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U.S. Department of State
European Bank for Reconstruction & Development
Commercial Guide
Office of the Coordinator for Business Affairs

Commercial Guide
for the
European Bank for Reconstruction & Development

CHAPTER I: EXECUTIVE SUMMARY
The EBRD, the newest of the Multilateral Development Banks (MDBs), began 
operation in April of 1991.  It was created to help build market 
economies in eastern/central Europe and the former Soviet Union.  The 
Bank is unique among Multilateral development banks in its focus on the 
private sector and its policy of investing only on commercial terms.

Private Sector Focus:  The EBRD allocates a majority of its resources to 
investment in and strengthening of the private sector in its countries 
of operation.  Although the Bank's charter only requires a 60/40 split 
between the private and public sectors, 73% of EBRD board approved 
projects were made in the private sector in 1994.  Private sector 
projects include investments in new private sector enterprises, joint-
ventures with western partners and privatization of former state-owned 
enterprises. As of May 31, 1995, the Bank had committed to finance 211 
private sector projects valued at $5 billion.
The remaining EBRD investments are made in infrastructure projects 
necessary for a successful private sector.  Examples include, 
construction of a wholesale produce market for private farmers in 
Hungary and improvement of international telecommunications links in the 
Ukraine.  As of May 31, 1995, the bank had committed to finance 65 
public sector projects valued at $2.6 billion.
The EBRD only makes investments it believes to be commercially viable 
and provides financing (debt and/or equity) only on commercial terms.  
The Bank does not give grants or make "soft" loans.  The EBRD does not 
compete with private financial institutions.  However, in many cases 
private capital sources are unwilling to assume the risks associated 
with projects in the region and will only invest with EBRD 
participation.  In this manner, the EBRD helps attract private capital 
to the region.
The Bank, which will commit up to 35% of the financing for private 
sector projects, rarely finances projects valued under $21 million.  
However, the Bank recognizes the need to fund smaller projects and, as 
of May 1995, has invested $1.79 billion (31%) of total Bank investments 
in financial intermediaries -- for example, equity funds and local banks 
-- established to fund small and medium-sized businesses.  By funding 
local banks the EBRD plays an important role in developing and 
strengthening the region's financial institutions and in getting small 
and medium sized projects off the ground.  
In a new initiative for 1995, the EBRD has started to provide local 
banks with funds and payment guarantees to enable them to develop trade-
related services for import/export transactions.  These projects 
stimulate foreign and intraregional trade by lowering the transaction 
costs of trade.  As of May 1995, the EBRD had approved 5 trade 
facilitation projects totaling $200 million in Macedonia, Russia, 
Estonia, the Czech Republic and Belarus.

US Commercial Opportunities:  US companies generally work with the EBRD 
as investors on private sector projects, as suppliers of goods and 
services for public sector projects, or as consultants on private and 
public sector projects.  US firms have done well accessing and utilizing 
EBRD resources.  At the end of 1994, US companies had benefited from 
over $890 million in EBRD loans, investments and contracts (not 
including projects made possible through local financial 
intermediaries).  Many of these projects involve significant US exports.
US companies are the largest recipient of EBRD funds for private sector 
projects, aiding expansion into the rapidly growing markets of the 
former Soviet Union and eastern Europe.  Of the 191 private sector 
projects financed by the EBRD through 1994, US companies participated in 
44 or 23% of the total number.  These projects received Bank financing 
of almost $820 million, with total project costs exceeding $3.3 billion.
During the same period, US firms won numerous procurement contract 
awards from Bank-financed projects.  These included 10% (by number) of 
the public sector procurement contracts with an aggregate value near $35 
million, 10% (by number) of the technical cooperation contracts valued 
at over $14 million, and more than 25% (by value) of all legal services 
contacts.

CHAPTER II: AN INTRODUCTION TO THE EBRD
Purpose and Role: The EBRD is the first international financial 
institution of the post Cold War period.  It was established to foster 
the transition towards open market-oriented economies and to promote 
private and entrepreneurial initiative in those central and eastern 
European countries committed to and applying the principles of 
multiparty democracy, pluralism and market economics.  
The Bank seeks to help its countries of operation to implement 
structural and sectoral economic reforms, including demonopolization, 
decentralization and privatization, taking into account the particular 
needs of countries at different stages of transition.  Its activities 
include the promotion of private sector activity, the strengthening of 
financial institutions and legal systems, and the development of the 
infrastructure needed to support the private sector.
Like the other MDBs, the EBRD finances public sector projects directed 
towards physical and financial infrastructure.  However,  60 per cent of 
its funding is focused on the private sector to support private sector 
enterprises or state-owned enterprises in the process of implementing a 
program to achieve private ownership and control.
In fulfilling its role as a catalyst of change, the EBRD encourages co-
financing and foreign direct investment from the private and public 
sectors, helps to mobilize domestic capital, and provides technical 
cooperation in relevant areas.  It works in close cooperation with 
international financial institutions and other international 
organizations.  The Bank promotes environmentally sound and sustainable 
development in all of its activities.

Organization: The EBRD has 59 members comprising 57 countries and two 
international organizations, the European Investment Bank, and the 
European Community.  (See listing at the end of this section)  The Bank 
is capitalized at ECU 10 billion (approximately $13 billion).  The 
United States is one of the largest shareholders, holding roughly ten 
per cent of the share capital.
The powers of the European Bank are vested in a Board of Governors.  
Each member country appoints a Governor and an Alternate.  The Board of 
Governors has delegated power to the Board of Directors, who are 
responsible for the general direction of the Bank.  Twenty-three 
Directors and their Alternates represent all the member countries and 
organizations during their three year term.  The United States holds a 
permanent position on the Board of Directors; Lee Jackson is currently 
the Acting Executive Director for the US.  The President of the EBRD is 
elected by the Board of Directors for a term of four years.  Vice 
Presidents are appointed by the Board of Directors on the recommendation 
of the President.
The Bank is organized into the following departments, each headed by a 
vice president:  the Banking Department, Finance, Personnel and 
Administration, and Project Evaluation.  The Office of the Secretary 
General, General Counsel, and Chief Economist complete the listing, 
along with Internal Audit and Communications.
   
The EBRD's operations are carried out through the Banking Department, 
which is divided into 10 country teams and 11 sector teams.  The country 
and sector specialists work together to ensure that operations in each 
country are well coordinated.  Sector teams include agribusiness, 
education and training, energy efficiency, financial institutions, 
natural resources, nuclear safety, power and energy utilities, 
privatization and restructuring, property and tourism, 
telecommunications, transport and environmental infrastructure.


EBRD MEMBERSHIP BY COUNTRY (as of December 31, 1994)
Country         Shares      Country         Shares
Albania          10.00      Kyrgyzstan       10.00
Armenia           5.00      Latvia           10.00
Australia       100.00      Liechtenstein     2.00
Austria         228.00      Lithuania        10.00
Azerbaijan       10.00      Luxembourg       20.00
Belarus          20.00      Malta             1.00
Belgium         228.00      Mexico           30.00
Bulgaria         79.00      Moldova          10.00
Canada          340.00      Morocco          10.00
Croatia           1.00      Netherlands     248.00
Cyprus           10.00      New Zealand      10.00
Czech Republic   85.33      Norway          125.00
Denmark         120.00      Poland          128.00
Egypt            10.00      Portugal         42.00
Estonia          10.00      Romania          48.00
Finland         125.00      Russian Federation   400.00
Former Yugoslav             Slovak Republic  42.67
   Macedonia      1.00      Slovenia          1.00
France          851.75      Spain           340.00
Georgia          10.00      Sweden          228.00
Germany         851.75      Switzerland     228.00
Greece           65.00      Tajikistan       10.00
Hungary          79.00      Turkey          115.00
Iceland          10.00      Turkmenistan      1.00
Ireland          30.00      Ukraine          80.00
Israel           65.00      United Kingdom   851.75
Italy           851.75      USA            1,000.00
Japan           851.75      Uzbekistan        21.00
Kazakstan        23.00      European Community   300.00
Republic of Korea 65.00     European  
                            Investment Bank   300.00

Function:  The Bank performs a wide range of functions in fulfilling its 
mandate to assist its countries of operation in moving towards market 
economies.  The European Bank seeks to fund private and public sector 
projects that will help to:
- create a competitive private sector
- foster entrepreneurial activity and small and medium-sized enterprises
- privatize state-owned enterprises
- encourage direct foreign investment
- create and strengthen financial institutions
- restructure the industrial sector
- create a modern infrastructure for private sector development and 
transition to a market economy
- improve the environment
Project-related technical cooperation is a major feature of the EBRD's 
activities.  The Bank uses technical cooperation funds to finance 
studies and training in a number of areas including privatization, 
restructuring, and business and financial sector training.
The EBRD also administers the Nuclear Safety Account.  The NSA was 
established by the G-7 in 1992 to finance (through grants) safety 
upgrades for aging nuclear reactors in the Bank's countries of 
operation.  The U.S. is one of 14 contributors to the NSA who have 
pledged a total of over $188 million (as of December 31, 1994).

Key Sectors:  The EBRD has approved 276 projects with financing valued 
at some $7.7 billion. Projects have been approved in 24 of the 25 
countries of operation. The financial institutions and 
telecommunications sectors are the largest portfolio elements in dollar 
terms, followed by transport services and oil & gas production.  See the 
following tables for details:
EBRD PROJECT FINANCING APPROVED BY SECTOR (as of May 31, 1995)
Sector                   Number         ECU Million
Aerospace/Airports          7.0             75.6
Chemicals                   6.0             85.7
Computer and Electronics    2.0             12.8
Construction                1.0             11.3
Education                   1.0              8.7
Energy                     15.0            506.8
Finance - Insurance        92.9           1720.2
Food and Tobacco           19.0            196.5      
Forest and Paper           13.5            112.8      
Gas and Sanitary Services   4.0             69.6   
Manufacturing              19.0            309.1   
Housing                     5.0             74.5
Media                       1.0              8.6
Mining and Minerals         3.0            127.9      
Non-classifiable            7.0            155.4      
Oil and Gas Production     10.0            402.3
Pharmaceutical and Medical  1.0             37.8   
Pipelines                   1.0             18.8
Rail Track and Structures   3.0            126.3   
Roads and Bridges          11.0            405.7      
Service Industry            2.0             24.9      
Telecommunications         25.5            720.6      
Tourism and Leisure         7.5             51.9      
Transport Services         14.0            434.8      
Wholesale and Retail Trade  5.0             62.9      
Total                     276.4          5,761.4


EBRD PROJECT FINANCING APPROVED BY COUNTRY (as of May 31, 1995)
Country               Number         ECU Million
Regional               12.0            210.0   
Albania                 6.1             47.4
Armenia                 2.0             60.3
Azerbaijan              1.0             40.0
Belarus                 5.1            137.5
Bulgaria               13.2            158.3
Croatia                 5.0            135.7
Czech Republic         20.0            477.0
Estonia                 8.1            109.1
FYR Macedonia           5.0             76.0
Georgia                 1.0             13.6
Hungary                32.5            687.3
Kazakstan               2.0            103.3
Kyrgyzstan              4.0             73.6
Latvia                  6.1             60.9
Lithuania               5.0             83.7
Moldova                 4.2             51.3
Poland                 43.5            816.9
Romania                18.2            453.7
Russian Federation     42.9           1,050.0
Slovak Republic        12.0            282.1
Slovenia               14.2            317.9
Turkmenistan            2.0             33.8
Ukraine                 8.2            162.7
Uzbekistan              3.0            119.2         
Total                 276.4          5,761.4

CHAPTER III: WORKING WITH THE EBRD
There are three ways in which U.S. companies can work with the EBRD: 1) 
as borrowers/investors in private sector projects that require 
financing; 2) as suppliers/exporters of equipment, works and services on 
Bank-financed projects; 3) as consultants, under the Bank's technical 
cooperation program and Bank-financed projects.

A. US INVESTORS: PRIVATE SECTOR PROJECTS
The primary targets of the EBRD's financing are private companies or 
state-owned enterprises undergoing privatization and the creation of new 
companies, including joint ventures with international strategic 
investors.  A key aim is to encourage investment in  the region, and the 
Bank works in partnership with other investors and lenders to provide a 
range of financing instruments including loans, equity and guarantees.  
This activity is complemented by finance for infrastructure projects in 
the public sector that support initiatives in the private sector.  The 
Bank encourages regional cooperation, and the projects it supports may 
involve more than one country.
The Bank lends for specific projects and investment programs and  co-
finances with multilateral institutions, commercial banks and other 
lenders.  The terms of the EBRD's funding are designed to enable it to 
cooperate both with other international financial institutions and with 
public and private financial institutions through co-financing 
arrangements.  From the U.S., the EBRD works with the Overseas  Private 
Investment Corporation (OPIC), the Export Import Bank (EXIM), and 
several commercial banks.
The Bank also invests in the equity capital of private and state-owned 
enterprises, and may facilitate access to international capital by 
underwriting debt or equity securities offerings and providing 
guarantees, financial advice and various other forms of technical 
cooperation.

Lending Requirements: The Bank is normally prepared to provide, in the 
form of debt or equity, up to 35 per cent of the capital for a single 
project.  The sponsor, in turn, is expected to provide an additional 
third of the project cost in the form of equity, with the remaining 
financing provided from an outside lender.  The terms will primarily 
reflect the commercial and country risks, although the latter is 
mitigated by the EBRD's status as a preferred creditor.  The Bank's 
financing may take the form of limited recourse (to the sponsors), 
senior or subordinated debt, equity or guarantees.  All projects 
financed by the Bank must be commercially viable and must be able to 
generate cash flow sufficient to service the debt.
Loans are available in local or hard currency.  If hard currency funding 
is provided, the project must demonstrate the ability to generate hard 
currency or the ability to absorb increases in local currency financing 
costs should there be any devaluation during the loan period.

Mobilizing Co-financing: At present, the principal form of mobilizing 
external financing for private sector projects is the participation by 
banks in EBRD loans.  Through this technique, the commercial banks can 
share with the EBRD the benefit of its status as an international 
institution.  The EBRD, as lender of record, extends a loan to a 
borrower on terms pre-arranged with, and funded by, bank lenders and the 
EBRD.  Structurally, the EBRD sells participation, without recourse to 
itself, in such loans to the banks.  Through the participation 
mechanism, each bank lender may benefit from the EBRD's preferred 
creditor status.
The EBRD works with commercial, investment and merchant banks acting as 
advisors to investors in its countries of operations.  The Bank also co-
operates with other lenders and risk-takers such as export credit 
agencies (EXIM) and investment insurers (OPIC), and international 
institutions such as development banks and bilateral donors.  The Bank's 
objective is to provide and develop capital sources for investments.  It 
is pleased to work with a financial advisor to develop appropriate 
capital structures that the EBRD and the international capital markets 
can support. 

The Multi-Project Facility Program (MPFP):  The MPFP is a wholesale 
approach to lending that was introduced to more efficiently distribute 
the Bank's resources by combining several investment projects under a 
single umbrella commitment.  The facility is aimed at relatively large 
western companies with strong balance sheets who wish to undertake a 
series of projects ranging in individual size from $3 to $30 million, 
with total financing needs of at least $60 million.  In total, the EBRD 
would commit debt or equity of at least $20 million.
The MPFP includes a framework agreement between the EBRD and the project 
sponsor, allowing the sponsor to develop projects on a more independent 
basis.  A great deal of responsibility and risk is transferred to the 
project sponsor.  However, the MPFP gives the sponsor access to a source 
of co-financing early in the project development process and reduces the 
amount of paperwork per project.

Financing small and medium-sized projects:  In general, the Bank seeks 
to directly fund projects where its minimum participation is around $7 
million.  Due to cost constraints, the Bank is not generally able to 
directly finance smaller projects.  As part of its mandate to provide 
financing in support of private sector initiatives, and especially to 
assist small and medium-sized enterprises, the Bank has established 
financial intermediaries such as equity funds, credit lines to local 
banks, venture capital funds, who are in a better position to consider 
such projects.   (See the EBRD publication Alternative Sources of 
Financing, listed in Chapter 4.) 

Proposing a Private Sector Project:  Private sector projects are 
generally brought to the Bank by the borrower (either a local or a 
foreign firm) or the joint venture.  A company with a project in mind is 
advised to write a thorough and complete Business Plan, which should be 
submitted to the Bank as a first step in applying for Bank funds. The 
proposal should include a description of the project, a description of 
the main parties to the transaction, a financing plan and a financial 
overview (Financing With the EBRD contains a complete outline for a 
business plan - see Bank publications listing in Chapter 4.)  It is 
important to note that responsibility for project preparation rests with 
the borrower, and not the Bank, although the Bank works closely with the 
borrower to ensure that the proposal meets Bank standards.
If, after reviewing the Business Plan, the Bank is interested in the 
project, the following process occurs:
Stage One: Concept Clearance.  This first step ensures that an operation 
fits within the policies of the Bank and is consistent with prevailing 
country priorities and sector operations policies.  After a project 
officer has developed a broad outline of a proposed project, he or she 
submits a memorandum via the relevant team leader to the Deputy Vice 
President and Vice President.  Once approval is granted, a mandate 
letter is prepared and sent to the project sponsor spelling out 
necessary costs and undertakings as a project is prepared.
Stage Two: Initial Review.  An Operations Committee (OpsComm), comprised 
of senior Bank management, discusses the project at an early stage to 
identify strategic and operation issues that may require special 
attention or assistance.  These key issues must be resolved prior to the 
project returning for final review.
Stage Three: Final Review.  The project, now in the form of a draft 
final review package, returns to the OpsComm, having received sign-offs 
from relevant departments such as procurement, environment, credit, co-
financing, loan syndication, etc.  At this stage the focus is on the 
successful resolution of any outstanding business and credit issues, on 
readiness for implementation of the project, and on project consistency 
with the policy and portfolio goals of the Bank. 
Stage Four: Executive Committee Review.  Prior to being presented to the 
Board, the project is seen by the President and the vice-presidents, and 
then presented to the Board by the President.
Stage Five: Board Approval.  The final responsibility for approving a 
project rests with the Board.  The Board meets twice a month, and 
requires at least three weeks to review a project prior to the date 
scheduled for consideration.

Time Frame:  Although timing varies for each individual project, 
approval for projects has been completed in as little as four and a half 
months (rare) but in some cases has taken over a year.  Please note, 
however, that the Bank will not commit itself to any time frame for 
completion of the process and that these are only estimates.  The Bank 
is seldom the reason for a delay; it can not proceed with funding until 
it is completely satisfied with the information and documentation 
provided by the sponsor.

Private Sector Procurement:  Procurement in private sector operations 
should follow established good commercial practice and be in the best 
financial interest of the client company.  Although not obliged to use 
international tenders, private sector clients must use appropriate 
procurement methods to ensure value for money.  
Interested U.S. suppliers may contact recipients of EBRD-financed 
projects to ascertain possible buyer interest, but such opportunities 
are not formally published.

Key Sectors:  As of May 1995, the EBRD had approved 211 private sector 
projects (EBRD financing valued at $5 billion) in a range of sectors.  
Key sectors of private sector activity include: financial institutions, 
oil/gas, mining, transport, property, agribusiness, telecommunications.  
However, projects are not limited to these sectors.

B. US SUPPLIERS: PUBLIC SECTOR PROCUREMENT
EBRD-financed projects in the public sector are a substantial source of 
procurement contracts for US suppliers.  US firms have received over $35 
million in public sector procurement awards, representing 10% of the 
total number of contracts awarded by the Bank since 1991.  
Public sector projects reach the European Bank in a number of different 
ways.  Many times, projects are proposed by the government of a member 
country - an agency, ministry or other organization.  Sometimes the Bank 
will propose a project based on its own analysis (see country 
strategies).  In cases where the Bank is being asked to co-finance a 
project, an international organization or financial institution will 
often approach the Bank.
Once a public sector project is identified and has passed initial 
review, it is placed in the project pipeline, and a description is 
published monthly in Procurement Opportunities, the Bank's monthly 
publication listing all public sector projects.  This periodical is the 
earliest formal notification that a project is being prepared and the 
announcement contains basic information on the project, including the 
borrower, the size of the project, and a brief description and status 
report.  Exporters serious about Bank funded procurement are strongly 
advised to read this publication.
The actual implementation of the project is the responsibility of the 
borrower, as is procurement of goods, works and services.  For all 
projects that the Bank finances, the borrower, not the Bank, is 
responsible for the procurement.  The Bank requires that procurement 
activities follow procedures, policies and rules as specified in the 
loan agreement, and assists the borrower in this regard.  The Bank 
carefully monitors the procurement process to ensure that these 
procedures are followed and that the process is fair and transparent.

The Procurement Process:  At the risk of repetition, the European Bank 
does not purchase goods and services directly from suppliers for 
projects that it finances.  The borrower, not the Bank, is responsible 
for procurement.  The borrower (i.e. the executing agency) determines 
what goods, works, and services are required to carry out the project, 
when they are needed, and what procurement procedure is most suitable 
for each contract.  The borrower, often with the help of consultants, 
prepares the specifications and tender documents, determines the 
procurement schedule, publishes the notices, evaluates the tenders, and 
awards and administers the contract.
The Bank's role is to make sure that the borrower's work is done 
properly, that the agreed procurement procedures are observed, and that 
the entire process is conducted openly and fairly.  The Bank does not 
get involved in the procurement process until the borrower recommends a 
contract award winner.  Upon receiving an evaluation report from the 
borrower detailing the selection process and the award candidate, the 
EBRD either approves or rejects the recommendation depending on whether 
procurement rules have been followed correctly.
With the exception of consulting contracts, all public sector borrowers 
must follow open tendering procedures for contracts of goods and 
services equal to or greater than ECU 200,000 for services and ECU 5 
million for works.
The normal process for public sector procurement involves the following 
steps:
   1) Notification
   2) Pre-qualification 
   3) Invitation to Tender
   4) Receive and Evaluate Tenders
   5) Award of Contract
   6) Administer Contract
Once the bank has approved the procurement plan, and as early in the 
project cycle as possible, the borrower must issue a General Procurement 
Notice that has to be internationally advertised.  This notice must be 
published in a newspaper with wide circulation in the borrower's country 
and in official gazettes and international trade publications.  The Bank 
publishes the notice in its Procurement Opportunities newsletter and 
arranges for its publication in the United Nations' Development 
Business.  
Additionally, notices (procurement notices, invitations to tender, 
invitations for expressions of interest) are normally transmitted as 
Foreign Government Tender telegrams to the U.S. Department of Commerce, 
Washington, D.C., where they are captured electronically and 
disseminated via several multiplier channels to the U.S. business 
community.  U.S. firms may check Commerce Business Daily, the Journal of 
Commerce, the Economic Bulletin Board, the National Trade Data Bank, or 
their nearest District Office of the U.S. Department of Commerce for 
notices.  
The project cycle includes the steps of project preparation, appraisal, 
approval and implementation.  All projects go through this cycle, 
although the time required varies.  The best way to monitor projects is 
to subscribe to Procurement Opportunities, the monthly newsletter 
published by the bank and mentioned above.  Procurement Opportunities 
provides information on procurement opportunities at all stages of a 
project's development, from the point that a potential operation has 
been identified by the Bank, through to its approval by the Bank's  
Board of Directors.  Both technical cooperation projects as well as 
public sector projects are included, along with contract awards and 
procurement notices.  

Hints and Tips for Winning Contracts:
1) Learn how the Bank operates, how it is organized, its priorities, and 
follow its activities.
2) Determine whether the goods and services your company offers are 
required in Bank-funded projects.
3) Subscribe to Procurement Opportunities. 
4) Focus your efforts on those areas and projects where your firm has 
the best chance of winning.
5) Follow an operation through each stage of the project cycle.
6) Learn as much as you can about the borrower or executing agency 
7) Provide them with information about your company, product or service.
8) If possible, travel to the country of operation and make direct 
contact with the relevant officials.
9) It is often helpful to associate with a local agent or representative 
in the borrowing country, especially for consultants, since most 
consultant business occurs very early in the operation cycle.
10) Obtain tender documents as soon as they are available.  Local agents 
can be very helpful in this regard.
11) Read the tender documents and evaluation criteria carefully.  Make 
sure your tender is priced competitively and complies strictly with all 
specifications and contractual conditions stipulated in the documents.  
12) Ensure that all required bonds, guarantees, or deposits are posted 
for each contract bid.
13) If at all possible, attend the tender opening to learn about your 
competitors' pricing.
14) If you did not win, analyze the reasons, and learn from your 
experience, and modify your subsequent tenders. 

C. CONSULTANTS
Consulting Opportunities:  The EBRD makes extensive use of consultants 
to execute its technical cooperation program, to assist in project 
preparation and implementation, and to perform due diligence.  
Consultants are utilized to undertake sector and feasibility studies, to 
identify and prepare projects, and to provide training, technical 
assistance and advisory services across a wide range of sectors.  In 
addition to the more traditional public sector infrastructure expertise, 
the Bank seeks advisory services in the areas of privatization, 
legislative reform, environment, training and other areas necessary for 
creating an efficient institutional infrastructure.  The Bank's clients 
may also need consultants, either as advisors or to implement or 
supervise a project.  
The Consultant Contracts Unit of Bank is developing a Consultant 
Database (CDB) for individuals and companies.  The EBRD recommends that 
individual consultants and consultant firms register with the CDB, as 
Bank staff may refer to the CDB when looking for qualified consultants 
for their projects.
Consultants are evaluated on their qualifications: quality and 
accountability are held in higher regard than the cost of consultation 
services.  The EBRD considers both technical abilities and consulting 
experience similar to the particular project and region, highly 
important.  The Consultant Contracts Unit suggests that consultants 
interested in registering with the CDB have a minimum of five years 
experience and expertise in the areas of EBRD operations.
In order to register for the CDB, the Consultant Contracts Unit requests 
that a consulting individual(s) or firm send a maximum two page summary 
outlining its respective qualifications, experiences, and expertise. 
Consultants are not required to register with the EBRD's Consultant 
Database and registration is not considered a precondition for Bank-
financed assignments.  Please note that CDB registration does not 
constitute the Bank's endorsement of a consultant's qualifications nor a 
precondition for Bank financed assignments.
Requirements for consulting services over 50,000 ECU are posted in the 
Bank's monthly pipeline publication, Procurement Opportunities, and 
consist of expressions of interest, technical cooperation notices and 
general procurement notices.  Subscribers to this publication will also 
receive notification of upcoming opportunities by facsimile 
transmission.  Consultants are encouraged to use this publication to 
identify assignments where their expertise may be required and should 
respond directly to the project officers listed in the announcements.
For very short term assignments (under ECU 50,000) where the use of 
individual consultants is most likely, the EBRD is interested in 
receiving resumes of self-employed individual consultants in order to 
identify services relevant to Bank-financed projects.  (The Education 
and Training Unit, the Environmental Appraisal Unit, and the Office of 
the General Counsel also maintain their own data bases.)   

Technical Cooperation: In addition to making loans and equity 
investments, the Bank also provides technical cooperation to assist the 
countries of operation in their transition to market-oriented economies.  
The Bank has established a Technical Cooperation Funds Program (TCFP) 
which provides support for project preparation, project implementation 
and institutional development both for public and private sector 
investments including privatization and restructuring projects.  
Consultants are used extensively for all these activities.
Technical cooperation is provided generally on a grant basis.  The 
Bank's Technical Cooperation resources come from funds contributed by 
donors on a voluntary basis.  To date, 35 CFP agreements and 2 Technical 
Cooperation Special Fund Agreements have provided the Bank with a grant 
resource base of ECU 250 million.
Financing Technical Cooperation: Many of the Technical Cooperation Funds 
are "tied" -- meaning that consulting companies other than those from 
the Technical Cooperation Fund's donor country are ineligible to bid on 
the project.  The U.S. has established its own 'tied' source of 
technical cooperation finance -- the Evergreen Fund (funded and 
administrated by the U.S. Trade and Development Agency).  The U.S. fund 
is constantly replenished, maintaining a funding level of $500,000.  
U.S. consultants have access to this fund, as well as to two "untied" 
funds established by Japan and Taiwan totaling ECU 60.1 million.  The 
European Union has a very large trust fund (ECU 90 million) at the EBRD.  
Some U.S. consultants with European offices and staff have succeeded in 
tapping this resource.  
All Technical Cooperation funded consultancy contracts over ECU 500,000 
are published in Procurement Opportunities and the source of financing 
is usually listed as an indication of bidding restrictions.

Key Sectors/Activities:  In 1994, Technical Cooperation commitments were 
made for the following activities: 61% for project preparation, 19% for 
advisory services, 13% for project implementation, 6% for training and 
1% for sector studies.
TECHNICAL COOPERATION COMMITMENTS BY SECTOR (as of December 1994) 
Sector           Projects     ECU million         %
Finance            144         52.4            23.8
Energy             146         37.6            17.1
Transport           90         34.0            15.5
Privatization       89         22.6            10.3
Environment         80         16.1             7.3
Agribusiness        74         15.0             6.8
SMEs *              55         13.4             6.1
Telecommunications  60         11.9             5.4
Restructuring       65          9.8             4.4
Legal               31          3.6             1.6
Industry            17          2.1             1.0
Tourism              6          0.8             0.4
Miscellaneous       15          0.6             0.3
Total              872        220.2           100.0
* Small and Medium-sized Enterprises

Private Sector Feasibility Studies: Development and preparation of 
private sector investments are, by definition, the responsibility of 
private sector sponsors or operators.  However, if the Bank becomes 
financially involved in the investment, it would consider incorporating 
the cost of the feasibility study in its loan or valuing the study as 
part of the private investor's equity participation. Companies should 
contact the U.S. Trade and Development Agency for more information on 
feasibility study finance (Tel: 703-875-4357)

CHAPTER IV: KEY EBRD PUBLICATIONS
1) Procurement Opportunities - available monthly by annual paid 
subscription (£85) and includes a timely fax notification service of all 
tenders and technical cooperation projects.  Includes the Bank's project 
pipeline which list all Bank-financed public sector projects and their 
status, associated procurement notices, and technical cooperation 
projects. It is an up-to-date record of Bank project activities and a 
means of monitoring contract awards.  Order information, Tel:  44 71 
639-0333, fax:  44 71 358-9568.
2) Annual Reports - comprehensive annual review of the Bank's 
operations.
3) Transition Report and Update - report on economic transition, 
including indicators of regional advancement and individual country 
surveys.
4) Financing with the EBRD - booklet outlining the Bank's private sector 
operations, project eligibility, how to approach the Bank with 
proposals.
5) Alternative Sources of Finance for Small and Medium-sized Projects - 
comprehensive listing of financial intermediaries linked to the EBRD 
that address financing needs of smaller projects.

For a complete listing of EBRD publications or to order copies of any 
Bank publications, contact:
   The Documentalist   
   European Bank for Reconstruction and Development
   One Exchange Square
   London  EC2A 2EH
   United Kingdom
   Tel: 44 171 338 6541
   Fax: 44 171 338 7544

CHAPTER V: EBRD CONTACTS
To contact the Senior Commercial Officer in the U.S. Office:
   Sarah Shackelton (Acting)
   Office of the U.S. Director
   European Bank for Reconstruction and Development
   One Exchange Square
   London EC2A 2EH
   Tel: 44 171 338 7532
   Fax: 44 171 338 6487
For project inquiries and proposals contact:
   Business Development Unit   Tel:   44 171 338 7690
                               Fax:   44 171 338 6102
For more information on the procurement process contact:
   Procurement Unit         Tel: 44 171 338 6534
                            Fax: 44 171 338 7017
For consultant registration contact:
   Consultant Contracts Unit    Tel: 44 171 338 6477
   (Consultant Database)        Fax: 44 171 338 6097
For general consulting information contact:
   Consultant Contracts Unit   Tel: 44 171 338 6909
For general information on the EBRD and the other Multilateral 
Development Banks:
   Brenda Ebeling, Director   
   Office of Multilateral Development Bank Operations
     Room 1223               
   U.S. Department of Commerce      Tel: (202) 482-3399
   Washington, D.C. 20230           Fax: (202) 273-0927
For information on doing business in central and eastern Europe, 
including publications and a 24-hour fax system providing information 
from a large and frequently updated menu:
   Eastern Europe Business Information Center (EEBIC)
   Room 7412                  Tel: (202) 482-2645
   U.S. Department of Commerce      Fax: (202)482-4473
   Washington, D.C. 20230         FLASH FAX: (202) 482-5745
"One-stop shopping"  for U.S. firms interested in doing business in the 
Newly Independent States (NIS) of the Former Soviet Union.  Includes a 
reference library, publications, and a FLASHFAX service of fast-breaking 
trade leads and market information:
   Business Information Service for the 
   Newly Independent States (BISNIS)
   Room 7413                  Tel: (202) 482-4655
   U.S. Department of Commerce      Fax:   (202) 482-2293
   Washington, D.C. 20230         FLASH FAX: (202) 482-3145
Country Commercial Guides are available on the National Trade Data Bank 
on CD-ROM or through the Internet. Please contact STAT-USA at 1-800-
STAT-USA for more information. To locate Country Commercial Guides via 
the Internet, please use the following world wide web address: WWW.STAT-
USA.GOV. CCGs can also be ordered in hard copy or on diskette from the 
National Technical Information Service (NTIS) at 1-800-553-NTIS.

CHAPTER VI: COUNTRY STRATEGIES
The balance of this commercial guide is devoted to summaries of  a 
majority of the European Bank's Country Strategies.  They are included 
to provide the reader with a thumbnail sketch of  the framework that 
guides the Bank's activities in a particular country.  However, simply 
because a particular industry sector or project is not discussed in a 
country's strategy document does not imply that the Bank will not 
entertain project proposals in that area, only that it has not been 
specifically identified for near term Bank activities.

ARMENIA
The EBRD's principal operational objectives in Armenia are as follows:
- Restoration of secure and environmentally safe energy supplies. To 
continue ongoing activities for successful completion of the Hrasdan No 
5 Power Project. Bank efforts will be directed towards ensuring: (i) 
satisfactory progress with plant construction, through close project 
monitoring; and (ii) compliance with loan conditionally, especially 
regarding tariff reform. The Bank will also review work being undertaken 
on the Medzamor nuclear power plant, in view of the government's 
announcement that it intends to proceed with reopening one of the two 
units at the plant.
- Removal of critical air transport bottlenecks. To increase air cargo 
handling capacity at Yerevan airport.
- Financial sector restructuring and development. To assist in shaping 
reforms of the banking sector, particularly commercial banks, through 
highly focused technical cooperation to complement efforts by other IFIs 
and bilateral agencies. The Bank is also undertaking preparatory 
activities to establish, as soon as feasible, a suitable financing 
vehicle to provide equity and term lending to private sector SMEs. This 
would be complemented with advisory services to SMEs, including how to 
prepare business plans.
- Private sector development through privatization support. Efforts will 
focus on post-privatization support of SMEs, particularly those involved 
with light, high technology goods that can be exported by air. The Bank 
will also seek to support initiatives that significantly advance 
privatization of agricultural support industries and agro-processing.
- Other initiatives. These may comprise very selective activities in 
agriculture, energy saving, telecommunications and property. 

AZERBAIJAN
The EBRD's principal operational objectives in Azerbaijan are as 
follows:
- Financial sector: special emphasis will be given to the improvement of 
a selected segment of the financial sector, possibly by the launching of 
a credit line for SMEs, associated with technical cooperation for 
institution building at participating banks. Alternatively, the Bank 
might sponsor the creation of a new financial institution in Azerbaijan. 
The country might also benefit from the planned creation by the Bank of 
a Venture Capital Fund for the region.
- Private sector: a small number of potential joint ventures. This would 
be in industries associated with the newly signed offshore oil 
production project as well as in other sectors, such as textiles, 
agribusiness, wholesale markets, hotels and tourism, and transport.
- Critical public infrastructure: initially, the Bank will concentrate 
on an energy efficiency power generation project, as well as a water 
supply rehabilitation project.
The EBRD will furthermore devote considerable resources to the 
development of a pipeline for further projects in both the public and 
private sector, commensurate with emerging opportunities and progress in 
reform.
 
CZECH REPUBLIC
The EBRD's principal operational objectives in Czech Republic are as 
follows:
- Support for the private sector through: assistance for mainly export-
oriented Czech companies, joint ventures with foreign partners, 
restructuring and modernization of large enterprises and a special 
restructuring program for medium-sized enterprises, and support for 
SMEs. While continuing its debt and equity operations with a number of 
ventures, as well as its existing agency lines aimed at helping smaller 
enterprises, the EBRD plans also to investigate new innovative financing 
mechanisms such as specialized investment funds and local currency loan 
facilities.
- Support for the financial sector by assisting the development of a 
sound and healthy banking sector and capital market. Specific 
initiatives include: full utilization of the recently approved trade 
finance facility for Komercni Banka; bank-to-bank facilities to on-lend 
to SMEs; the establishment of investment funds to stimulate 
privatization and capital markets; further trade finance facilities to 
commercial banks; an equity investment in a regional bank and, to 
complement the Bank's and local initiatives, technical cooperation with 
such institutions as the Export Guarantee and the[?] Insurance Company 
and Czech and Moravian Guarantee and Development Bank.
- Support for infrastructure, especially energy, telecommunications and 
transport.
- Other initiatives in agribusiness, tourism, municipal and regional 
development, and the environment.

ESTONIA
The EBRD's principal operational objectives in Estonia are as follows:
- Private enterprise sector development. To support the government's 
efforts to speed up the privatization process and target the needs of 
the emerging private sector (particularly those of SMEs).
- Support for the financial sector. To strengthen selected commercial 
banks and further support the Estonian Investment Bank, as core players 
in the financial system, and as mechanisms to support SME development.
- Rationalization of energy use/generation. To focus on the 
rationalization of energy use and generation, and catalyze private 
sector participation in the energy sector.
- Targeted improvements of critical infrastructure, to assist the 
economic reform process, particularly private sector development, 
commercialization and trade, by pursuing project possibilities in 
telecommunications and transport to improve local infrastructure, and 
environmental rehabilitation.
In addition, the EBRD will give particular emphasis to:
- helping mobilize additional sources of financing;
- effective coordination of external assistance.
The Bank will strive to reinforce coordination and cooperation among the 
three Baltic states, particularly in the fields of energy and transport.

GEORGIA
The EBRD's principal operational objectives in Georgia are as follows:
- Financial sector restructuring and development: The Bank will 
complement the technical assistance activities of other IFIs and 
multilateral and bilateral agencies through focused technical 
cooperation to private commercial banks. The Bank has also begun to 
examine the possibility of investing in a private financial 
intermediation facility for SME term financing, including the provision 
of assistance to SMEs for business plan preparation.
- Restoration of secure and environmentally safe energy supplies: The 
EBRD has been participating in the design and preparation of a Power 
Rehabilitation Project. Main objectives of the project are: (i) 
alleviation of power shortages and improved system reliability; (ii) 
provision of measures to reduce the country's energy intensity; and 
(iii) establishment of Georgia's electric power utility, "Sakenergo", as 
a commercially viable enterprise.
- Removal of critical transport bottlenecks: The EBRD is examining the 
possibility of partial rehabilitation of the ports of Batumi and Poti. 
Investment in grain handling and storage facilities at either or both of 
these main ports is the most apparent need, but container handling 
facilities are also required. Both ports are scheduled for 
privatization. The Bank will provide technical cooperation to support 
restructuring and privatization and examine investment priorities.
- Private sector development and support of privatization: Efforts will 
focus on post-privatization support of SMEs, especially of those 
producing goods for which there is a ready export market and where a 
proven comparative advantage exists. Integrated agro-servicing and 
processing particularly fits these requirements. In cooperation with 
other agencies, the Bank is also examining the possibility of investing 
in recently privatized agri-produce wholesale markets.

HUNGARY
The EBRD's principal operational objectives in Hungary are as follows:
 - continue to focus on the private sector, offering a wide variety of 
financial instruments on a non-recourse basis, to increase its equity 
commitments and to continue its product development;
- play a major catalytic role in every area where a private-public 
partnership makes the financing commercially viable;
- limit sovereign lending activity to the specific areas that are 
critical for the overall development of the economy, and where the 
country needs the EBRD's involvement;
- continue to focus on the development of physical infrastructure 
(transport, telecoms, utility), and be involved in the privatization of 
these sectors and the financing of concession-type and BOT projects;
- focus on the development of the financial system and offer different 
products, including equity, credit line, trade facilities and other 
instruments.

KAZAKSTAN
The EBRD's principal operational objectives in Kazakstan are as follows:
- financial sector development, restructuring and trade facilitation in 
conjunction with particular support for SMEs and the private sector 
including foreign joint ventures;
- transport and communications facilitation to help relieve both 
physical and institutional trade bottlenecks and to pave the way for the 
development of a Euro-Asian corridor;
- hydrocarbon and mining sector development to catalyze private and 
bilateral capital flows; 
- support for agricultural reform, agribusiness and related industries 
to take stock of the inherent short-term export potential.
Another important strategic objective is the development of productive 
synergies between the policy-based lending activities of other IFIs (for 
example, the World Bank and the Asian Development Bank) and the more 
project-by-project approach of the EBRD.

LATVIA
The EBRD's principal operational objectives in Latvia are as follows:
- privatization assistance and private enterprise sector development, 
principally aiming at supporting the government's recent emphasis on 
privatization and at targeting the needs of the emerging private sector, 
particularly those of SMEs;
- strengthening of the financial sector, with the view of establishing a 
few sound banks as core players in the financial system, also as a way 
of overcoming the current short-termism of the financial sector;
- rationalization of energy use and generation, and diversification of 
sources of energy supply;
- targeted improvements of critical infrastructure, particularly aimed 
at overcoming bottlenecks to private sector development and trade, and 
environmental rehabilitation.
In addition, the EBRD will give particular emphasis to:
- helping mobilize additional sources of financing;
- effective coordination of external assistance.
The Bank will strive to reinforce coordination and cooperation among the 
three Baltic states, particularly in the fields of energy and transport.

LITHUANIA
The EBRD's principal operational objectives in Lithuania are as follows:
- private enterprise sector development, particularly aiming at 
supporting the needs of the emerging private sector and SMEs;
- strengthening of the financial sector, with a view to establishing a 
few sound banks as core players in the financial system and assisting 
SMEs in particular;
- rationalization of energy use, security of supply and nuclear safety;
- targeted improvements of critical infrastructure, particularly aimed 
at strengthening private sector development, commercialization and 
trade, and environmental rehabilitation.
In addition, the EBRD will give particular emphasis to:
- helping mobilize additional sources of financing;
- effective coordination of external assistance.

MOLDOVA
The EBRD's principal operational objectives in Moldova are as follows:
- Financing of investment in productive sectors. This objective will be 
pursued in two main ways. First, the EBRD will focus on the development 
of the export potential of the agricultural sector of Moldova, which 
represents a major source of economic activity and employment. This will 
initially focus on the wine and horticultural sub-sectors where Moldova 
has a comparative advantage. Second, the Bank will adopt a proactive 
approach to identify and support private sector investment in 
manufacturing. This will involve more intense marketing and the 
financing of joint venture projects with high demonstration impact to 
induce foreign investment in Moldova.
- Financial sector strengthening. The EBRD will focus its assistance to 
a limited number of viable financial institutions with a view to 
improving their operational effectiveness. This will lead to increased 
competition in the sector and complement, at a bank-specific level, the 
financial sector restructuring activities undertaken by other 
international financial institutions (IFIs). The EBRD's support for 
these financial institutions will comprise a small loan or a credit line 
which will be targeted towards private SMEs.
- Critical infrastructure investment. The EBRD will proceed with 
specific infrastructure projects, prioritizing those that contribute 
significantly to removing immediate bottlenecks for economic and private 
sector development. In light of Moldova's high level of energy 
dependency, the initial focus would be placed on energy efficiency. 
Private sector involvement will be sought in telecommunications, while 
transport investments will be carried out in parallel with the 
privatization of the road transport services industry. The 
infrastructure portfolio will be developed in close coordination with 
the World Bank.

POLAND
The EBRD's principal operational objectives in Poland are to:
- support the acceleration of the government's mass privatization 
program and enterprise restructuring program;
- continue the task of meeting gaps in the financial market by financing 
individual private sector ventures, especially those involving national 
entrepreneurs;
- further develop a pilot program started in 1993 to privatize regional 
state-owned enterprises, with the participation of national financial 
institutions, for on-selling to private investors including management;
- create a viable, more sophisticated and diverse capital market 
accessible to individual Polish entrepreneurs and enterprises;
- increase the participation of other financial institutions in EBRD-
initiated deals, not only through syndication but also through planned 
marketing of sub-participation and private placements as markets for 
them can be developed;
- focus on strategies for expanding trade, either by funding export 
ventures or trade financing operations;
- prove the potential of project financing for infrastructure projects;
- promote environmental improvement and environmental protection 
measures throughout the program, especially in energy and local 
infrastructure operations.

ROMANIA
The EBRD's principal operational objectives in Romania are as follows:
- Private sector investment: to increase the volume of financing for 
private sector manufacturing, agriculture, agribusiness and export-
oriented projects, which represent a major potential source of economic 
activity and employment. This will involve an intensification of 
marketing, and the financing of local entrepreneurs and of joint venture 
projects with high demonstration impact to induce foreign investment in 
Romania.
- Privatization and restructuring: to develop a specific program of 
assistance including an investment-led privatization program directly 
with the State Ownership Fund in privatization and restructuring of 
medium and large-sized enterprises. Activities in this area are being 
closely coordinated with other external assistance sources.
- Financial sector strengthening: to build upon its already strong 
financial sector portfolio. The EBRD intends to play a specific role in 
supporting bank privatization and will continue to support individual 
banks through bank-to-bank or credit lines with a particular focus on 
private banks. Attention will also be given to the development of 
specialized financial services such as leasing or equity funds. These 
activities will provide the EBRD with a broad range of channels to 
respond to the financing requirements of local SMEs.
- Critical infrastructure investment: to pursue the development of a 
strong infrastructure pipeline in addition to devoting close attention 
to the implementation of the existing portfolio. Among key sectors that 
the EBRD is currently considering are energy, transport, 
telecommunications and urban and environmental infrastructure. The 
infrastructure pipeline is being developed in close coordination with 
the European Investment Bank and the World Bank.

RUSSIAN FEDERATION
As of 30 November 1994 the EBRD's Board had approved 41 investment 
projects for Russia, valuing the Bank's investment at US$ 1.24 billion 
(ECU 1.0 billion) of loan and equity financing for projects with a total 
project value of US$ 3.87 billion (ECU 3.0 billion). Of these, 26 have 
been signed, committing the Bank to providing US$ 822 million (ECU 660 
million) of which US$ 442 million (ECU 370 million) has been disbursed. 
Russia is the largest single recipient of the Bank's technical 
cooperation funds, worth a total value of US$ 92.2 million (ECU 75.6 
million). Technical cooperation funds are grant funds which are only 
made available on a selective basis for the preparation of projects to 
bring them to a level at which the Bank and other potential partners can 
make a loan or investment decision. The bulk of the commitments have 
been for privatization and project preparation. 
The EBRD's main operational objectives in the Russian Federation are as 
follows:
- Promotion of enterprise development. The EBRD's assistance will aim at 
supporting the emergence of new enterprises and the restructuring of the 
existing ones by: (i) extending the scope of the ongoing SME pilot 
project and beginning the full-scale SME Fund operation; (ii) continuing 
the financing of selected joint-venture operations, and intensifying the 
Bank's involvement in the restructuring process of the Russian medium-
sized and large enterprises, primarily through a widening network of 
regional venture funds but also through other vehicles of support; (iii) 
pursuing a proactive approach regarding restructuring, and financing a 
select group of the major Russian enterprises. 
- Support of the financial sector. In line with its comparative 
advantage, the Bank will continue to focus on direct bank-to-bank 
operations. The primary target of the Bank's assistance will be the 
group of commercial banks identified under the FIDP project. Equity 
investments will be sought in those banks that will be identified as key 
strategic partners in implementing the Bank's sectoral and regional 
priorities. New products such as guarantees for trade facilitation and 
leasing lines will be developed to meet the particular needs of the 
Russian market. A new priority area for the Bank will be the development 
of the capital market.
- Development of energy resources. The Bank's activities in the oil and 
gas sector will continue to focus on stabilizing energy production and 
improving transportation of oil and gas. Priority will be given to 
implementing the projects already approved. An important element of the 
strategy will be the development of the relationship with Gazprom. 
Energy conservation will become an important priority. The Bank's 
activities in the energy sector will support, wherever possible, nuclear 
safety objectives. 
- Support of critical infrastructure. The Bank will be able to finance a 
number of potential projects in the railway sector if the government can 
guarantee such financing. Airport developments and port projects will 
also be pursued, as long as they are viable as private sector 
transactions. Roads and highways will be left to the World Bank to 
finance, with the possible exception of a toll motorway which could be 
financed as a BOT. In the telecommunications sector all the projects the 
Bank is involved in are capable of generating substantial convertible 
currency revenues, and will be considered for limited recourse 
financing. 
Financial Institutions Development Project:  With the first part of the 
Mass Privatization Program complete and an estimated 14,000 medium-sized 
and large companies privatized, the demand for commercial banking 
services has increased dramatically. Although many new commercial banks 
have been established in Russia during the last three years, the quality 
and range of services they are able to provide is, at present, 
inadequate to deal with that demand.  
The Financial Institutions Development Project (FIDP) aims to strengthen 
and develop a core group of between 30 and 40 Russian commercial banks 
that are expected to assume prominent roles within the developing 
Russian commercial banking sector. In the absence of fully effective 
capital markets, the commercial banks are likely to play a key role in 
the transformation and restructuring of the Russian economy.
The Program has been undertaken in cooperation with the Russian 
government and the World Bank. In support of the project, the European 
Bank for Reconstruction and Development (EBRD) has extended a US$ 100 
million loan to the Russian Federation.
Through this program the EBRD can establish effective working and co-
financing relationships with individual commercial banks.  The Russian 
banks in turn are able to increase their ability to lend to the growing 
Russian private sector according to sound banking principles.
The project has three main purposes:
- strengthen bank operations by preparing and implementing strategies 
and business plans for each of the banks;
- modernize the banks' information technology and automation programs;
- develop measures aimed at enhancing the financial soundness of the 
banks.
Technical assistance will be provided mainly through contractual 
twinning arrangements with leading foreign banks.
In addition to the FIDP, a jointly financed EBRD/World Bank credit line 
(Enterprise Support Project) for US$ 300 million is in place to provide 
loan financing to large and medium-sized private sector companies via 
the core group of banks.
Russia Small Business Fund:  There are currently about 70,000 registered 
small businesses in Russia, with estimates of up to 3 million for those 
unregistered. Russian entrepreneurs have extreme difficulty in setting 
up new businesses as they face barriers such as cumbersome licensing 
procedures, limited access to transportation and distribution services, 
and the lack of access to bank financing. 
The EBRD is implementing a program, the Russia Small Business Fund, to 
provide such small businesses with funding and management assistance. 
Supported by the G-7 countries, the EBRD has established a US$ 300 
million fund, half of which is being funded from EBRD resources and half 
from donor countries. 
The Russia Small Business Fund provides micro and small loan financing 
of up to US$ 50,000 (or in exceptional cases up to US$ 75,000), which 
has not been available previously for small firms from local banks. 
Loans are for two years with a grace period of up to 6 months. Micro 
credits, of US$ 100 to US$ 30,000 rouble equivalent, are generally for 
shorter terms to begin with, as the company builds up a credit record 
and is allowed subsequent longer and larger loans, for all purposes 
(working capital and investment).   
Staff from the EBRD, the US Shore Bank and the German company 
InterdisciplinierProjektConsult (IPC) are working in regional banks 
alongside credit officers to process loans and to increase the banks' 
general capabilities. The program was initially implemented in three 
regions, Tula, Nizhniy Novgorod and Tomsk but has expanded to include 
Novosibirsk, Samara, Togliatti and St. Petersburg.  There are currently 
[ten] local on-lending funds.
The Bank is also working with specialist small business advisers, 
including the Morozov project, who have very strong local backing and 
support. Through the Business Training Centers, services in business 
planning and management techniques plus training are on hand to Russian 
entrepreneurs. 

SLOVAK REPUBLIC
The EBRD's principal operational objectives in the Slovak Republic are 
as follows:
- Support for privatization and restructuring. To accelerate the 
privatization process while concurrently assisting the restructuring of 
enterprises. In this the Bank will not neglect suitable foreign partners 
for participation in its activities with the aim of encouraging export-
oriented companies and stimulating the interest of foreign capital in 
the country's economy. It will also consider initiatives to alleviate 
the problems of corporate governance of existing enterprises by setting 
up investment funds.
- Financial sector and banking reform. To support the growth of private 
sector banks while upgrading banking skills and fostering competition 
among them. The Bank will also support the establishment of financial 
institutions that provide new ranges of services.
- Support for small and medium-sized enterprises. To pursue the task of 
SME development through a variety of initiatives, such as increasing the 
involvement of local banks in SME financing and sustaining the 
establishment of financial vehicles to facilitate trade. In this 
context, the Bank is considering a Special Restructuring Program. It 
will also support where necessary the creation of new specialized 
financial institutions, e.g. investment funds, venture capital and 
leasing companies.
- Support for public infrastructure and environment. The efficient and 
environmentally acceptable supply of energy is a high priority. Also, 
the Bank will seek opportunities to facilitate the privatization of 
public utilities. The country's strategic position in Europe will 
provide the Bank with the opportunity to support the upgrade and 
modernization of transport and telecommunications.
- Other initiatives. These will consist of very selective activities in 
tourism, agriculture, forestry and agribusiness.

UZBEKISTAN
The EBRD's principal operational objectives in Uzbekistan are as 
follows:
- Financial sector and private sector SME development. Provide finance 
and technical assistance to export-oriented private SME investments 
through the local banking system. A line of credit to the National Bank 
for Foreign Economic Activity of Uzbekistan (NBU) will be supported by a 
comprehensive technical cooperation program to help this bank become an 
effective financial intermediary to assist private entrepreneurs. A 
banking training center in Tashkent will serve the training needs of the 
banking sector in three countries.
- Euro-Asian Trade Facilitation Project. Initiate a major project to 
identify and invest in the improvement of transportation and 
communication, within the framework of a long-term and regional strategy 
for the facilitation of inter-regional and international trade 
connecting the TransCaucasus and Central Asia to Europe and Asia.
- Cotton processing and other industry. Focus on funding export-oriented 
private sector projects in manufacturing. In cotton processing, 
proactively identify and provide finance to investment projects with 
foreign partners.
- Mining and natural resources. Focus on projects in the oil and gas 
sector that have a high impact on the country's external balance, and on 
joint venture projects with foreign partners in the mining sector.
- Telecommunications. Consider a project that would in a short time 
offer the business community in the main cities world-standard 
communications services.
- Energy. Concentrate on investments for energy efficiency improvements 
and institutional reforms.
- Tourism. Support the development of tourism in Uzbekistan through 
expert advice and by funding hotel projects.
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