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![handle is hein.crs/govejiu0001 and id is 1 raw text is: European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development
(EBRD), the first international financial institution ofpost-
Cold War Europe, was founded in 1991 to ease the path of
the former communist countries of Central and Eastern
Europe (CEE) and the former Soviet Union fromplannedto
free-market economies. Its geographic area has expanded
over time and, today, the EBRD finances projects in 37
countries throughout Europe, the Middle East, and Central
Asia. In October 2021, Algeria became the 73rd member of
the EBRD (71 countries as well as the European Union and
the European Investment Bank). The United States is a
founding member of the EBRD and is the single largest
shareholder with a 10% share ofthe Bank's capital. U.S.
membership in the EBRD is authorized by P.L. 101-513,
the European Bankfo rReconstruction andDevelopment
Act (22 U.S.C. §2901 et seq.).
The EBRD is headquartered in London, United Kingdom.
The Bankwas originally designedto function differently
than other multilateral development banks in two key ways:
first, it was given a politicalmandate to support democracy;
and second, it was designedto support thedevelopment of
the private sector in the former communist countries.
Changes in Europe over the past two decades were viewed
to make both mandates less pressing, leading the Bankto
expand its membership. Russia's expanded waron Ukraine,
some argue however, underscores the importance of the
EBRD maintaining robust operations in Eastern and Central
Europe. EBRD PresidentOdile Renaud-Basso, former
Director Generalof the French Treasury, was elected in
October 2020 for a four-year term.
Political Mandate
Other multilateral development banks (MDBs) and the
International Monetary Fund (IMF) have mandates to
promote economic development and economic stability.
The EBRD's mandate, in contrast, also includes political
factors, specifically to foster democracies and free-market
economies. Article 1 ofthe EBRD's Articles of Agreenrnts
states
In contributing to economic progress and
reconstruction, the purpose of the Bank shall be to
foster the transition towards open market-oriented
economies and to promote private and
entrepreneurial initiative in the Central and Eastern
European countries committed to and applying the
principles of multiparty democracy, pluralism and
market economics.
In contrast, the othermajorMDBs have Articles asserting
their members' politicalindependence, stating that the
MDB shall not interfere in the political affairs of any
member; nor shall they be influenced in their decisions by
the political character of the member or members
concerned.
Members hi p
The EBRD's Articles ofAgreement limit membership to
European countries; non-European countries that are
members of the IMF; the European Community (EC) (now
the European Union [EU]); and the European Investment
Bank (EIB). The Articles also require thatEC members, the
EC, and the EIB hold a majority ofthe institution's capital
stock and a majority of the vote.
EBRD membership has grownin recent years as the Bank
has expanded its geographic range. Libya became a
member in July 2019, marking an expansion of the Bank's
presence in the Mediterranean region. Other new members
include Lebanon and the United Arab Emirates. At the
beginning of2016, China became a non-borrowing member
of the EBRD, and contributes a small share (0.097%) of the
Bank's capital.
Operations and Select Policy Issues
It has been over 10years since the EBRD's last capital
increase. In May 2010, the Board ofGovernors approved a
requestfromthe EBRD's presidentfora(10 billion
($11.05 billion) increase in authorized capitalto 30 billion
($33.15 billion), a50% rise from2009 levels. Of the total
authorized amount, (6.2 billion ($6.85 billion) is paid-in
capital and 23.5 billion ($25.97 billion) is callable capital.
The Bank's portfolio of operations increased fromE48.4
billion ($50.74 billion) in 2020 to (50.2 billion ($52.64
billion by the end of 2021.
While the EBRD continues disbursements on older projects,
as of2021, the EBRD's exposure to Rus sia accounted for
2.9% of total EBRD operating assets, compared to around
26% in 2013. At the same time as it reduced its Russian
exposure, the EBRDexpanded its lending southinto the
Balkans, the Caucasus, and the Southeastern Mediterranean
(Figure 1).
Figure 1. EBRD Lending by Region, FY202 I
21
Source: EBRD 2021 Annual Review.
Updated November 9, 2022](ViewImageLocal?handle=hein.crs/govejiu0001&div=1&collection=&method=preview&ext=.png&size=3)