The European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) seeks to develop the private sector in the former east bloc countries and also, since 2012, the countries on Europe’s southernmost border.
Switzerland is an active member of the Board of Directors and also implements development projects in conjunction with the EBRD.
Role and activities of the EBRD
The EBRD was established after the fall of the Berlin Wall. Its mission is to support transition in the countries formerly under Soviet influence in their efforts towards democracy and a market economy. Following the Arab Spring, the EBRD extended its mandate to a number of North African countries.
The EBRD’s activities are mainly directed at strengthening the private sector. It does this by supporting businesses in a wide variety of sectors by way of loans, guarantees and investing in equity capital. A third of the EBRD’s activities are devoted to reducing the carbon footprint of recipient countries.
Since 2004, Switzerland has been working with the EBRD to improve the water supply in Tajikistan and Kyrgyzstan. The project approach proved to be successful and has been replicated in numerous communities. The core element of this approach is to involve private sector firms in the operation of local utilities. These water companies receive the support they need to guarantee long-term profitability. For example, the fees for certain services are amended. The project also entails the refurbishment of water installations and raising awareness among consumers in relation to water issues.
Together with the EBRD, Switzerland campaigns for the strengthening of local financial markets and the granting of loans in local currencies. In other words, businesses receiving EBRD’s support are less exposed to currency risk.
The EBRD launched the Green Economy Transition approach to support implementation of the international climate targets and the 2030 Agenda for Sustainable Development. The Bank’s main objective is to make 40 percent of its annual investments in energy projects by 2020 (around € 4 billion a year). It intends to intensify its activities in renewable energy projects, water, waste management, distance heating and fosters innovative solutions. Switzerland strongly supports this approach and, together with the EBRD, assists communities in Central Asia to improve their water and wastewater systems as well as waste management.
Switzerland campaigns for the EBRD to replicate project approaches that have proven successful.
Switzerland and the EBRD
Switzerland has been a member of the EBRD since the establishment of the Bank in 1991 and has one member on the Board of Directors. The Swiss Director heads the constituency also comprising Ukraine, Serbia, Uzbekistan, Liechtenstein, Montenegro and Turkmenistan. Through its direct representation on the Board of Directors, Switzerland actively participates in the EBRD’s institutional and strategic decisions, thereby fulfilling its supervisory function as a shareholder.
Swiss objectives for cooperation with the EBRD
Apart from institutional cooperation on the Board of Directors, Switzerland and the EBRD cooperate on development projects. Switzerland’s main focus is on the following areas:
infrastructure projects in relation to water and waste management and
projects for strengthening small and medium-sized enterprises and local financial institutions.