By Nigina Mirbabaeva
The governors of the European Bank for Reconstruction and Development (EBRD) have approved a resolution to increase the Bank’s paid-in capital by €4 billion(US$4.4billion), bringing its capital base to €34 billion.
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 EBRD has already deployed more than €3 billion in Ukraine since Russia’s invasion of the country in February 2022.
This final step, which follows a recommendation submitted by the EBRD’s Board of Directors in November 2023, concludes the formal process of increasing the EBRD’s authorised capital stock. The capital increase will take effect on December 31,2024.
This is the third capital increase in the EBRD’s history, following similar decisions in 1996 and 2010. It follows the governors’ recognition in May 2023 that supporting Ukraine should be the Bank’s highest priority – now and in the future – while also ensuring that it can continue to pursue its strategic priorities across all its regions.
EBRD President Odile Renaud-Basso said: “This is a historic moment for the EBRD. The decision by our shareholders reaffirms their confidence in the Bank, with its unique mission and business model focused on delivering impact.”
“The increase in the Bank’s capital will enable us to deliver more and become an even stronger Bank – a stronger Bank for Ukraine, a stronger Bank for all our economies and clients, and a stronger Bank for our shareholders,” the President added.
The additional capital will strengthen the EBRD, enabling it to continue providing a sustained level of annual investment in Ukraine of around €1.5 billion during wartime, supported entirely by its own balance sheet, and to have the means to increase its support up to €3 billion annually once reconstruction begins.
The increase will also ensure that the Bank is strong enough to continue fully supporting the other economies where it invests in tackling their transition challenges.
Shareholders will be entitled to subscribe to the additional shares in accordance with Article 5.3 of the Agreement Establishing the EBRD. The first subscriptions are expected to be received in early 2024, with payments starting from early 2025.
With Iraq becoming an EBRD shareholder 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 more than €190 billion in more than 6,800 projects. EBRD investments are aimed at making the economies in its regions competitive, well governed, green, inclusive, resilient and integrated.
