19 Dec 2023 17:33

EBRD to increase its paid-in capital by 4 bln euros to support Ukraine

MOSCOW. Dec 19 (Interfax) - 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 euros, or 13%, to 34 billion euros to fund the EBRD projects in Ukraine and other countries where it operates, the bank said in a statement quoted by Ukrainian media.

"The additional capital from shareholders will be used to provide significant and sustained investment for Ukraine's real economy, [...] and will help support the EBRD's priorities in all economies where it operates," Ukrainian media quoted the bank's statement on Tuesday as saying.

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 euros, supported entirely by its own balance sheet, and to have the resources to increase its support up to 3 billion euros annually once reconstruction begins. The EBRD also noted that it had disbursed more than 3 billion euros to Ukraine since February 2022.

The resolution adopted by the banks' governors completes the formal process of increasing the EBRD's authorized capital, which was launched at the annual meeting in Samarkand in May this year, and the capital increase will take effect on December 31, 2024.

The bank noted that this is its third capital increase in its history, following similar decisions made 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 [EBRD] can continue to pursue its strategic priorities across all its regions," the statement said.

The shareholders will be entitled to subscribe for additional shares in line with the EBRD's founding agreement. The first applications are expected to be received in early 2024, with disbursements starting in early 2025.

The bank currently has 72 national shareholders alongside the European Union and the European Investment Bank after Iraq became its shareholder in November 2023. The EBRD was founded in 1991 and has since invested more than 190 billion euros in over 6,800 projects, including 19.03 billion euros in 559 projects in Ukraine. The current size of the bank's portfolio in Ukraine is 4.84 billion euros.

The EBRD ended 2022 with a net loss of 1.12 billion euros after a net profit of 2.5 billion euros a year earlier. Ukraine's share in the bank's subscribed capital is 0.8%, or 240.1 million euros.