EBRD pledges more support for Ukraine with capital boost

7:55 am Thursday, May 18th, 2023

SAMARKAND, Uzbekistan (Reuters) -At a meeting in Russia’s former Central Asian backyard, the European Bank for Reconstruction and Development on Thursday pledged further support for war-torn Ukraine with plans to increase its capital by 3 billion-5 billion euros.

The emerging markets lender has already earmarked 3 billion euros for Ukraine – which is fighting off a Russian invasion – to be invested in 2022-23, and EBRD President Odile Renaud-Basso told its annual meeting assistance would continue.

“Increasing paid-in capital will give us the means to sustain such level of investment and step up our investment (in Ukraine),” she told a briefing in the Uzbek city of Samarkand.

The bank’s statement said a detailed proposal on a paid-in capital increase would be prepared by the end of this year. For every billion euros of additional capital, the bank can extend a few billion in fresh loans.

“As I said to the bank’s governors this morning, Ukraine is the bank’s top priority,” Renaud-Basso said.

The multilateral development bank’s support has so far focused on maintaining and repairing essential infrastructure, financing energy companies and supporting Ukraine’s foreign trade, she said.

“(We are) supporting also the private sector, food industry, SMEs,.. that are absolutely fundamental to keep the economy going and keeping the jobs and providing those resources.”

Renaud-Basso said EBRD shareholders had also approved plans to expand operations to sub-Saharan Africa and Iraq, where the bank plans to start lending in 2025.

The EBRD has halted its work in Russia but boosted its presence in the former Soviet region of Central Asia, where it is now promoting the development of transport corridors bypassing Russian territory.

Underscoring regional sensitivities, Ukraine itself, despite being the key beneficiary of the meeting, reduced its delegation to a single representative after expressing dismay with the presence of several leaders, including Uzbek President Shavkat Mirziyoyev, at a Victory Day parade in Moscow this month. ($1 = 0.9084 euros)

(Reporting by Olzhas Auyezov; Editing by Alison Williams, Mark Heinrich and Alex Richardson)