Financing Environment in Eastern
Europe (non-EU) - Status and Prospects
5 March 2021
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Current economic environment
Source: National Statistical Offices and EBRD estimates
-7.5
-4.3
-0.9
-6.1
-7.0
-4.5 4.0
2.5
1.0
3.5 3.5
3.0
-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0
Armenia Azerbaijan Belarus Georgia Moldova Ukraine
GDP change in % y-o-y
2020 2021
Covid-19 crisis has caused a sharp economic downturn across EEC in 2020
Financial sector in EEC
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8
Georgia Armenia Moldova Ukraine Azerbaijan Belarus
Financial Development index, 2018
Depth Access Efficiency FI Index
18.7% 19.2%
24.5%
35.1%
62.2% 62.3%
0%
10%
20%
30%
40%
50%
60%
70%
Azerbaijan Moldova Ukraine Belarus Georgia Armenia
Credit to the economy/GDP, 2019
Overhaul of the financial sector in EEC is not over yet
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Points of Investment Attraction
• Good trade location: proximity to Europe and links to EAEU (Armenia and Belarus – members, Moldova – observer);
• Educated labour force;
• Good potential for technological and IT industries (Armenia, Belarus, Ukraine);
• Developed manufacturing sector (Belarus, Ukraine);
• Abundant sources of renewable energy: solar, hydro (Armenia, Azerbaijan, Georgia, Ukraine);
• Rich natural resource base and infrastructure connection to EU (Azerbaijan);
• Good potential in tourism sector (Georgia)
• Good potential in agriculture sector across the region.
EBRD in Eastern Europe and Caucasus
EBRD investments in the region: EUR 27.5 bl in >1,340 projects, including EUR 2.0 bln in 90 projects in 2020
0 20 40 60 80 100 120 140
0 500 1000 1500 2000 2500
2016 2017 2018 2019 2020
EBRD Annual Investments in the EaP Countries
Annual investments, € mln Operations, ##
Portfolio Composition by Sector
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Policy Dialogue and Support for Reforms
• The Bank's main policy activities focus on:
• laying the regulatory and legislative foundations for green energy transition; promoting energy sector reform;
• promoting municipal services sector reform and private sector involvement in infrastructure, including through PPPs;
• developing the financial sector and local capital markets;
• strengthening corporate governance including in SOE and SOBs;
• improving overall investment climate through support of the investors councils in Armenia, Georgia, Moldova, Ukraine and other institutions, e.g. Business
Ombudsman (Ukraine).
International Cooperation
The Bank closely cooperate with EU, international and bilateral donors, MDBs and international organisations to pursue its objectives by:
• promoting important economic reforms, enhancing investment climate;
• enhancing international connectivity and integration, including through development of infrastructure and trade facilitation;
• promoting green agenda, including renewable energy generation, and private sector involvement in infrastructure, including PPPs.
• promoting gender equality and economic inclusion;
• assisting our clients to build their capacity in project preparation and implementation, investment planning, financial management and to improve corporate governance;
• helping SMEs to grow and become more competitive through investment and business advice and enhancing their access to finance, including in local currency.
Contacts
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Evgeny Ofrikhter
Associate Director, Adviser to Managing Director
Eastern Europe and Caucasus email: OfrikhtE@ebrd.com Christian Hartung
Principal,
Business Development email: HartungC@ebrd.com
European Bank for Reconstruction and Development
One Exchange Square, London, EC2A 2JN, United Kingdom
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