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The European Bank for Reconstruction and Development
About Organization...
the European Bank for Reconstruction and Development (EBRD) was founded in 1991 with the purpose of rendering support to the countries of the Middle and Eastern Europe during their transition from the centralized planned economy to the market economy. The headquarters of the Bank are located in London. Among its sixty owners-shareholders are 58 countries, the European Investment Bank and the European Community. The main goal of the EBRD is the financing of the projects contributing to the development of the economy, however, despite this fact, the Bank realizes its activity, following the self-repayment principle. Having the maximum credit rating (ААА), the Bank can attract means on the international markets of capitals at the most favorable rates.
Geography of activity
Azerbaijan, Albania, Armenia, Belarus, Bulgaria, Bosnia and Herzegovina, Macedonia, Hungary, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Russian Federation, Romania, Slovak Republic, Slovenia, Tadjikistan, Turkmenisan, Uzbekistan, Ukraine, Croatia, Czech Republic, Estonia.
Financed branches
various. The following kinds of activity are not financed:
1) defense industry
2) tobacco industry;
3) production of the means/facilities forbidden by the international law;
4) gambling business;
5) production and processes that have negative influence on the environment.
Special requirements to the recipient of financing
1) Project in the private sector.
2) High degree of motivation and work experience of the management.
3) It is extremely desirable for the domestic investors to have a share in the share capital of the enterprise.
4) Is not required to have a foreign strategic partner, however its presence can increase the chances of the investment project receiving approval.
Form of financing
credits, investment in the share capita
Terms of financing
Minimum investment: 500 000
Maximum investment: 2 500 000
Period of investment: 3-7 years
Interest rate: LIBOR + credit margin
Characteristics of financing
the share of the EBRD in the sponsored project usually constitutes 25-30 %, but can be increased up to 49 % in the short-term plan. As a rule, within the framework of one investment project, the Bank aims at combining both forms of financing and grants no more than two thirds of the requested sum in the form of the loan proceeds and no less than one third - as the share capital. The interest rate on the credit can be either floating or fixed. The credit margin reflects both the insurance, and the commercial risks, and meets the market conditions of the syndicated credits. The settlement of the main debt is usually made by portions equal in size each half-year. According to the commercial practice, at signing the credit agreement, a one-time charge is withheld to cover the administrative expenses incurred by the Bank during the preparation of the project.
Documents necessary for receiving financing
the investment project that contains the following information: Operational and design information:
- Brief characteristic of the project.
- Initiators of the project.
- Operational experience in the given field.
- Financial condition of the enterprise
- Shareholders of the enterprise.
- Produce of the enterprise.
- Characteristic of production (location, production capacities and equipment, technology, raw and other materials, labor force).
- The market (target segment, planned share of the market, competition, price strategy, distribution and sales).
- Management. Financial information:
- Cost of the project with the accentuation of the elements.
- Procedure and schedule of the realization of activities involved in the project.
- Sources of financing (company's own capital, credits, other). Credit's security.
- Expected financial results of the activity (basic initial prerequisites, financial prognoses). Ecological and normative information:
- Location of the project's facility. Usage of the ground, allocated for the enterprise, in the past and now
- Description of any construction works or material changes, stipulated by the project. Measures suggested for relieving the influence on the environment and its improvement. Application about the allocation of the responsibilities in case of any kind of pollution and/or about giving account for it. Any information on the nature protection policy of the company. Information about the licenses and sanctions necessary for the realization of the project and the schedule of receiving them. Existence of any state subsidies for the raw materials. Existence of limitations on the import of the equipment (duties, quotas)
- Existence of limitations on the export of the goods
- Structure of the public utilities rates and other parameters, essential to the given project.
Documents' submission and consideration procedure
the enterprise should apply for information about the investment project financing to the head office of the EBRD in London or its representative office in Moscow, where the initial evaluation of the project takes place in order to determine whether it fits the Bank's directions of financing, and from where it is then readdressed to the appropriate department. The Bank appoints the leader of the operation to work on the project and be the contact person later on. The bank will not proceed to finance the project, until all the necessary information is available (see above). The potential borrowers are recommended to appeal to the Bank during the initial stage of work on the project with the purpose of receiving consultation on the possible structure of financing and the procedure of preparing the documents. Once the Bank has received all the necessary information, the period of drawing up the financing begins and usually lasts from 3 to 4 months, though for the less complex projects this period can be shortened. When preparing the documentation for the project, the applicants are strongly recommended to make use of the services of the experienced investment advisers.
Contact information
Contact person: Ms. Frances Reid, Senior Banker
Address: One Exchange Square, London EC2A 2JN, UK
Phone: (44 020) 7338 6000
Fax: (44 020) 7338 6100
E-mail: reidf@ebrd.com
Internet: http://www.ebrd.com
Additional information
representation of the EBRD in Russia: Dragica Pilipovic-Chaffey, director of the representative office. 121069, Moscow, Bolshaya Molchanovka Str., 36, building 1. Tel.: +7 095 787 1111 Fax: +7 095 787 1122
Attention of investors: If your organization is interested in investing to Voronezh region enterprises, please contact us for placing your information in this section.
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