23 October 2007
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Czech Republic graduates from EBRD
Bank investment to halt from end-2007
By agreement between the Czech authorities and the EBRD, the EBRD will
no longer make new investments in the Czech Republic from the end of
2007. The EBRD will continue to work closely with Czech enterprises to
foster a growing volume of investment into countries further east,
where the EBRD is shifting its focus.
This decision to exit as a country for new EBRD investments reflects
the advanced state of transition that has been achieved by the Czech
people. It flows from the EBRD 5-year strategy adopted by shareholders
in 2006 which anticipates that all eight countries which joined the
European Union in 2004 will graduate by 2010.
The President of the EBRD, Jean Lemierre, saluted the "extraordinarily
successful journey that the Czech authorities and the Czech people
have taken to build a thriving market economy anchored by the
democratic institutions that bolster a sustainable, strong economy."
He looked forward to continuing to find opportunities for the EBRD to
support Czech investments in South eastern Europe, Ukraine and beyond,
where the Bank will increase its activity and where Czech firms are
finding new scope to expand.
The Czech Republic, which will be the first of the countries where the
EBRD will stop new investment, will continue to be a shareholder in
the EBRD and will remain a country of operations as the EBRD continues
to manage its portfolio of investments. The EBRD office in Prague will
close in November. Apart from specific exceptions, the EBRD will make
no new investments there beyond the graduation date of 31 December,
2007.
The only exceptions involve projects which are well advanced but will
not be ready for Board approval and signing until early 2008. The
Board of Directors has readily accepted these exceptions because the
projects concerned carry high transition impact and there was no wish
to compromise the usual high standards of due diligence and careful
preparation in order to meet the graduation date.
Since 1992, the EBRD has committed EUR1.1 billion to the country,
financing 103 projects with a total value of EUR4.7 billion.
The impact of the new EBRD strategy is already being reflected in the
breakdown of the Bank's expanding business volume. The share of
overall investments in central and eastern Europe fell to 14 from 16
percent in 2006, while 86 percent of new business was in south eastern
European and the former Soviet Union. Total business volume in 2006
rose to EUR4.9 billion from a previous 4.3 billion and is expected to
show another increase in 2007
Press contact:
Anthony Williams, Head of Media Relations - Tel: +44 20 7338 6997;
E-mail: williama@ebrd.com
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European Bank for Reconstruction and Development