Changing People’s Lives

In 2013, bilateral donors and multilateral funds provided almost

€349

million in financing for technical cooperation, grant investments, risk-sharing facilities, performance fees and concessional financing.

Changing people’s lives

For over two decades the European Bank for Reconstruction and Development (EBRD) has been working with the international donor community to accelerate transition towards market-oriented economies and a set of values that we all share. Democratic foundations, private sector development, a competitive and transparent business environment and sustainable growth are just a few of the elements that underpin economic and social prosperity. Our donors have successfully supported this aim and that is why the Bank has ingrained the use of grants into its core business, ensuring efficiency and strategic resources for our operations.

The progress and results of our joint work, for which we express gratitude and pride, are detailed here in the online Donor Report, where they are echoed in videos by the voices of the very people whose lives have been improved through our actions.

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In 2013 donors provided significant grant funding totalling almost €349 million to complement and support investments where they are most needed in all sectors across our entire region, especially infrastructure, sustainable energy and small business. Efforts focused in particular on the early transition countries, the Western Balkans and the southern and eastern Mediterranean region.

This support funded over 600 technical cooperation assignments. In Georgia, the city of Rustavi now has a sanitary landfill serving about 120,000 citizens and the first recycling plant in the country; in FYR Macedonia and Kosovo, two private companies have invested in several small hydropower plants providing a source of renewable energy for remote areas; in Jordan, a family-run poultry agribusiness employing over 750 people has improved its operations and increased production. These are just a few examples of what we have achieved by working together.

The changes that, together with our donors, we have initiated from Casablanca to Vladivostok are proof of the success of our partnerships. Notably, in 2013 two countries of operations, Kazakhstan and Russia, established donor funds supporting EBRD projects in their respective countries. Also, Turkey co-financed a lending and advisory programme dedicated to Turkish businesswomen, together with the European Union (the Bank’s largest donor). These developments highlight enhanced involvement by some transition countries in the EBRD’s business model and suggest a path that others might take in the near future.

Donors also drive innovation while responding to developmental need: in financing instruments, for example by supporting risk-sharing products which foster climate change mitigation and adaptation measures or small business programmes; in policy dialogue activities, such as promoting local currency use to reduce exchange rate risk and involving the private sector in food security; and through continuous strategic guidance to improve the way donor funds are managed at the EBRD.

Backed by our donors, the Bank started to tackle important challenges: the Sustainable Resource Initiative, launched in 2013, will increase investments in the efficient use of energy, water and materials, and the Small Business Initiative is designed to streamline our approach to small enterprise finance and advisory support. These new programmes will need donor funding to address market imbalances, introduce new financial instruments and encourage institutional reforms.

With continued donor generosity in the face of shrinking public finances, which demonstrates our accountability as a trusted partner, the Bank is taking concrete steps to improve our governance, planning, communication and strategic approach to providing better value for public money.

Our promise of greater efficiency is reflected in our 2014 priorities. These include strengthening grant management, measuring the impact of advisory activities, and improving prioritisation in the use of resources from the EBRD Shareholder Special Fund, which complements donor funds and underpins the Bank’s priorities. In order to meet our development objectives in the coming years, we will require further coordination and a stable source of funding from our donor partners.

Motivated by our common achievements and invigorated by mutual support, we can confidently face the challenges ahead and bring sustainable change to transition economies.

Suma Chakrabarti
President, European Bank for Reconstruction and Development


New initiatives

The EBRD strives continuously to improve its activities in the countries where it works and its partnerships with the donor community. As a result, in 2013 donors and the Bank have strengthened their cooperation in a number of new strategic directions that will be developed further in 2014.

Sustainable Resource Initiative

The Sustainable Resource Initiative (SRI) aims to promote innovation and competitiveness in three vital areas of EBRD operations: energy, water and materials. It will provide technical cooperation (TC) and policy dialogue support to enhance efficiency, recycling and waste reduction. The Initiative is expected to deploy a range of new financing instruments to encourage private sector involvement and leverage significant amounts of additional finance. Donor support will be crucial to achieving the ambitious waste reduction goals of the SRI, which will build on the proven success of the Bank’s Sustainable Energy Initiative (SEI).

Small Business Initiative

The EBRD is strengthening its existing support for small and medium-sized enterprises (SMEs) through the Small Business Initiative (SBI), which was approved at the end of 2013. This aims to provide more efficient management processes, greater accountability within a results-based framework and closer client liaison to ensure maximum project impact. The SBI will bring a new integrated approach to donor funding, applying a wide range of financial instruments and TC support appropriate to each country in the EBRD region.

New donor partnerships

In 2013 the EBRD signed two TC fund agreements with Kazakhstan and Russia, setting up dedicated bilateral funds to back EBRD investments in the two countries. Furthermore, Turkey signed a co-financing agreement with the European Union for a lending and advisory programme dedicated to Turkish businesswomen. These developments are a testament to the progress of these countries in the transition process. They also mark the emergence of some countries in the EBRD region of operations as new donors, matching a trend observed globally among other developing economies.

2013: A year of partnership

  • January

    January

    Kazakhstan provides donor support through the Bank’s Small Business Support (SBS) programme. EBRD approves Grant Co-Financing Strategic Review.

  • February

    February

    MENA Transition Fund approves US$ 2.9 million for EBRD micro, small and medium-sized enterprise (MSME) programme in Egypt.

  • March

    March

    EBRD establishes role of Policy Vice President to lead coordination of strategies, policies and management of donor funds.

  • April

    April

    Sustainable Resource Initiative and Strategic Gender Initiative are approved by the Bank.

  • May

    May

    Annual donor meeting held in Istanbul. EBRD allocates €65 million to Shareholder Special Fund for 2014-15.

  • June

    June

    Russia and Kazakhstan back EBRD projects with donor funds. Donors to SEMED Multi-Donor Account and EBRD Water Fund meet in London.

  • July/August

    July/August

    Launch of Technical Cooperation (TC) Results Framework. Economic inclusion becomes part of EBRD transition assessment methodology.

  • September

    SEptember

    Bank and donors discuss TC Results Framework. Donor survey launched.

  • October

    october

    Jordan, Tunisia and Morocco become EBRD countries of operations. Eastern Europe Energy Efficiency and Environment Partnership (E5P) expanded to include Armenia, Georgia and Moldova.

  • November

    November

    Small Business Initiative presented to donors. EBRD donors gather in London for Grant Planning Meeting. Donors to Early Transition Countries Fund meet. The Bank’s proposal for a new funding architecture is considered by donors.

  • December

    december

    Western Balkans Investment Facility meeting.

    EU and Turkey co-finance EBRD Women in Business programme in Turkey.


Innovating partnerships

The EBRD constantly aims to enhance its partnerships with the donor community, whether in terms of our engagement, planning, resource management, accountability, information or publicity. We are working together with donors to achieve better results in all of these areas.

Renewing our working model

In 2012 the Bank conducted a comprehensive review of all aspects of donor partnerships. As a result of the Grant Co-Financing Strategic Review, some 30 recommendations were put forward to improve governance, planning and prioritisation, measurement and reporting of results and strategic approach. Good progress has been made in 2013 towards their implementation.

The Bank has created a new committee to oversee strategic work, while the purpose and structure of its Operations and Technical Cooperation (TC) committees have been revised to ensure even greater scrutiny of donor funding issues. Since July 2013, all donor-funded TC projects make reference to a new results framework aiming to ensure a systematic approach to project delivery of outputs and long-term outcomes. Better results measurement will, over time, lead to more informative reporting to donors. The first progress reports linked to the TC results framework are expected to be issued by the end of 2014.

In November 2013 donors were advised of the Bank’s proposed orientation towards a simplified EBRD funding architecture with the ability to deliver financial leverage, increase efficiency and flexibility, and provide the highest possible impact for donors. The Bank will continue to engage with donors on this important issue.

Responding to donor feedback

The EBRD sought survey responses from its donors in 2013 about their funding priorities, as well as their views on the funding architecture, donor visibility and reporting. The results were encouraging and provided crucial feedback. Overall, 80 per cent of respondents expressed satisfaction with Bank-donor engagement, while donor attitudes to sector and regional priorities (including energy efficiency and climate change, small business support, the ETCs and Western Balkans) were similar to those recorded in 2012.

The difficult budgetary outlook has continued to impact on donor partnerships, with almost 80 per cent of respondents saying that fiscal conditions were the single most important factor determining their contributions. Just over 50 per cent cited the quality of the Bank’s reporting, donor visibility and the ability to deliver value for money, while 66 per cent highlighted the importance of multi-donor funds in terms of their financial leverage and capacity for greater impact. Some respondents also appreciated the consensual decision-making process.

More than 50 per cent continued to express satisfaction with reporting channels, while dissatisfied respondents fell to 10 per cent from 21 per cent in 2012 – a noteworthy change in light of the ongoing enhancement of the TC results framework and reporting system. Donors also expressed a high degree of satisfaction with most of the Bank’s visibility products – upwards of 75 per cent.

Factors that drive contribution amounts (2013)


Giving donor’s work visibility

Donor visibility is an important part of the EBRD’s strategic approach to communication. As well as highlighting the beneficial impact that donor funding has on people’s lives, it gains recognition for donors and the Bank in countries where the EBRD works, and helps raise their profile at the international level. Crucially, this visibility also helps donors inform taxpayers of the real difference that their money is making to those entrepreneurs, institutions and citizens aspiring to a better future.

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In 2013, responding to donors’ requests, the EBRD improved visibility planning for multi-donor funds, such as the ETC Fund and SEMED MDA, and engaged with individual donors to develop bespoke visibility strategies, including strengthening cooperation with the European Union. It has also maintained the wider Bank-donor profile through the traditional media, alongside increasing use of social media platforms such as Twitter, LinkedIn and Facebook.

Donor visibility channels

Videos: posted on the EBRDTV You Tube channel and describing donor-funded projects from the perspective of beneficiaries. In 2013 these were filmed in FYR Macedonia, Georgia, Jordan, Kosovo, Kyrgyz Republic, Serbia and Turkey.

Press releases: distributing donor stories to the general media.

Publications: including the online flagship Donor Report, the Donor Update, the email-based monthly newsletter on news and projects relevant to donors, and factsheets and brochures.

Photography: snapshots showing the impact of donor funding.

Donor web pages: a dedicated web space for each donor on the Bank’s public site.

Case studies: showcasing the achievements of donor funding.


Looking ahead

Donor partnerships are a crucial component of the EBRD’s business model. In providing resources for technical cooperation and other grant or concessional instruments, they help the Bank execute its transition mandate, encourage innovation and set a model for sustainable growth.

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In 2014, with donor support, the Bank will continue to focus on those sectors and regions where action is most needed. Investments in sustainable energy, infrastructure and small business will remain at the core of the Bank’s donor activities. Regionally, the strong emphasis on the early transition countries, the Western Balkans and the SEMED region will continue. The Bank’s projects will be further supported by new strategic programmes such as the Small Business Initiative and the Sustainable Resource Initiatives, which will promote even greater coordination with our partners and will maximise our development impact.

The Bank will also continue to work on ways to improve efficiency in grant management and prioritisation, in measuring performance and results and in ensuring proper visibility for the contributions that donors have made.

 

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