reconstruction.
This increase will also provide the necessary strength for the bank to continue providing full support to other countries where it invests funds to address their transitional period challenges.
Shareholders will have the right to subscribe to additional shares. The first subscriptions are expected to be received in early 2024, with payments beginning in early 2025.
With Iraq becoming a shareholder in the EBRD in November 2023, the bank now has 72 national shareholders, in addition to the European Union and the European Investment Bank. The EBRD was founded in 1991 and has since invested over 190 billion euros in more than 6800 projects. EBRD investments are aimed at making the economies of regions competitive, well governed, green, inclusive, resilient and integrated.
EBRD investments in Ukraine
At the end of September, Ukrainian President Volodymyr Zelenskyy met with the President of the European Bank for Reconstruction and Development, Odile Rena-Basso.
Zelenskyy said that Ukraine is interested in continuing cooperation with the EBRD, particularly in the areas of energy security, trade financing, support for critical infrastructure and municipalities, food security, and the corporate sector.
Over the past 30 years, the EBRD has been the largest institutional investor in Ukraine, with a total investment volume of over 18 billion euros in more than 500 projects.
In October 2023, the EBRD set a goal to allocate at least 3 billion euros in financing to Ukraine's real economy in response to Russia's invasion.
