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Donor funding channelled through the EBRD has reached a milestone of €1bn, according to the bank’s new report on these “technical cooperation” (TC) funds. Of the cumulative total between 1991 and the end of 2002, the EU led in TC funding with €413mn in grants, followed by

  • Japan with €134mn, the US with €87mn, Italy with €68mn and the UK with €49mn.

    International organisations and individual governments and their agencies also join the EBRD in financing ventures in the bank’s region of operations. Such “official co-financing” reached a record €1.14bn in 2002 alone. Among the leading co-financiers were the Black Sea Trade and Development Bank, the European Investment Bank, the World Bank’s IFC and the EU.

    Donor funds complement lending in addressing specific aspects of individual investments and larger initiatives to underpin the transition of former communist countries to market economies. Such donor-funded work includes:

    • Educating banks in lending to micro- and small businesses

    • Helping governments reform outdated commercial and anti-corruption laws

    • Matching retired business executives with struggling businesses needing advice in modern production, management and marketing methods

    • Supporting improvements in municipal water and transport infrastructure, with significant benefits for the consumer and the environment.

    One of the biggest challenges facing the bank and its partners is to do more in the poorest member countries in the Caucasus and Central Asian regions. The investment climate in these countries remains difficult, and coordination with donors and co-financiers is essential to make progress with investment and advisory work. In these countries, as elsewhere in the region, the bank emphasises micro and small-enterprise finance, recognising the link between promoting entrepreneurial initiative at the grassroots level and consequent emergence of civil society which could underpin stronger political and economic reform that defines transition.