(1)

Pursuant to Article 4(3) of the Agreement establishing the European Bank for Reconstruction and Development (2) (‘Agreement establishing the EBRD’), and in order to maintain enough capital to sustain, over the medium term, a reasonable level of activity in the EBRD countries of operation within statutory limits, the Board of Governors of the European Bank for Reconstruction and Development (EBRD) decided in its Resolution No 265 of 15 December 2023 (‘Resolution No 265’) to increase by EUR 4 000 000 000 the authorised capital stock of the EBRD.

(2)

Prior to that capital increase, the Union holds 90 044 shares, each share having a par value of EUR 10 000.

(3)

Pursuant to Resolution No 265, the authorised capital stock of the EBRD is increased by 400 000 paid-in shares, and EBRD members can subscribe, on or before 30 June 2025, or on or before such subsequent date not later than 31 December 2025 as the Board of Directors of the EBRD may determine on or before 30 June 2025, to a number of whole shares, pro rata to their existing shareholding. The capital increase is to be paid in five equal instalments, the first of which is to be paid by each member by the later of (i) 30 April 2025; or (ii) 60 days after its instrument of subscription has become effective. The remaining four instalments are to be paid by 30 April 2026, by 30 April 2027, by 30 April 2028 and by 30 April 2029, respectively. Accordingly, the Union will be allowed to subscribe to 12 102 new shares, each having a par value of EUR 10 000 for a total of EUR 121 020 000, thus increasing the number of paid-in shares of the Union to 102 146.

(4)

The capital increase is necessary to enable continued activities and investments by the EBRD in Ukraine during Russia’s war of aggression against Ukraine and in particular during a future post-war period to support Ukraine’s reconstruction. In supporting those activities and investments, the capital increase also ensures that such support does not restrict the capacity of the EBRD to meet needs in its other countries of operation. Furthermore, the capital increase is consistent with the requirement set out in Article 13, point (v), of the Agreement establishing the EBRD that the EBRD is to seek to maintain reasonable diversification in all its investments. As a consequence, a paid-in capital increase would sustain a financially strong EBRD which is able to pursue its mandate and to meet shareholders’ objectives in all of its countries of operation.

(5)

It is appropriate for the Union to subscribe to those additional shares in order to achieve the Union’s objectives in the field of economic external relations and to preserve its relative voting power within the EBRD.

(6)

In its Resolution No 259 of 18 May 2023 (‘Resolution No 259’), the Board of Governors of the EBRD voted in favour of amendments to the Agreement establishing the EBRD, which are necessary to enable the EBRD to expand in a limited and incremental way the geographic scope of its operations to sub-Saharan Africa and Iraq while maintaining its full commitments to Ukraine and to its existing countries of operation. That Resolution confirmed that the extension of the EBRD’s mandate should be achieved without requiring additional capital contributions from its shareholders.

(7)

The geographic scope of EBRD operations should be extended in a limited and incremental way to sub-Saharan Africa and Iraq, and should be fully compliant with the EBRD’s values of supporting those countries that are committed to and apply the principles of multiparty democracy, the rule of law, respect for human rights, pluralism, and market economics. The EBRD has developed a phased approach to starting its activities in the regions concerned, which will take into consideration the regional and national specificities. First investments in sub-Saharan Africa are envisaged to take place from 2025 onwards in Benin, Côte d’Ivoire, Ghana, Kenya, Nigeria and Senegal, subject to their application and approval as EBRD recipient countries. Taking into account the EBRD’s focus on private sector development and its transition mandate, the value that the EBRD can add in sub-Saharan Africa and Iraq is substantial and is of geostrategic importance for the Union.

(8)

The representatives of the Union in the governing bodies of the EBRD should encourage the EBRD to continue its close engagement with the Union and its collaboration with civil society, as well as to develop further its close cooperation with other European and international public financing institutions, in order to make full use of their comparative advantages, when extending its operations to sub-Saharan Africa and Iraq.

(9)

In line with the existing practice, before the EBRD approves a new country of operation, it should make a detailed technical assessment of the economic and political conditions in the country concerned, including: an assessment of that country’s commitment to the principles of multiparty democracy, pluralism and market economics, as enshrined in Article 1 of the Agreement establishing the EBRD, an assessment of transition gaps, and a review of the activities of other international financing institutions in that country, and of the priorities in relation to which the EBRD could best make use of its unique knowledge and skills. Such an assessment should be undertaken subject to any new country applying for membership of the EBRD and for country of operation status and subject to the subsequent approval thereof by the Board of Governors of the EBRD.

(10)

Currently, Article 12(1) of the Agreement establishing the EBRD limits the total amount of outstanding loans, equity investments and guarantees made by the EBRD in its ordinary operations to the total amount of its unimpaired subscribed capital, reserves and surpluses included in its ordinary capital resources. In its Resolution No 260 of 18 May 2023 (‘Resolution No 260’), the Board of Governors of the EBRD recognised the essential role of the EBRD in addressing pressing global challenges and the recommendations of the 2022 G20 Independent Review of Multilateral Development Banks’ Capital Adequacy Frameworks. The Board of Governors of the EBRD resolved that, in order to enable the optimal use of the EBRD’s capital capacity to achieve the maximum potential impact in its recipient countries, an amendment to Article 12(1) of the Agreement establishing the EBRD to remove the statutory capital limitation was necessary.

(11)

Pursuant to Article 56 of the Agreement establishing the EBRD, the Board of Governors of the EBRD has asked all members of the EBRD whether they accept the proposed amendments.

(12)

The capital increase and the amendments to the Agreement establishing the EBRD should therefore be approved on behalf of the Union,

(a)

30 April 2025; or

(b)

60 days after the instrument of subscription by the Union has become effective.