EBRD to increase investment in seven poorest CIS countries

ITAR-TASS
April 19, 2004

MOSCOW, April 19 — The European Bank for Reconstruction and
Development (EBRD) announces plans to increase investments in Armenia,
Azerbaijan, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan
to help them fight poverty.

In order to help the seven poorest CIS nations, the EBRD is ready to
take great risk and increase investments and donor financing. “The Bank
is ready to take on the risk as we seek to invest more in countries
at the earlier stages of transition,” EBRD President Jean Lemierre
said at the Board of Governors Annual Meeting in London on April 18-19.

In his words, more tan 50 percent of people in Armenia, Azerbaijan,
Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan live
in poverty. The economy of these countries is less consistent
with market standards than the economy of other countries. A large
state debt complicates foreign borrowing for economic development and
social needs. Other obstacles to borrowing are underdeveloped markets,
the closed borders, lack of banking and other services, insufficient
infrastructures in these countries.

The EBRD will invest in the private banking sector to enable it to
small and medium-size business in these countries, as well as the
housing and communal sector, energy sector and transport.

“We will finance the kind of projects that we have found work best
in these circumstances: small businesses, microfinance, investment
to facilitate cross-border trade, small-scale infrastructure,”
Lemierre said.

He said the EBRD might invest from 500,000 to two million euros in
these projects.

In addition, Lemierre asked the donor nations to increase their grants
to the EBRD for use in other countries. He said additional grants
would allow the bank to invest up to 150 million euros in each of
these countries annually (currently it invests 90 million euros).

“We cannot do this on our own,” Lemierre continued. “In order to
strengthen the initiative, the Bank has invited donor countries to
contribute to provide technical cooperation, and to help prepare and
co-finance projects. But the EBRD takes the full burden of added risk
on its own books.”