European Bank for Reconstruction and Development (EBRD)
link to page 1 
Updated November 9, 2022
European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development
Membership
(EBRD), the first international financial institution of post-
The EBRD’s Articles of Agreement limit membership to
Cold War Europe, was founded in 1991 to ease the path of
European countries; non-European countries that are
the former communist countries of Central and Eastern
members of the IMF; the European Community (EC) (now
Europe (CEE) and the former Soviet Union from planned to
the European Union [EU]); and the European Investment
free-market economies. Its geographic area has expanded
Bank (EIB). The Articles also require that EC members , the
over time and, today, the EBRD finances projects in 37
EC, and the EIB hold a majority of the institution’s capital
countries throughout Europe, the Middle East, and Central
stock and a majority of the vote.
Asia. In October 2021, Algeria became the 73rd member of
the EBRD (71 countries as well as the European Union and
EBRD membership has grown in recent years as the Bank
the European Investment Bank). The United States is a
has expanded its geographic range. Libya became a
founding member of the EBRD and is the single largest
member in July 2019, marking an expansion of the Bank’s
shareholder with a 10% share of the Bank’s capital. U.S.
presence in the Mediterranean region. Other new members
membership in the EBRD is authorized by P.L. 101-513,
include Lebanon and the United Arab Emirates. At the
the European Bank for Reconstruction and Development
beginning of 2016, China became a non-borrowing member
Act (22 U.S.C. §290l et seq.).
of the EBRD, and contributes a small share (0.097%) of the
Bank’s capital.
The EBRD is headquartered in London, United Kingdom.
The Bank was originally designed to function differently
Operations and Select Policy Issues
than other multilateral development banks in two key ways:
It has been over 10 years since the EBRD’s last capital
first, it was given a political mandate to support democracy;
increase. In May 2010, the Board of Governors approved a
and second, it was designed to support the development of
request from the EBRD’s president for a €10 billion
the private sector in the former communist countries.
($11.05 billion) increase in authorized capital to €30 billion
Changes in Europe over the past two decades were viewed
($33.15 billion), a 50% rise from 2009 levels. Of the total
to make both mandates less pressing, leading the Bank to
authorized amount, €6.2 billion ($6.85 billion) is paid-in
expand its membership. Russia’s expanded war on Ukraine,
capital and €23.5 billion ($25.97 billion) is callable capital.
some argue however, underscores the importance of the
The Bank’s portfolio of operations increased from €48.4
EBRD maintaining robust operations in Eastern and Central
billion ($50.74 billion) in 2020 to €50.2 billion ($52.64
Europe. EBRD President Odile Renaud-Basso, former
billion by the end of 2021.
Director General of the French Treasury, was elected in
October 2020 for a four-year term.
While the EBRD continues disbursements on older projects,
as of 2021, the EBRD’s exposure to Russia accounted for
Political Mandate
2.9% of total EBRD operating assets, compared to around
Other multilateral development banks (MDBs) and the
26% in 2013. At the same time as it reduced its Russian
International Monetary Fund (IMF) have mandates to
exposure, the EBRD expanded its lending south into the
promote economic development and economic stability.
Balkans, the Caucasus, and the Southeastern Mediterranean
The EBRD’s mandate, in contrast, also includes political
(Figure 1).
factors, specifically to foster democracies and free-market
economies. Article 1 of the EBRD’s Articles of Agreements
Figure 1. EBRD Lending by Region, FY2021
states
In contributing to economic progress and
reconstruction, the purpose of the Bank shal 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 other major MDBs have Articles asserting
their members’ political independence, stating that the
MDB shall not interfere in the political affairs of any
Source: EBRD 2021 Annual Review.
member; nor shall they be influenced in their decisions by
the political character of the member or members
concerned.
https://crsreports.congress.gov
European Bank for Reconstruction and Development (EBRD)
In April 2008, Turkey, a founding shareholder of the
expansion. Members agreed to a limited amendment
EBRD, applied to become a recipient country and now
underscoring their intention to expand to sub-Saharan
accounts for 19% of EBRD operations, despite its status as
Africa and agreed to revisit the issue by the 2023 annual
an upper-middle income country. Moving forward, the
meeting.
EBRD will likely need to develop a more robust strategy to
“graduate” high-income member countries. To date, the
According to Devex, a news source, EBRD members
Czech Republic is the only country that has graduated from
stressed that “any limited and incremental expansion to sub-
EBRD borrowing.
Saharan Africa and Iraq would not in itself impair the
Bank’s ability to support its existing countries of
Ukraine
operations, compromis e the Bank’s triple-A credit rating, or
Ukraine is one of the EBRD’s largest borrowers, with
lead to a request for additional capital contributions.”
cumulative lending of more than €16 billion (about $17.58
Daniel Runde, a senior fellow at the Center for Strategic
billion) in 511 projects since 1996, including more than €1
and International Studies, argues that the EBRD should not
billion (about $1.2 billion) in 2021. Following Russia’s
expand to Africa, and instead should refocus its attention on
expanded invasion of Ukraine in 2022, the EBRD
its original mandate, and “help Ukraine and other post-
announced a €2 billion (about $2.2 billion) support package
Soviet states diversify their economies away from Russia.”
for the Ukrainian private sector. According to the Bank,
funding will be made available to support Ukrainian
Private-Sector Focus
companies through several mechanisms, such as deferred
Other MDBs have traditionally focused their economic
loans, liquidity support, and trade finance. In October 2022,
assistance on poverty alleviation and economic
the EBRD committed to provide Ukraine up to €3 billion by
development lending. Thus, the bulk of MDB lending tends
the end of 2023.
to be in infrastructure lending (construction, transportation
projects, etc.) and the provision of social services (health
The Biden Administration requested $500 million for the
and education, for example). The EBRD, on the other hand,
EBRD in the FY2022 Additional Ukraine Supplemental
makes project loans, equity investments, and guarantees
Appropriations Act, which became law on May 21, 2022
primarily to the private sector. EBRD assistance is
(P.L. 117-128). At the EBRD’s May 2022 annual meeting,
nonconcessional, and it does not have a concessional
Acting U.S. Treasury Under Secretary for International
lending window. In 2021, private-sector lending accounted
Affairs, Andy Baukol, argued that the additional funding
for 76% of total EBRD investment of €10.4 billion.
will “support EBRD interventions to counteract economic
Analysts at the UK’s Overseas Development Institute write
vulnerabilities caused by the war, including on the ground
the expansion to SSA is “welcome news” and that the
in Ukraine now and for reconstruction.” In August 2022,
EBRD’s “longstanding expertise in private sector
the Biden Administration nominated Richard L. A. Weiner,
development and green economy transition” would be
a lawyer at Sidley Austin, to be the U.S executive director
beneficial for SSA.
at the Bank. Mr. Weiner is awaiting a Senate Foreign
Relations Committee hearing on his nomination.
Looking Ahead
Over the past 30 years, the EBRD has been viewed as an
Russia
important component of U.S. foreign and economic policy
For much of the EBRD’s history, Russia was the Bank’s
in Eastern Europe and Central Asia. Russia’s aggression in
largest borrower. However, the G-7 countries decided to
Ukraine has underscored for many policymakers the
oppose EBRD projects (as well as World Bank projects) in
continuing importance of the EBRD’s work in promoting
Russia following its annexation of Ukraine’s Crimea
multiparty democracy and market economies. Some
region. Some analysts found EBRD’s involvement in
questions Members of Congress may consider include
Russia controversial even before the crisis in Ukraine,
questioning whether Russia had met the democracy and
Are EBRD resources sufficient?
pluralism criteria for EBRD projects.
What is the relevance of its political mandate as the
On April 4, 2022, EBRD members approved an operational
EBRD shifts its lending portfolio away from Russia and
suspension of Russia’s access to EBRD resources. This
toward the Southeastern Mediterranean region?
required approval of members holding three-quarters of
EBRD voting power and two-thirds of all members. Going
Does the political and economic environment within the
further, a senior European official, for example, told
EBRD’s clientele continue to justify the EBRD’s
Reuters that “there is on ongoing discussion to kick Russia
existence 30 years after the collapse of the Soviet Union
out of all international financial institutions.” Such actions,
and in light of the EBRD’s withdrawal from Russia?
some argue, would have little benefit to Ukraine and could
undermine the institutions’ ability to operate constructively
What are the criteria used to gauge whether a country
in Russia if there is a change of government in the future.
should graduate from the EBRD?
Expansion to Sub-Saharan Africa
In 2020, the Bank’s membership agreed that in 2022 they
would consider offering membership and lending services
Martin A. Weiss, Specialist in International Trade and
to sub-Saharan Africa (SSA), as well as Iraq. At the May
Finance
2022 annual meeting, members decided to prioritize the
Bank’s response to Russia’s war on Ukraine and postpone
IF11419
https://crsreports.congress.gov
European Bank for Reconstruction and Development (EBRD)
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permissio n of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11419 · VERSION 4 · UPDATED
Updated November 9, 2022
European Bank for Reconstruction and Development (EBRD)
The European Bank for Reconstruction and Development
Membership
(EBRD), the first international financial institution of post-
The EBRD’s Articles of Agreement limit membership to
Cold War Europe, was founded in 1991 to ease the path of
European countries; non-European countries that are
the former communist countries of Central and Eastern
members of the IMF; the European Community (EC) (now
Europe (CEE) and the former Soviet Union from planned to
the European Union [EU]); and the European Investment
free-market economies. Its geographic area has expanded
Bank (EIB). The Articles also require that EC members , the
over time and, today, the EBRD finances projects in 37
EC, and the EIB hold a majority of the institution’s capital
countries throughout Europe, the Middle East, and Central
stock and a majority of the vote.
Asia. In October 2021, Algeria became the 73rd member of
the EBRD (71 countries as well as the European Union and
EBRD membership has grown in recent years as the Bank
the European Investment Bank). The United States is a
has expanded its geographic range. Libya became a
founding member of the EBRD and is the single largest
member in July 2019, marking an expansion of the Bank’s
shareholder with a 10% share of the Bank’s capital. U.S.
presence in the Mediterranean region. Other new members
membership in the EBRD is authorized by P.L. 101-513,
include Lebanon and the United Arab Emirates. At the
the European Bank for Reconstruction and Development
beginning of 2016, China became a non-borrowing member
Act (22 U.S.C. §290l et seq.).
of the EBRD, and contributes a small share (0.097%) of the
Bank’s capital.
The EBRD is headquartered in London, United Kingdom.
The Bank was originally designed to function differently
Operations and Select Policy Issues
than other multilateral development banks in two key ways:
It has been over 10 years since the EBRD’s last capital
first, it was given a political mandate to support democracy;
increase. In May 2010, the Board of Governors approved a
and second, it was designed to support the development of
request from the EBRD’s president for a €10 billion
the private sector in the former communist countries.
($11.05 billion) increase in authorized capital to €30 billion
Changes in Europe over the past two decades were viewed
($33.15 billion), a 50% rise from 2009 levels. Of the total
to make both mandates less pressing, leading the Bank to
authorized amount, €6.2 billion ($6.85 billion) is paid-in
expand its membership. Russia’s expanded war on Ukraine,
capital and €23.5 billion ($25.97 billion) is callable capital.
some argue however, underscores the importance of the
The Bank’s portfolio of operations increased from €48.4
EBRD maintaining robust operations in Eastern and Central
billion ($50.74 billion) in 2020 to €50.2 billion ($52.64
Europe. EBRD President Odile Renaud-Basso, former
billion by the end of 2021.
Director General of the French Treasury, was elected in
October 2020 for a four-year term.
While the EBRD continues disbursements on older projects,
as of 2021, the EBRD’s exposure to Russia accounted for
Political Mandate
2.9% of total EBRD operating assets, compared to around
Other multilateral development banks (MDBs) and the
26% in 2013. At the same time as it reduced its Russian
International Monetary Fund (IMF) have mandates to
exposure, the EBRD expanded its lending south into the
promote economic development and economic stability.
Balkans, the Caucasus, and the Southeastern Mediterranean
The EBRD’s mandate, in contrast, also includes political
(Figure 1).
factors, specifically to foster democracies and free-market
economies. Article 1 of the EBRD’s Articles of Agreements
Figure 1. EBRD Lending by Region, FY2021
states
In contributing to economic progress and
reconstruction, the purpose of the Bank shal 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 other major MDBs have Articles asserting
their members’ political independence, stating that the
MDB shall not interfere in the political affairs of any
Source: EBRD 2021 Annual Review.
member; nor shall they be influenced in their decisions by
the political character of the member or members
concerned.
https://crsreports.congress.gov
European Bank for Reconstruction and Development (EBRD)
In April 2008, Turkey, a founding shareholder of the
expansion. Members agreed to a limited amendment
EBRD, applied to become a recipient country and now
underscoring their intention to expand to sub-Saharan
accounts for 19% of EBRD operations, despite its status as
Africa and agreed to revisit the issue by the 2023 annual
an upper-middle income country. Moving forward, the
meeting.
EBRD will likely need to develop a more robust strategy to
“graduate” high-income member countries. To date, the
According to Devex, a news source, EBRD members
Czech Republic is the only country that has graduated from
stressed that “any limited and incremental expansion to sub-
EBRD borrowing.
Saharan Africa and Iraq would not in itself impair the
Bank’s ability to support its existing countries of
Ukraine
operations, compromis e the Bank’s triple-A credit rating, or
Ukraine is one of the EBRD’s largest borrowers, with
lead to a request for additional capital contributions.”
cumulative lending of more than €16 billion (about $17.58
Daniel Runde, a senior fellow at the Center for Strategic
billion) in 511 projects since 1996, including more than €1
and International Studies, argues that the EBRD should not
billion (about $1.2 billion) in 2021. Following Russia’s
expand to Africa, and instead should refocus its attention on
expanded invasion of Ukraine in 2022, the EBRD
its original mandate, and “help Ukraine and other post-
announced a €2 billion (about $2.2 billion) support package
Soviet states diversify their economies away from Russia.”
for the Ukrainian private sector. According to the Bank,
funding will be made available to support Ukrainian
Private-Sector Focus
companies through several mechanisms, such as deferred
Other MDBs have traditionally focused their economic
loans, liquidity support, and trade finance. In October 2022,
assistance on poverty alleviation and economic
the EBRD committed to provide Ukraine up to €3 billion by
development lending. Thus, the bulk of MDB lending tends
the end of 2023.
to be in infrastructure lending (construction, transportation
projects, etc.) and the provision of social services (health
The Biden Administration requested $500 million for the
and education, for example). The EBRD, on the other hand,
EBRD in the FY2022 Additional Ukraine Supplemental
makes project loans, equity investments, and guarantees
Appropriations Act, which became law on May 21, 2022
primarily to the private sector. EBRD assistance is
(P.L. 117-128). At the EBRD’s May 2022 annual meeting,
nonconcessional, and it does not have a concessional
Acting U.S. Treasury Under Secretary for International
lending window. In 2021, private-sector lending accounted
Affairs, Andy Baukol, argued that the additional funding
for 76% of total EBRD investment of €10.4 billion.
will “support EBRD interventions to counteract economic
Analysts at the UK’s Overseas Development Institute write
vulnerabilities caused by the war, including on the ground
the expansion to SSA is “welcome news” and that the
in Ukraine now and for reconstruction.” In August 2022,
EBRD’s “longstanding expertise in private sector
the Biden Administration nominated Richard L. A. Weiner,
development and green economy transition” would be
a lawyer at Sidley Austin, to be the U.S executive director
beneficial for SSA.
at the Bank. Mr. Weiner is awaiting a Senate Foreign
Relations Committee hearing on his nomination.
Looking Ahead
Over the past 30 years, the EBRD has been viewed as an
Russia
important component of U.S. foreign and economic policy
For much of the EBRD’s history, Russia was the Bank’s
in Eastern Europe and Central Asia. Russia’s aggression in
largest borrower. However, the G-7 countries decided to
Ukraine has underscored for many policymakers the
oppose EBRD projects (as well as World Bank projects) in
continuing importance of the EBRD’s work in promoting
Russia following its annexation of Ukraine’s Crimea
multiparty democracy and market economies. Some
region. Some analysts found EBRD’s involvement in
questions Members of Congress may consider include
Russia controversial even before the crisis in Ukraine,
questioning whether Russia had met the democracy and
Are EBRD resources sufficient?
pluralism criteria for EBRD projects.
What is the relevance of its political mandate as the
On April 4, 2022, EBRD members approved an operational
EBRD shifts its lending portfolio away from Russia and
suspension of Russia’s access to EBRD resources. This
toward the Southeastern Mediterranean region?
required approval of members holding three-quarters of
EBRD voting power and two-thirds of all members. Going
Does the political and economic environment within the
further, a senior European official, for example, told
EBRD’s clientele continue to justify the EBRD’s
Reuters that “there is on ongoing discussion to kick Russia
existence 30 years after the collapse of the Soviet Union
out of all international financial institutions.” Such actions,
and in light of the EBRD’s withdrawal from Russia?
some argue, would have little benefit to Ukraine and could
undermine the institutions’ ability to operate constructively
What are the criteria used to gauge whether a country
in Russia if there is a change of government in the future.
should graduate from the EBRD?
Expansion to Sub-Saharan Africa
In 2020, the Bank’s membership agreed that in 2022 they
would consider offering membership and lending services
Martin A. Weiss, Specialist in International Trade and
to sub-Saharan Africa (SSA), as well as Iraq. At the May
Finance
2022 annual meeting, members decided to prioritize the
Bank’s response to Russia’s war on Ukraine and postpone
IF11419
https://crsreports.congress.gov
European Bank for Reconstruction and Development (EBRD)
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permissio n of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11419 · VERSION 4 · UPDATED