Institution details
European Bank for Reconstruction and Development (EBRD) (EBRD)
Key facts
- Established in 1991
- Ownership: Public
- One Exchange Square
- None
- http://www.ebrd.com/home
Latest update: 03/12/2021
rating type | rating agency | type | rating |
---|---|---|---|
Institution rating | S&P | Foreign currency | AAA |
Products
- Loans
- Equity
- Trade Facilitation Program
Loans
- EBRD loans to private sector projects range from EUR 3 million to EUR 250 million; the average amount is EUR 25 million
- Basis for a loan is the expected cash flow of the project and the ability of the client to repay the loan over the agreed period
- Fixed or floating-rate: Fixed-rate basis linked to a floating rate such as LIBOR; floating-rate basis with a cap or a collar
- Senior, subordinated, mezzanine, or convertible debt
- Denominated in major foreign or local currencies
- Short- to long-term maturities up to 10 years
- Project-specific grace periods may be incorporated
- Fees:
- Front-end commission (paid upfront)
- Commitment fee (payable on the committed but undisbursed loan amount)
- Prepayment: Cancellation and late payment fees are also charged if necessary
Other lending terms:
- Recourse to a sponsor is not required, however, the EBRD may seek specific performance and completion guarantees plus other forms of support from sponsors typically found in limited-recourse financing
- EBRD requires project companies to obtain insurance against normally insurable risks, but does not require insurance against political risk or local currency inconvertibility
- Financed companies are usually required to secure the loan with project assets
- Typical project finance covenants are required as part of the loan package
- Loan repayments are normally in equal, semi-annual instalments, though longer maturities may be considered on an exceptional basis (e.g., up to 15 years for large infrastructure operations)
- EBRD can help manage financial risks associated with a project’s assets and liabilities, which covers foreign exchange risk, interest rate risk, and commodity price risk
Equity
- EBRD invests equity ranging from EUR 2 million to EUR 100 million in private sector projects; it expects a market rate return from its equity investments and only invests in minority equity positions
- Equity and quasi-equity investments include ordinary shares, preference shares, subordinated loans, redeemable preference shares, listed and unlisted, underwriting of share issues by public or privately-owned enterprises, and other forms can be discussed with EBRD banking staff
- EBRD also participates in private equity funds that focus on a specific region, country, or industry sector, have local presences, and are run by professional venture capitalists
Trade Facilitation Program
- Guarantees:
- Letters of credit and standby letters of credit from the issuing bank
- Deferred payment and “red-clause” letters of credit
- Advance payment guarantees and bonds, and other payment guarantees
- Bills of exchange and trade-related promissory notes
- Bid bonds, performance bonds, and other contract guarantees
- Longer tenors are approved (where appropriate) to cover finance of imported capital equipment and for other term guarantees
- Other types of trade finance instruments can also be considered - Revolving credit facility:
- EBRD can also extend short-term loans to selected banks and factoring companies
- Exclusively for the purpose of pre- and post-shipment finance and other financing of working capital necessary for the performance of foreign trade contracts and domestic and international factoring operations
- EBRD can provide financing for domestic factoring activities, in local currencies in a number of countries
Performance highlights
What's new?
- EBRD emphasized its plans to step up its cooperation with China and the EU in order to deliver increased levels of high-quality investment in Central Asia and beyond; this is in line with the Bank’s aims to further its integration along trade routes covered by China’s Belt and Road Initiative
- The Board of Directors approved a new energy sector strategy for the next five years, emphasizing the scaling-up of investment in renewables, supporting the integration of energy systems, promoting the switch to cleaner and more resilient energy sources, and facilitating electrification as a means to clean the economies where the EBRD invests