Annual Report 2000 [EBRD

Annual report 2000 Countries of operations as of 31 January 2001 Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Federal Republic of Yugoslavia, Former Yugoslav Republic of Macedonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Romania, Russian Federation, Slovak Republic, Slovenia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan. The European Bank for Reconstruction and Development (EBRD) began operations in 1991. The Bank’s mandate is to foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative in the countries of central and eastern Europe and the Commonwealth of Independent States (CIS) committed to and applying the principles of multiparty democracy, pluralism and market economics. The EBRD helps its 27 countries of operations to implement structural and sectoral economic reforms, promoting competition, privatisation and entrepreneurship, taking into account the particular needs of countries at different stages of transition. Through its investments it promotes private sector activity, the strengthening of financial institutions and legal systems, and the development of the infrastructure needed to support the private sector. The Bank applies sound banking and investment principles in all of its operations. In fulfilling its role as a catalyst of change, the Bank encourages co- financing and foreign direct investment from the private and public sectors, helps to mobilise domestic capital, and provides technical cooperation in relevant areas. It works in close cooperation with other international financial institutions, and with international and national organisations. In all of its activities, the Bank promotes environmentally sound and sustainable development. 2000 highlights For the EBRD’s countries of operations, 2000 brought a recovery of investment and a consolidation of output, with the region experiencing positive economic growth. In helping the countries to achieve these successes, the Bank significantly increased its commitments in the region and consolidated its return to profitability. The EBRD continued to invest in projects that advance the transition to market economies and mobilised considerable domestic and foreign investment in support of these activities. In the autumn the EBRD launched a Capital Resources Review and undertook a review of its impact on the transition process, which confirmed that the Bank is well placed to build on its successful experiences in the region. Operational targets for the year were generally exceeded, as the Bank continued to implement its revised medium-term operational priorities, Moving Transition Forward. The EBRD signed 95 projects totalling €2.7 billion, the highest annual commitment level to date. The EBRD consolidated its return to profitability, recording a net profit of €153 million. This was principally due to equity disposals, Treasury operations and continued budgetary discipline. The Bank achieved positive reserves in 2000, reversing the earlier financial setback. Banking operations showed a profit for the first time, making a substantial contribution to the EBRD’s positive overall results. During the course of the year the EBRD played an active role in the implementation of the Stability Pact for South-Eastern Europe, becoming the single largest institutional investor in the region. In December the EBRD accepted the Federal Republic of Yugoslavia as its 27th country of operations and the Bank began to assess its role in reconstructing the country’s economy. In May the EBRD’s Board of Governors unanimously elected Jean Lemierre as the Bank’s fourth President following the departure of Horst Köhler, who was appointed Managing Director of the International Monetary Fund. The portfolio of the Bank’s net outstanding commitments The Bank’s pipeline of projects under consideration grew by 13 per cent to €12.2 billion by the end of 2000. increased significantly. Projects passing final review The private sector share of the portfolio was 68 per cent. stage in 2000, before Board approval, reached € Annual business volume in the advanced countries 3.8 billion, an increase of 27 per cent over 1999. of central and eastern Europe increased by 14 per cent Projects at the earlier stages of the project cycle in 2000, representing 39 per cent of the EBRD’s annual also increased by more than 15 per cent. commitments. Activity in Russia more than doubled, The EBRD continued its long record of zero-growth with its overall share rising to 22 per cent. The early budget, achieving greater productivity with a negligible and intermediate countries recorded a 2 per cent increase in staff. increase, reaching a share of 39 per cent of annual The Bank approved a new Public Information Policy 1 business volume. and revised its Provisioning Policy. Gross disbursements grew slightly to €1.5 billion in 2000 in line with the Bank’s target range for the year. The Bank’s operating assets reached €7.6 billion. 1 See page 108 for a definition of these country groupings. Banking portfolio Operating assets Cumulative funds mobilised at 31 December 2000 (€ billion) at 31 December 2000 (€ billion) at 31 December 2000 (€ billion) 14 8 70 12 7 60 6 10 50 5 8 40 4 6 30 3 4 20 2 2 1 10 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Cumulative funds mobilised EBRD financing committed Financial results (€ million) 2000 1999 1998 1997 1996 Operating income 519.2 376.4 450.5 346.0 243.7 Expenses and depreciation (192.1) (172.8) (158.7) (152.1) (146.4) Operating profit before provisions 327.1 203.6 291.8 193.8 97.3 Provisions for losses (174.3) (160.9) (553.1) (177.7) (92.4) Profit/(loss) for the period 152.8 42.7 (261.2) 16.1 4.9 Authorised capital 20,000 20,000 20,000 20,000 10,000 Paid-in capital 5,186 5,163 5,084 4,877 2,965 Capital instalments received (cumulative) 3,769 3,480 3,217 2,949 2,916 Total provisions and reserves 1,278 1,040 762 508 263 Total assets 21,290 19,595 16,047 13,495 10,964 Operational results Annual commitments 2000 1999 1998 1997 1996 Number of projects 95 88 96 108 95 EBRD financing (€ million) 2,673 2,162 2,373 2,315 2,188 Resource mobilisation (€ million) 5,188 4,862 7,541 4,210 3,819 Portfolio (€ million) 1 Banking portfolio 12,218 10,835 10,182 8,932 7,263 Operating assets 7,563 6,955 5,761 4,580 3,202 Performing assets 6,805 6,160 5,247 4,393 3,168 Additional funds mobilised 41,949 33,964 29,102 22,335 18,926 1 Figures for 1996-99 are as reported for those years. They do not reflect subsequent changes due, for example, to exchange rates, cancellations, syndications or restructuring. Terms are defined on page 108. The charts above reflect recalculated figures. Contents 2000 highlights Inside front cover 2 President’s foreword 3 Letter of transmittal 4 Overview Operational results Financial results Implementing the EBRD’s operational priorities Responding to regional needs Fostering partnerships in transition Institutional developments Challenges for the future 13 Recent developments in the transition process Progress in transition Recent economic developments Capital flows Legal environment 21 Review of banking operations Overview Activities by stages of transition Activities by sector 1 Environment 48 Evaluation of EBRD operations Evaluating projects Cooperation with other MDBs and donor institutions Evaluating technical cooperation operations 53 Other operational activities Co-financing Procurement and contracting Technical cooperation funds Turnaround management Nuclear safety 67 Financial results and financial statements 96 Projects approved in 2000 103 Governance Governors Directors Contacting the EBRD Local offices 108 Guide for readers European Bank for Reconstruction and Development President’s foreword For the EBRD, 2000 was a rewarding year. In an improved economic climate we signed our highest level of new business. We restored the Bank’s financial health after the crisis of 1998, putting the Bank in an even stronger position to foster transition to market economies in central and eastern Europe and the Commonwealth of Independent States. As the EBRD celebrates its tenth anniversary, its role is as relevant as ever and the challenges are great. In the more advanced countries of central and eastern Europe, contribute to growth, and about the crucial need for democratic we foresee a high level of new business to accompany the process accountability of governments. Our future will be built on our of EU accession, itself a target complementary to the transition successes and on the lessons learned from our experience. challenges of the Bank. Our work will increasingly focus on more complex transactions, especially industrial restructurings and the As we launch a new decade, we resolve to enhance our role as a more difficult sectors such as municipal infrastructure, agribusiness public sector bank that moves markets forward by taking risks that and the new economy. will encourage other investors to follow. We will constantly innovate to adapt to evolving local needs. And we will stay attuned to the We will expand our activities in Russia and Ukraine, where there is client. With a clear focus and an expert and dedicated staff, we feel 2 a huge appetite for investment and a need for our contribution to ready to take on the very considerable challenges that lie ahead in developing a corporate culture of good governance. our goal of making markets work. During 2000 the EBRD played a key role in the Stability Pact for But no market is functional unless it ultimately alleviates poverty, South-Eastern Europe. At the end of the year we welcomed the improves health care and promotes education. Although these Federal Republic of Yugoslavia as the Bank’s 27th country of concerns are not part of the Bank’s direct responsibilities, we will operations, which redefined the considerable potential for EBRD work with other international institutions and countries to ensure initiatives in the Balkan region.

Load more