“Changed Geopolitical Environment”. EBRD Approves New Strategy For Belarus

The European Bank for Reconstruction and Development (EBRD) has adopted a new four-year strategy for Belarus, which outlines the Bank’s investment priorities in the country, the bank’s press-release said.

The strategy notes that in the recently changed regional geopolitical environment Belarus has engaged in greater international openness and become more willing to discuss domestic political developments, including the human rights situation in the country.

These positive developments, as well as the international response to these steps, “have created a new political context for the Bank’s operations in the country and provide an opportunity for enhanced engagement with the Belarusian authorities”, the strategy says.

In this context the EBRD is prepared to support concrete reform initiatives of the government with investments and technical assistance to develop the private sector, promote privatisation and enhance the sustainability of public infrastructure through commercial solutions. The strategy identifies the following strategic areas:

• Enhancing the competitiveness of the real economy: The EBRD will seek to provide long-term debt and equity financing to local and foreign investors as well as support small and medium-sized business (SME) lending through the development of a sustainable commercially oriented banking sector.

• Enhancing the sustainability and service quality of public infrastructure: The EBRD will encourage private sector participation in the provision of public infrastructure services. The Bank will also seek to support well-defined reform initiatives of the government in the municipal, transport, power and energy sectors through its investments and technical assistance.

It should be recalled that EBRD strategy for 2013-2015 did not involve financing of the Belarusian public sector due to the excessive state intervention in the economy and human rights violations. The Bank cooperates with private companies.

At a meeting with the President of the EBRD Sir Suma Chakrabarti, that took place in Minsk in February 2015, Alexander Lukashenko asked to remove “any restrictions on cooperation with Belarus”, particularly in relation to state-owned enterprises.

Suma Chakrabarti, in turn, said that the main question in the discussion of the new EBRD country strategy for Belarus would be the Government’s readiness for economic reforms.

EBRD spokesman Anton Usov told TUT.BY that the new strategy envisages a wide participation of the European Bank in the Belarusian economy. The key difference of the new strategy is that “the Bank is ready to finance projects in the public sector, but will try to attract private structures for the implementation of the project objectives”.

Since the start of its operations in Belarus in 1992, the EBRD has invested almost €1.8 billion in some 70 projects in various sectors of the country’s economy. Energy efficiency and climate change initiatives have traditionally played an important role in the Bank’s activities in the country and are expected to receive a further boost under GET.