By Richard Porter

The European Bank for Reconstruction and Development (EBRD) has received commitments heading towards €1 billion(US$1.04billion) in donor funds to support its response to the war on Ukraine.

These funds, some of which are subject to national approval processes, will be used alongside the Bank’s own to help infrastructures and companies in Ukraine and other affected countries deal with the consequences of the Russian-led invasion.

The commitments were made during the Bank’s 2022 Annual Meeting and Business Forum held in Marrakech, Morocco.

The Bank’s Governors – who represent its 73 shareholders – expressed their solidarity with Ukraine and signalled their strong support for the EBRD’s efforts to respond to the crisis.

They also asked the Bank to be ready to play an active part in the country’s reconstruction in the future.

Work in Ukraine is already underway, yesterday the Bank signed a deal to support Ukraine’s electricity transmission company, Ukrenergo, with strong backing from EU guarantees. Today the EBRD signed another deal to underpin food security, enabling Ukrainian agribusinesses to access funding facilities they urgently need.

The EBRD has pledged to invest an initial €1 billion this year in support of the Ukrainian economy, which will be a mix of donor and the Bank’s own funding.

A second resolution approved at the Annual Meeting backed in principle the Bank’s proposed expansion of activities into sub-Saharan Africa and Iraq.

This will not happen yet, because the Bank will be focusing intensively on helping in Ukraine and other countries affected by the war, and will lead to further discussions with its shareholders about the implementation of this decision.

This was the first Annual Meeting to be held in person since 2019, and the first to take place on the African continent.

More than 1,500 delegates attended and took part in discussions highlighting the Bank’s work in 38 economies, and in priority areas such as climate change mitigation, equality of opportunity, and the shift to digital.

It took place against the economic backdrop of rising prices, supply chain problems, concerns about energy and food security, and with the effects of the Covid pandemic still being felt. The EBRD’s latest economic forecasts published earlier this week showed a marked down in growth forecasts, largely as the knock-on consequence of the war on Ukraine, since the previous projections released at the end of March.

The Bank has a strong track record of dealing with crises in its countries, and was the first international institution to announce a Resilience Package for Ukraine.

EBRD President Odile Renaud-Basso said: “We have a clear strategy for our response to Ukraine, and it is already being implemented. I am very grateful for the support from our shareholders, and the donor funds will enable us to deliver impact in Ukraine in 2022 and beyond.

“Because of the war we are being asked to provide more support in areas like working capital and emergency funding, and we are adapting very quickly to the changing needs.

“As for the future reconstruction, the EBRD will have a very important role to play as the largest institutional investor in the country. We will be ready for this when the time comes.”