EIB, World Bank Group, and EBRD beat funding targets, set template for future cooperation
The European Investment Bank, the World Bank Group* and the European Bank for Reconstruction and Development
have delivered a crucial lifeline to the economies of central and
south-eastern Europe with a financial package that provided much-needed
funding and contributed to stability in the face of major economic
challenges. 
The three institutions launched their Joint IFI Action Plan (JIAP) for Growth for the region in November 2012, when recovery from the global crisis was under threat and funding from abroad was drying up.
With
a pledge to provide support of at least €30 billion by the end of 2014,
they aimed to stabilise financial systems in the region and ensure that
finance kept flowing to key economic sectors.
By
the end of July 2014, the three international financial institutions
(IFIs) had already overtaken their target with joint financing of €33.6
billion, and were still investing strongly in the region. All three IFIs
plan to provide continued financing as needed.
In
addition, the IFIs’ joint work on the initiative has provided a solid
base for further cooperation that is already being applied beyond the
JIAP region, for example, in providing financial support to Ukraine.
The President of the European Investment Bank, Werner Hoyer,
commented: “The programme has made a huge contribution to the overall
financing of the countries of central and south-eastern Europe and to
many hundreds of projects which are crucial to the strengthening and
transformation of their economies. The EIB has provided under the joint
initiative more than €20 billion, which underlines the strong commitment
by the EU Bank to support the region. It also leaves a legacy of
cooperation between the three IFIs that should endure and help them
serve better the needs of the countries where they are active.”
Laura Tuck, World Bank Vice President for Europe and Central Asia,
emphasised that “The Joint IFI Action Plan has been critical in
ensuring continuous external funding for governments and the financial
sector in central and south-eastern Europe, amid geopolitical
uncertainty and timid economic recovery. Since the beginning of the
year, the contribution of the World Bank Group has increased by over €3
billion in support of broad policy reforms and investments that promote
competitiveness, job-friendly growth and social inclusion. For example,
the World Bank is supporting reforms to the governance framework of
state-owned enterprisesand
the liberalisation of wholesale energy markets in Romania. Moreover, in
Poland, a series of Development Policy Loans has helped to improve the
efficiency of the country’s social assistance programs and to increase
the last-resort minimum income benefits for vulnerable households. We
have also supported the government’s long-term institutional reform
efforts and structural reforms to the budget, labour and financial
markets, and encouraged private-sector innovation.”
“Working
alongside our partners, IFC has been supporting the private sector
through investments and advisory services in infrastructure,
manufacturing, agribusiness, services and trade,” said Dimitris Tsitsiragos, IFC Vice President.
“We took steps to help ensure that the banks operating in the region
are adequately financed by providing long-term funding and equity, so
that finance continues to flow to businesses and people that need it.
IFC also helped set up Distressed Assets Recovery Programs that are
helping to clear up the non-performing loans which plague the region.”
MIGA
continued to support the financial sector by providing guarantees to
entities in the financial sector in countries hit by the global crisis. Keiko Honda, MIGA’s Executive Vice President and CEO noted:
“Through these guarantees, the Agency continued to bolster the region’s
financial sector.” She added, “Our aim is to assist growth in this
region as countries seek financial stabilization following undeniably
challenging times.”
EBRD President Sir Suma Chakrabarti
said: “At this time of heightened political uncertainty, investments
from the IFIs to shore up energy security have assumed a particular
importance in addition to the crucial steps that have been taken to
ensure a flow of credit to the real economy. This support will remain in
place as we continue to reach out collectively to support and
strengthen the economies of the region.”
The
plan prioritised funding to small- and medium-sized enterprises (SMEs)
that are key to job creation and innovation in Europe, filling a
financing gap as parents of western banks retrenched. They also helped
build up competitiveness by strengthening transport systems and put a
strong focus on achieving greater energy security and efficiency and
increasing the sustainability of energy production.
According to the third progress report on the JIAP
the region will continue to face significant challenges, including the
negative impact of tensions between Russia and Ukraine. The three IFIs
will maintain their support to the region beyond 2014, building on the
basis of the close and efficient cooperation that was established during
the period of the Action Plan.
Commitments and delivery under the JIAP for Growth
(in millions of euros)
* The World Bank Group comprises five institutions,
including the International Bank for Reconstruction and Development
(IBRD) and International Development Association (IDA), which together
make up the World Bank; International Finance Corporation (IFC); and the
Multilateral Investment Guarantee Agency (MIGA).
