Eastern Partnership Technical Assistance Trust Fund : EPTATF annual report 2017.
Date: 2018-07-30
Institutions: European Investment Bank
Subjects: Armenia, Azerbaijan, Belarus, EU financial instrument, EU programme, European Investment Bank, Georgia, Moldova, Ukraine, activity report, development policy, technical cooperation

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EPTATF Annual Report 2017 
© European Investment Bank, 2018. 
All rights reserved. 
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2

EPTATF ANNUAL REPORT 2017Contents

EPTATF – What we do 

Statements from contributors 

Statements from beneficiaries 

Statement after a secondment 

Political and macroeconomic development 

EIB lending activities 

The EIB’s lending objectives 

Working with international financing institutions 

Cooperation with the European Commission 

EPTATF results highlights 

EPTATF in 2017 

Success stories 

Operations completed in 2017 

Water economy in Armenia 

Improved heating in three cities in Ukraine 

Contributors and financial status 

Moving forward 

Annexes 

Annex I. Abridged financial statements 

Annex II. Table: EPTATF list of projects 

6

10

11

12

13

14

16

16

16

18

24

30

36

36

37

38

39

40

40

41

This Eastern Partnership Technical Assistance Trust Fund (EPTATF) Annual Report has been prepared in accordance 
with the “Rules relating to the establishment and administration of the EPTATF” and the “EPTATF Rules of Procedure”1. 
It provides a comprehensive overview of the implementation of the EPTATF’s programme in 2017. 

1   In its meetings of 14 July and 21 September 2010, the Board of Directors approved the proposal for the establishment of a multi-purpose and multi-sectorial Fund, the EPTATF, 

together with its rules of management and administration.

3

2017 EPTATF ANNUAL REPORTForeword  
Stronger links among countries 

T he  Eastern  Partnership  Summit  gathered  European 

Union  leaders  and  six  Eastern  European  partners  in 
November  2017  to  decide  on  the  top  priorities  for 
development,  such  as  small  businesses,  the  digital 
economy, broadband and infrastructure. The summit was also 
a chance to highlight how important it is to strengthen links 
between countries and people.  

During the summit, leaders developed a plan, “20 Delivera-
bles for 2020,” to improve lives in the Eastern partner coun-
tries  in  four  areas:  the  economy,  governance,  connectivity 
and society. On the sidelines of the summit, the EU and Ar-
menia  signed  a  partnership  agreement  to  work  closely  on 
more  projects.  The  EU  and  Azerbaijan  also  improved  their 

relations and increased dialogue, signing an agreement to 
improve investment and export potential and take into ac-
count the new global, political and economic challenges af-
fecting the country.

These  two  new  agreements,  and  the  free  trade  and  as-
sociation  agreements  signed  in  2015  between  the  EU  and 
Georgia,  Moldova  and  Ukraine,  have  led  us  to  focus  more 
on  technological  development.  Investments  in  technol-
ogy  have  created  opportunities  in  national,  regional  and 
EU  markets,  particularly  in  the  food  and  agriculture  sec-
tors. In that context, we created the Agri-food Value Chain  
Development  Technical  Assistance  programme  to  help 
small businesses in Georgia, Moldova and Ukraine. 

4

EPTATF ANNUAL REPORT 2017After signing a cooperation deal with the EIB in 2016, Bela-
rus is eligible to be part of the Eastern Partnership. This will 
help the country – after a two-year recession – to develop 
its  private  sector,  improve  infrastructure  and  increase  pro-
ductivity. Technical assistance to be provided by the EPTATF 
will make the economy more dynamic and improve growth. 

The  EIB  is  strongly  dedicated  to  the  Eastern  Partnership, 
providing support to infrastructure investments and private 
sector development, including small and medium-sized en-
terprises and mid-caps. In 2017, our transport infrastructure 
lending  totalled  EUR  410  million,  while  31%  of  the  signed 
EIB operations supported climate action, mainly in clean ur-
ban public transport and energy efficiency. 

The  EPTATF  contributes  significantly  to  EU  objectives  in 
the region. By the end of 2017, the Contributors Committee 
had approved EUR 30.4 million for 25 grant-funded opera-
tions. Seven operations have been completed, while 18 are 
ongoing. 

In  terms  of  new  contributions,  Austria,  Germany,  Lithuania 
and the United Kingdom replenished the fund with an addi-
tional EUR 4.3 million in 2017. Fundraising will remain a pri-
ority in 2018 to further respond to challenges in the region. 

Vazil Hudák 
EIB Vice-President

5

2017 EPTATF ANNUAL REPORTEPTATF What we do

6

EPTATF ANNUAL REPORT 2017The EPTATF started in December 2010 
as a trust fund with multiple Donors, 
covering multiple sectors. It was 
designed to enhance the European 
Investment Bank's work in the Eastern 
Partnership Countries and provide 
better technical assistance (TA).  
The fund was created for several 
reasons – the approval for financing  
in the region was slow, there was  
a lack of resources for preparing 
projects, and promoters had limited 
abilities to implement projects. 

By  the  end  of  2017,  the  EPTATF  had  received  pledges  from 

contributors worth EUR 39.2 million, of which EUR 34.9 mil-
lion  had  been  paid  in.  Countries  eligible  for  EPTATF  sup-
port  are  Armenia,  Azerbaijan,  Belarus,  Georgia,  Moldova 
and  Ukraine.  The  fund  is  also  open  to  cross-border  and  regional 
projects. 

7

2017 EPTATF ANNUAL REPORTPriority sectors 

•  Local  private  sector  development,  support  to  small  and 

medium-sized enterprises;

•  Development of social and economic infrastructure: trans-
port,  energy,  water,  sanitation,  environmental  protection, 
agriculture  and  rural  development,  urban  infrastructure, 
education and research, information and communications 
technology; and

•  Climate change mitigation and adaptation.

Types of support 

We help during the whole project cycle: 

•  identification  of  the  sector  and  development  of  master 

plans; 

•  preparation of feasibility studies: technical, economic and 
financial  appraisal;  environmental  and  social  impact  as-
sessments, upstream studies, gender analysis; and

•  implementation: strengthening project management and 

operations skills.

The  EPTATF  also  supports  capacity-building  programmes, 
such as offering training for officials or providing internships 
and  secondments  at  the  EIB  to  let  people  gain  experience 
working at the Bank.

The governing body

The  EPTATF  is  governed  by  a  Contributors  Committee  that 
meets  twice  a  year.  Contributions  can  come  from  Member 
States of the European Union, the European Commission, the 
Eastern Partnership Countries and third parties. The Commit-
tee offers contributors and the Bank a forum to exchange in-
formation on strategy, policy and projects. This enhances co-
operation and lets us better respond to the challenges in the 
Eastern Partnership Countries.

8

EPTATF ANNUAL REPORT 2017The year at a glance and expected 
results by 2023

8 Donors

25 grant operations
(of which 7 are completed)

Signed amount

EUR
million

16.8

Pledged amount

EUR
million

39.2

Approved amount

EUR
million

EUR
million

30.5 

Disbursed

11.3

Expected results in the region by 2023

Direct employment  
during construction
More than 118,000 person-years

Domestic connections  
to water supply created  
or rehabilitated 6,000

Households benefiting  
from safe drinking water 
More than 66,700 persons

Length of road built  
or upgraded
More than 1,470 km

Number of beneficiaries  
in all sectors
More than 2,423,000 persons

Domestic connections  
to sanitation services created 
or rehabilitated 31,800

Households benefiting  
from improved sanitation 
services 57,000

Number of loans to SMEs
2,300

9

2017 EPTATF ANNUAL REPORTStatements from contributors

 Austria 

We  have  a  long  history  of  helping  our  Eastern  European 
neighbours. As Austria’s foreign, economic and development 
interests  increase  in  the  region,  contributing  to  the  Eastern 
Partnership  Technical  Assistance  Trust  Fund  has  even  great 
significance for us. We have been part of the fund since its es-
tablishment in 2010. The EPTATF greatly enhances the impact 
of the EIB’s lending and has proven very valuable in helping 
beneficiary countries meet their challenges. By providing tar-
geted  high-quality  technical  assistance  in  countries’  critical 
industries  –  like  water,  transport  and  municipal  infrastruc-
ture  –  the  Fund  has  played  a  big  part  in  promoting  sustain-
able inclusive growth. As one of the Fund’s initiators, Austria is 
pleased to confirm its continued support to the EPTATF.

 Lithuania 

Support for the Eastern Partnership Countries is a priority for 
Lithuania.  Our  own  experience  has  shown  that  external  as-
sistance is very important for a country's economic develop-
ment. In our view, technical assistance, such as that provided 
by  the  EPTATF,  is  critical  since  it  helps  improve  institutional 
capacities and contributes to the success of economic, social 
and governance reforms. Finally, the Donors' support builds a 
closer relationship between the EU and the Eastern Partner-
ship Countries. 

Harald Waiglein  

Director General,  
Federal Ministry of Finance of Austria 

Miglė Tuskienė 

Vice-Minister of the Ministry of Finance  
of the Republic of Lithuania

10

EPTATF ANNUAL REPORT 2017Statements from beneficiaries

 Ukraine 

Thanks to the cooperation of the European Investment Bank 
and  the  EPTATF,  we  will  modernise  buildings  of  universities 
that were built in Soviet times. Reducing energy consumption 
will  let  us  invest  the  savings  in  higher  education.  Improving 
energy efficiency should be one of the steps in the integration 
of Ukrainian universities into the European Higher Education 
Area.

 Ukraine 

We  do  not  need  to  reinvent  something  new  or  unique.  In-
stead, we can use Europe’s methods and practices. I believe 
that,  for  example,  in  a  five-year  period  we  can  reduce  road 
traffic deaths by 30-40%. 

Roman Greba  

Deputy Minister for Education and 
Science, Ukraine

Volodymyr Omelyan 

Infrastructure Minister, Ukraine

11

2017 EPTATF ANNUAL REPORTStatement after a secondment

Daniela Frantujan   

EIB Loan Officer, secondee from the 
municipality of Chisinau (Moldova)

It’s been a great experience working at the EIB for two years. 
The secondment gave me the chance to grow professionally 
and personally, and to have new experiences. I enjoyed learn-
ing  about  the  EIB’s  different  projects,  in  the  Eastern  Partner-
ship region. I also gained a deeper understanding of EU blend-
ing facilities and mechanisms to support investment projects 
in the public sector. I am very grateful to the EPTATF for this 
unique opportunity to work in one of the largest international 
financial institutions and to live abroad.

12

EPTATF ANNUAL REPORT 2017Political and macroeconomic 
developments

GDP growth in the region (year-on-year, as %)

10

8

6

4

2

0

-2

-4

-6

-8

-10

2010

2011

2012

2013

2014

2015

2016

2017

2018

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

Source: IMF (WEO); author's calculations

The overall regional economic performance was subdued in 
2016, with some countries falling into recession (i.e. Azerbai-
jan  and  Belarus).  In  the  2015-16  period,  the  low  price  of  oil, 
the  conflict  in  Ukraine,  sanctions  on  Russia  and  the  effects 
of Russia’s economic decline were the main economic chal-
lenges. In 2017, an economic recovery emerged, although fi-
nancial conditions vary across the region, with some places 
stabilising and others reporting robust improvements. Debt 
obligations  (particularly  in  foreign  currency),  government 
budget  limits,  political  uncertainty  and  other  financial  con-
straints  continue  to  weigh  on  the  region’s  investment  out-
look.  Against  this  backdrop,  the  Deep  and  Comprehensive 
Free  Trade  Area  (DCFTA)  Initiative  and  the  Comprehensive 
and Enhanced Partnership Agreement (CEPA) offer medium-
term economic benefits, including improved access to the EU 
markets and potential increases in foreign direct investment.

In Ukraine, despite a 2% growth in real gross domestic prod-
uct,  improving  external  imbalances  and  consolidation  ef-
forts,  political,  economic  and  financial  conditions  continue 
to  be  complex,  debt  levels  are  high  and  the  external  posi-
tion  remains  fragile.  The  International  Monetary  Fund  pro-
gramme, together with measures adopted by National Bank 
of Ukraine, are strengthening financial stability and improv-
ing confidence. The Belarusian economy, after two years of 
recession, grew by an estimated 1.8% in 2017. The recession 
prompted  the  authorities  to  define  an  agenda  to  promote 

market  reforms  and  macroeconomic  stability.  The  Moldo-
van economy, following vulnerable times related to internal 
and external shocks, continued to improve, with GDP grow-
ing  by  3.5%.  An  improved  external  environment  and  fur-
ther  integration  with  the  European  Union  helped  the  grad-
ual  recovery.  The  on-going  IMF  programme  is  also  helping 
stability. In Georgia, GDP growth accelerated to 3.9% as the 
country  continues  to  improve  the  business  environment, 
providing more growth opportunities for businesses. On the 
other  hand,  the  weak  external  position  and  high  use  of  the 
dollar remain key vulnerabilities. In Armenia, GDP growth ac-
celerated from 0.2% in 2016 to 3.5% in 2017, helping the gov-
ernment  proceed  with  fiscal  consolidation.  Improvements 
with major trading partners and in the private sector should 
keep helping the economy in 2018. However, high use of the 
dollar in the banking sector and increasing public and exter-
nal  debt  should  be  monitored.  In  July  2017,  the  Republic  of 
Armenia  successfully  completed  the  IMF’s  programme  un-
der the Extended Fund Facility (EFF), while the Comprehen-
sive and Enhanced Partnership Agreement between the Eu-
ropean  Union  and  Armenia  was  signed  in  November  2017. 
Oil-dependent Azerbaijan had the only economy in the East-
ern Neighbourhood region that contracted in 2017 (by 1.4% 
of  GDP),  which  is  still  an  improvement  on  the  3.1%  contrac-
tion  in  2016.  The  EU-Azerbaijan  Comprehensive  Agreement 
is expected to improve the country’s investment and export 
potential.

220

1 640

13

2017 EPTATF ANNUAL REPORTEIB lending activities

In 2017, the EIB’s lending in the Eastern Neighbourhood to-

talled EUR 734 million, a decline compared to the previous 
year’s EUR 1.6 billion, largely due to the EIB’s commitment to 
deliver on the Special Action Plan for Ukraine over the pe-
riod 2014-2016. There also was limited room to invest in 2017 
because of the ceiling for the External Lending Mandate (ELM) 
for  Eastern  Europe,  Southern  Caucasus  and  Russia,  which  is 
now being increased in the context of the mid-term review of 
the  ELM.  With  limited  opportunities  because  of  country  rat-
ings, 92% of our lending was under the ELM. 

Support to transport infrastructure represented EUR 410 mil-
lion,  demonstrating  the  EIB’s  desire  to  connect  transport  in 
the  region  and  make  it  more  sustainable.  EIB  financing  in 
2017  supported  other  crucial  sectors,  such  as  local  private 
sector  development,  energy,  municipal  infrastructure  and 
agribusiness.

In 2017, 31% of signatures supported climate action. The main 
contributors to climate action were clean urban public trans-
port and energy efficiency with the remainder coming from 
credit lines. There is a lot of potential for energy efficiency in 
the region, so the EIB is stepping up its financing and advi-
sory support in this field. As a flagship project for climate ac-
tion and the quality of the urban environment, the EIB signed 
a  EUR  160  million  loan  with  the  Kharkiv  metro  operator  in 
Ukraine,  co-financed  by  the  European  Bank  for  Reconstruc-
tion and Development (EBRD). The EIB also blended financing  

and  grants  from  the  Eastern  Europe  Energy  Efficiency  and 
Environmental Partnership (E5P) for energy efficiency in mu-
nicipal  buildings  in  Chisinau  and  Yerevan.  These  projects 
were prepared with technical support funded by the Munici-
pal  Project  Support  Facility  (MPSF).  Similarly,  EIB  financing 
targeted energy connections to help countries reduce ener-
gy dependency and bolster their resilience. 

A EUR 80 million loan was provided for transmission connec-
tions between Moldova and Romania, enabling Moldova to 
diversify  its  electricity  supply  by  having  access  to  the  Euro-
pean electricity market. This project was developed via close 
cooperation  between  the  European  Commission  (providing 
a EUR 40 million grant), the EBRD, the EIB and the World Bank.

Lending  to  Ukraine  totalled  EUR  318  million,  represent-
ing  more  than  40%  of  total  new  commitments  in  the  East-
ern Neighbourhood. The EIB’s dedicated Task Force Ukraine 
continued  to  ensure  an  intensified  follow-up  on  signed  op-
erations  and  an  acceleration  of  project  preparation  and 
implementation.

The EIB offered substantial financing for projects in Georgia, 
with  a  EUR  250  million  framework  loan  for  improved  trans-
port  connections  within  Georgia  and  among  neighbouring 
countries. The investment supported the extended Trans-Eu-
ropean  Transport  (TEN-T)  network.  This  project  strengthens 
regional integration.

14

EPTATF ANNUAL REPORT 2017EIB Lending in the Eastern Partnership Countries 
(EUR m)
2000
2000

10

1500
1500

1000
1000

500
500

0
0

1640

1487

1176

934

742

734

675

381

230

170

100

line with Credo Bank for Georgian small businesses, particu-
larly in rural areas. This operation is partially financed by the 
European Union's Neighbourhood Investment Facility.

Lastly, the EIB Group deployed the “Innovfin – EU Finance for 
Innovators” programme in associated countries in the region 
under  the  Horizon  2020  initiative  (Armenia,  Georgia,  Mol-
dova, Ukraine), providing a series of integrated and comple-
mentary  financing  tools  and  advisory  services  targeting  in-
vestments in research and innovation.

220

1 640

NC East signed loans by country 2007 - 2017

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Moldova, 10%

For  the  period  2014-2020,  the  EU  has  entrusted 
the  Bank  with  an  External  Lending  Mandate  of 
EUR  4.8  billion  to  support  projects  in  the  Eastern 
Partnership  Countries.  In  addition,  the  Bank  has 
 Azerbaijan
the  Neighbourhood  Finance  Facility 
established 
covering  the  whole  region  to  finance  EUR  3  billion 
worth of projects at its own risk.

Armenia

Belarus

Ukraine, 66%

Georgia, 19%

Azerbaijan, 1%

Georgia

Armenia, 4%

 Moldova

  Ukraine

In 2017, the Bank continued to support the local private sec-
tor,  through  intermediated  lending  and  direct  loans.  This 
year, the Bank provided its first local currency loan in Ukraine 
to improve small and medium-sized businesses’ access to fi-
nancing.  The  loan,  worth  EUR  60  million,  to  ProCredit  Bank 
Ukraine was made possible by the TCX and Donor resources 
from the EU. The EU supported the transaction by allocating 
EUR 5 million of grant funding, which enabled an enhance-
ment  of  the  high  hedging  costs  and  a  competitive  interest 
rate  on  the  loan.  The  EIB  also  signed  a  EUR  10  million  loan 
with ProCredit Bank Moldova to support small businesses.

In 2017 – for the first time in the region – the EIB Group signed 
guarantee  agreements  with  seven  financial  intermediar-
ies across Georgia, Moldova and Ukraine to support around 
EUR 285 million of lending to small and medium-sized enter-
prises (SMEs) under the EU4Business initiative. These guaran-
tees are funded by the European Union through the Neigh-
bourhood  Investment  Facility.  The  EIB  also  signed  its  first 
microfinance investment in Georgia – a USD 5 million credit 

NC East signed loans by sector 2007 - 2017

Other, 13%

Loans to SMEs, 40%

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

2000

10

Environment, 3%

Energy, 18%

Transport, 25%

15

10

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

2000

1500

1000

500

0

1500

1000

500

0

220

1 640

220

1 640

2017 EPTATF ANNUAL REPORT 
 
The EIB’s lending objectives 

The EIB is committed to providing lending and other services to 
its Eastern Partners for years to come. 

As a result of the stepped up effort pledged by the EU regard-
ing EIB lending support to Ukraine, the Eastern Neighbourhood 
regional  lending  ceiling  under  the  External  Lending  Mandate 
(ELM) was almost reached by end-2017. 

The fragile economies in several countries combined with en-
hanced economic and political relationships with the EU mean 
that continued support from the EU bank is required.

In  response  to  large  investment  needs,  EIB  lending  will  help 
transport  and  connectivity  between  the  EU  and  the  Eastern 
Partnership Countries, energy infrastructure, the security of en-
ergy supply, environmental and climate change mitigation and 
energy efficiency. We will also address investment needs in so-
cial sectors such as health and education to improve the qual-
ity of people’s lives. EIB investments target the priorities under 
association agreements and the Deep and Comprehensive Free 
Trade  Area  (DCFTA)  agreements  for  the  signatory  countries  of 
Georgia, Moldova and Ukraine. 

The EIB will keep working with financial intermediaries to fund 
SMEs and mid-caps. We will focus on EU-based companies, in-
novative  companies  and  mid-caps  with  strong  development 
potential. In the context of the “DCFTA Initiative East,” support-
ed by the Neighbourhood Investment Facility (NIF) and EPTATF 
grants, the EIB will continue to strengthen the private sector’s 
access  to  finance.  This  access  is  especially  important  for  small 
businesses, to ensure that they can compete in local and inter-
national markets. 

In the years to come, EIB lending will have to adjust to uncer-
tainties, such as evolving political priorities and growing limita-
tions of borrowing capacity in some countries. The lack of bor-
rowing capacity increases the need for investment grants. 

The  EIB  will  now  be  active  in  all  countries  of  the  Eastern  Part-
nership region. The Republic of Belarus became eligible under 
the ELM in 2016 by a Delegated Decision of the European Com-
mission. The Framework Agreement between Belarus and the 
EIB came into force in August 2017 marking the start of mutu-
al cooperation. In 2017, a number of investment projects were 
identified for potential EIB support in the transport, energy and 
water  sectors  as  well  as  in  the  private  sector,  including  SMEs 
and corporates. The first transport operation relating to the up-
grade of the highway from Minsk to the Lithuanian border on 
the  core  extended  Trans-European  Transport  (TEN-T)  network 
was approved by the EIB Board in December 2017.

Working with international financing 
institutions

The  Bank  cooperates  closely  with  the  other  international  fi-
nancing institutions active in the Eastern Partnership Countries, 
in particular by co-financing projects under the European Un-
ion's Neighbourhood Investment Facility. The Bank and the Eu-
ropean Commission signed a cooperation agreement with the 
European Bank for Reconstruction and Development (EBRD) in 
2012. Agence Française de Développement (AfD), Kreditanstalt 
für  Wiederaufbau  (KfW)  and  the  EIB  cooperate  closely  in  con-
nection with the Mutual Reliance Initiative (MRI).

Cooperation with the European 
Commission 

The EU’s special relationship with neighbouring countries aims 
to establish an area of prosperity and show good neighbourli-
ness. The effort is founded on the EU’s core values and is the ba-
sis of the revised European Neighbourhood Policy (ENP). The EU 
uses  the  European  Neighbourhood  Instrument  (ENI)  to  chan-
nel the bulk of EU funding to the ENP partner countries via the 
Neighbourhood Investment Platform. 

The  Bank  cooperates  extensively  with  the  European  Commis-
sion, mainly through blending with the NIF and the Eastern Eu-
rope  Energy  Efficiency  and  Environmental  Partnership  (E5P). 
The NIF provides funding to projects across a range of sectors 
whereas the E5P, which is also funded by other Donor contribu-
tions, has a more specific focus. The EIB uses these complemen-
tary  funding  sources,  including  the  EPTATF,  to  achieve  com-
bined objectives and to enhance the impact for beneficiaries. 

In  2017,  three  Delegation  Agreements  (for  the  NIF)  and  one 
Funding  Agreement  (for  the  E5P)  in  the  Eastern  Neighbour-
hood  region  were  signed:  the  Armenia  Road  Safety  Improve-
ment  Project,  the  Ukraine  Higher  Education  Project,  the 
Yerevan Solid Waste Project in Armenia, and the regional pro-
gramme  SME  Finance  Facility  II,  for  a  total  amount  of  around 
EUR 15.3 million. The support included investment grants, tech-
nical assistance, and an interest rate subsidy to support the EIB’s 
first synthetic loan in Ukrainian Hryvnia. This innovative struc-
ture employed in the SME Finance Facility II was only possible 
through NIF grant support, in the form of an interest rate sub-
sidy,  which  enabled  local  currency  lending  at  affordable  rates 
for beneficiary SMEs. 

In  2017,  the  EIB’s  projects  in  the  Eastern  Neighbour-
hood  benefited  from  NIF  and  E5P  financing  worth 
EUR 15.3 million.

16

EPTATF ANNUAL REPORT 201717

2017 EPTATF ANNUAL REPORTEPTATF results highlights 

Since  its  launch  in  2010,  the  EPTATF  has  continued  to 

actively  address  the  economic  challenges  in  the  East-
ern  Neighbouring  Countries,  playing  a  crucial  role  in 
funding  upstream  studies  and  technical  assistance  in 

support  of  project  preparation  and  implementation,  there-
by attracting key economic and financial stakeholders in the 
region.

•  Eighteen  technical  assistance  operations  targeting  project  preparation  and  implementation  of  the  priority 
projects proposed by the beneficiaries. This also included the consultancy operations for project acceleration and 
raising of cross-regional awareness.

•  Four operations supporting upstream studies in areas of high investment potential − energy efficiency, transport 
and SME support. Three regional studies were conducted in all cities of the Eastern Partnership (EaP) Countries 
and one was concentrated in Ukraine.

•  Two  operations  including  capacity-building  activities  through  internship  and  secondment  programmes.  The 
Bank  has  welcomed  11  secondees  and  26  trainees  to  participate  in  the  capacity-building  programme  financed 
by the EPTATF. While the internship programme targets young professionals, recent graduates and students, the 
secondment programme contributes to developing the institutional skills of officials from the Ministries, Central 
Banks and other public organisations across the Eastern Partnership Countries.

•  One  operation  supporting  the  budget  envelope  for  dissemination  activities  with  an  approved  amount  of 
EUR  150,000  in  order  to  reach  a  larger  regional  audience  through  the  organisation  of  relevant  side  events  or 
sessions  at  international  conferences  or  by  supporting  beneficiary  governments’  efforts  to  step  up  awareness 
beyond a technical audience.

The  EPTATF  has  helped  to  enhance  the  Bank’s  role  in  the 
Eastern Partnership Countries and has contributed to the 
Bank’s lending in the Eastern Neighbourhood.

Since  the  inception  of  the  Fund,  the  total  cost  of  projects 
benefiting from an EPTATF grant is EUR 8.8 billion. The Bank’s 
lending  share  is  EUR  4.2  billion,  supported  by  EUR  27.0  mil-
lion  of  EPTATF  grants.  Thus,  the  Donors’  funds  achieved  a  

18

EPTATF ANNUAL REPORT 2017significant leverage of 156x. Additional grants, dissemination  
activities,  secondment  and  internship  programmes,  not  di-
rectly linked to the Bank’s lending and therefore not forming 
part of the leverage, totalled EUR 3.5 million.

The  charts  below  show  the  beneficiary  countries  and  out-
line how the Trust Fund comprehensively covers the environ-
ment, energy, transport, water, agriculture, small businesses, 
municipal infrastructure and institutional activities. 

Operations by sector 

The water sector is still the largest recipient of EPTATF fund-
ing, followed by SMEs and municipal infrastructure. 

Sector distribution (share of amounts approved)

Sector distribution (share of operations approved)

Agriculture, 5%

Energy, 1%

Environment, 4%

Agriculture, 4%

Energy, 8%

Environment, 4%

Water, 27%

Institutional, 7%

Water, 20%

Institutional, 16%

Municipal
infrastructure, 
21%

Transport, 13%

Transport, 24%

SMEs, 22%

SMEs, 16%

Municipal
infrastructure, 
8%

220

1 640

19

220

1 640

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

Armenia

  Ukraine

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

10

10

2017 EPTATF ANNUAL REPORT 
 
Operations by country  

At  end-2017,  Ukraine  is  the  country  benefiting  the  most 
from  EPTATF  grants  with  seven  grant  operations  approved 
worth EUR 10 million accounting for 33% of the total amount.  
Regional  grants  rank  second  with  11  operations  worth 

EUR  8.9  million,  including  the  secondment,  internship  and 
dissemination  envelopes.  The  total  remaining  amount  of 
EUR 11.7 million is broken down as follows: Armenia EUR 4 mil-
lion, Georgia EUR 4 million and Moldova EUR 3.7 million.

Country distribution (share of amounts approved)

Country distribution (share of operations approved)

Armenia, 13%

Armenia, 16%

Ukraine, 33%

Ukraine, 28%

Georgia, 13%

Georgia, 8%

Moldova, 12%

Moldova, 12%

220

1 640

220

1 640

Regional, 29%

Regional, 36%

•  EPTATF has been very successful in deploying capital and 
almost all (87%) of paid-in funds have been approved and 
allocated to underlying operations. 

•  During 2017, an amount of EUR 6.2 million was approved, 
compared  to  an  approved  amount  of  EUR  5.3  million  in 
2016, i.e. an increase of 25%.

10

20

Yearly approved amounts (in EUR)

Yearly signed amounts (in EUR)

35,000,000

6,000,000
6000

18,000,000

16,000,000

Armenia

 Azerbaijan

Belarus

30,000,000

25,000,000

20,000,000

10

15,000,000

10,000,000

5,000,000
5000
Georgia

4,000,000
4000

3,000,000
3000

2,000,000
2000

5,000,000

1,000,000
1000

0

0
0

 Moldova

Armenia

  Ukraine

 Azerbaijan

Belarus

14,000,000

Georgia

 Moldova

  Ukraine

10

10

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

700
7,000,000

6,000,000
600

5,000,000
500

4,000,000
400

3,000,000
300

2,000,000
200

1,000,000
100

0
0

2011

2012

2013

2014

2015

2016

2017

2012

2013

2014

2015

2016

2017

Yearly approved amounts

Cumulative

Yearly signed amounts

Cumulative

220

1 640

220

1 640

•  Some delays were encountered in the signing of grant con-
tracts, which explains the low level of signed amounts reg-
istered  during  2017  (EUR  0.7  million),  compared  to  2016 

(EUR  5.7  million).  During  2018,  an  amount  of  EUR 6.8  mil-
lion (two contracts) is expected to be signed.

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

Armenia

  Ukraine

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

724

724

EPTATF ANNUAL REPORT 2017 
 
 
 
The EIB contracts related to EPTATF operations have been signed with consortium leaders from: 

•  Austria, Belgium, Denmark, France, Germany, Ireland, Italy, 

•  One  contract  with  an  international  organisation  (UN 

Latvia, Moldova, Switzerland and the UK.

family). 

Consortium partners are from:

•  Armenia,  Czech  Republic,  Denmark,  France,  Germany,  

Latvia and the UK.

21

2017 EPTATF ANNUAL REPORTEPTATF – Disbursement status of the signed grant operations

Yearly disbursements amounts (in EUR)

5,000,000
5000

4,000,000
4000

3,000,000
3000

2,000,000
2000

1,000,000
1000

0
0

10

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

2012

2013

2014

2015

2016

2017

Yearly disbursed amounts

Cumulative

•  As  at  end-2017,  out  of  the  EUR  30.5  million  amount  ap-
proved  by  the  Contributors  Committee  (25  operations), 
some  55%  (or  EUR  16.8  million)  had  already  been  signed, 
with 68% (or EUR 11.3 million) disbursed.

•  The  amount  of  disbursements  in  2017  is  lower  compared 
to 2016 (EUR 3.6  million and EUR 4.1 million respectively). 
However, in terms of number of disbursements, it is com-
parable to 2016 (14 disbursements in 2017 compared to 16 
in 2016).

Yearly disbursements per country (in EUR)

4,500,000
45000

4,000,000
40000

3,500,000
35000

3,000,000
30000

2,500,000
25000

2,000,000
20000

1,500,000
15000

1,000,000
10000

500,000
5000

0
0

10

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

724

2012

2013

2014

2015

2016

2017

Regional

Ukraine

Armenia

Moldova

Georgia

•  During 2018, the amount of disbursements is expected to 

reach more than EUR 6 million.

•  Ukraine remains the country with the highest level of dis-
bursements in 2017 (EUR 2.4 million), followed by Armenia 
(EUR 0.6 million) and regional grants (EUR 0.3 million). The 
level  of  disbursements  in  Moldova  decreased  sharply  be-
tween 2016 and 2017 (from EUR 1.2 million to EUR 0.1 mil-
lion respectively).

22

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

724

220

1 640

220

1 640

EPTATF ANNUAL REPORT 2017 
 
EPTATF – Status of the 25 approved grant operations

•  Out of the 25 approved grant operations, sixteen are ongoing, seven are completed and two grant operations are on hold*. 

25,000,000
25000

20,000,000
20000

15,000,000
15000

10,000,000
10000

500,000
5000

0
0

10

23,230,000

4,550,000

2,700,000

Ongoing

On hold*

Completed

*  "On hold" means that the TA is blocked because of deadlock situations linked to various factors.

EPTATF – Detailed status of the 25 approved grant operations

0
0

5000
5,000,000

10000
10,000,000

15000
15,000,000

20000
20,000,000

Procurement phase

8,824,000

220

1 640

10

Signed

1,576,000

Regional

Ukraine

Armenia

Moldova

Georgia

Under disbursement

15,530,000

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

Completed

4,550,000

724

•  Out of the sixteen ongoing grant operations, four are in the procurement phase, one is at the signature stage and thirteen 

grant operations are in the disbursement phase.

220

1 640

23

Regional

Ukraine

Armenia

Moldova

Georgia

Armenia

 Azerbaijan

Belarus

Georgia

 Moldova

  Ukraine

724

2017 EPTATF ANNUAL REPORT 
 
 
 
EPTATF in 2017

24

EPTATF ANNUAL REPORT 2017In 2017, the EPTATF continued to widen its activities. 

•   Two regional technical assistance operations were approved 

in 2017. 

•  Two requests for a budget increase were approved for TA op-

erations in Georgia and Armenia.

•  One request for a duration increase and change of scope was 

approved for a TA operation in Ukraine.

•  One contract in the water sector of Armenia was completed 

in 2017. 

•  In  2017,  the  fund  was  replenished  with  additional  paid-in 
contributions of EUR 4.3 million from Austria, Germany, Lith-
uania, Sweden and the UK.

The  EPTATF  Contributors  Committee  met  twice  last  year  to 
provide  an  update  on  EIB  lending  in  the  Eastern  Neighbour-
hood,  accept  new  financial  proposals,  approve  the  2016  
EPTATF Annual Report and financial statements and approve the 
amendment of the rules of procedure and establishment of the  
EPTATF. 

25

2017 EPTATF ANNUAL REPORTOperations approved 

The EPTATF Contributors Committee approved three new TA operations totalling EUR 6.18 million in 
2017    

EUR m

Duration increase 
(months)

Sector

Approval date

SMEs

SMEs

SMEs

SMEs

24/01/2017

24/01/2017

24/01/2017

10/03/2017

Water

11/07/2017

SMEs

11/07/2017

Institutional

11/07/2017

Operation

Agri-food APEX Loans for Georgia

Agri-food APEX Loans for Moldova

Agri-food APEX Loans for Ukraine

Enterprise Survey, Armenia - Azerbaijan - Georgia - 
Moldova - Ukraine 

0.86

1.03

3.51

0.30

Water Infrastructure Modernization Project (WIMP), 
Georgia

0.23 (extension)

APEX Loan, Armenia

0.25 (extension)

TA Consultant, Ukraine

TOTAL ELIGIBLE COSTS

-

 6.18

16

19

27

-

26

EPTATF ANNUAL REPORT 2017 
 
 
 
Agri-food APEX Loans  
for Georgia, Ukraine  
and Moldova

Countries: 
Grant amount: 
Total project cost: 

Georgia, Moldova, Ukraine
EUR 5.4 million
EUR 1,300 million

For decades the agri-food sector has been viewed as high 
risk by commercial lenders, who have shown limited under-
standing that agricultural cash flows are seasonal. This per-
ceived risk has caused high interest rates and prohibitively 
high  collateral  requirements,  short  loan  tenors  effectively 
cutting off access to finance for longer-term investments in 
mechanisation and better technology. Research shows that 
businesses,  particularly  small  and  medium-sized  business-
es, want to upgrade production, storage and logistics tech-
nologies and move closer to meeting the technical, sanitary 
and phytosanitary standards of the EU in order to compete 
within and beyond the EU’s borders.

Georgia, Moldova and Ukraine have a strong farming tradi-
tion  and  considerable  potential  for  agri-food  production. 
They  have  good  levels  of  rainfall  and  a  variety  of  climatic 
conditions that support varied and high-value production. 
Georgia was a regional leader in agri-food production dur-
ing  the  Soviet  period  and  has  strong  potential  to  develop 
its  horticulture,  nut  and  wine  production  on  national  and 

international  markets.  Moldova  has  a  strong  tradition  of 
fruit  production  and  processing  and  has  prioritised  table 
grapes,  walnuts,  apples  and  stone  fruits  as  products  that 
give the country a competitive advantage. Ukraine is a sig-
nificant international grain and vegetable oil exporter, with 
exports of grain reaching a record 33 million tonnes in the 
2013-14 season. It is the world’s third-largest grain exporter, 
and another record harvest was anticipated for 2016.

Although still lagging behind other sectors of the three na-
tional  economies,  the  countries  have  embarked  on  struc-
tural  reforms  in  agriculture  and  adopted  national  strate-
gies and action plans identifying strategic objectives, such 
as  increased  agri-food  sector  competitiveness,  value  chain 
development, infrastructure development, food safety and 
the environment. Agri-food sector development and mod-
ernisation is now recognised as key to improving the coun-
tries’ food security and making food available to vulnerable 
segments of the population. 

Since  2010  the  EIB  has  been  developing  and  refining  the 
Agri-food  Value  Chain  APEX  loan  model  in  Georgia,  Mol-
dova  and  Ukraine.  This  financial  structure  stimulates  the 
comprehensive  development  of  value  chains  identified  as 
having  the  potential  to  compete  on  national  and  regional 
markets.  An  APEX  loan  is  made  to  the  sovereign  govern-
ment, whose strategy for the development of the sector is 
a  key  element  in  this  process.  Strong  Donor  coordination 
with particular support from the EU in recent years has giv-
en  a  significant  impetus  to  the  development  and  imple-
mentation  of  national  agricultural  and  rural  development 
strategies  in  the  beneficiary  countries  and  has  framed  the 

27

2017 EPTATF ANNUAL REPORTdesign both of the EIB agri-food value chain loans and this 
technical assistance operation. 

Georgian economy. Agriculture remains important and still 
accounts for over 50% of employment.

In the first half of 2015, Agri-food Value Chain APEX projects 
were  preliminarily  agreed  with  Georgia  (EUR  100  million  
targeting  the  fruit,  vegetable,  nut  and  wine  value  chains) 
and  Ukraine  (EUR  400  million  targeting  the  cereal,  oilseed 
and  aquaculture/fisheries  value  chains).  The  finance  con-
tract  for  the  Ukraine  APEX  loan  was  signed  in  December 
2015  and  Georgia’s  was  signed  on  9  December  2016.  The 
Moldova  Fruit  Garden  project  started  in  2016,  while  the 
Ukrainian  parliament  ratified  the  Agri-Food  APEX  Loan  in 
September 2016. 

Technical  assistance  for  agricultural  value  chains  in  Geor-
gia, Moldova and Ukraine improves resource efficiency, re-
duces  losses  and  waste  along  the  value  chains,  enhances 
product safety and quality and improves product competi-
tiveness on national and international markets. The budget 
of EUR 10.9 million for TA activities in these three countries 
should have a significant impact on the implementation of 
EUR 620 million worth of agri-food projects to be financed 
from  the  loans.  The  budget  will  be  used  for  financing  the 
capacity-building  activities  of  central  authorities,  financial 
intermediaries and SMEs in the agri-food value chains. 

Georgian Agri-food Value Chains

Country: 
Grant amount: 
Total project cost: 

Georgia
EUR 860,000
EUR 200 million

Georgia  has  a  strong  tradition  and  capacity  in  agri-food 
production and benefits from good levels of rainfall and a 
wide variety of microclimates that support high value crop 
production.  It  nevertheless  has  low  agricultural  produc-
tivity,  underutilisation  of  agricultural  land  and  decreasing 
soil  fertility  and  the  sector  lags  behind  other  parts  of  the  

Georgia has considerable potential in agri-food production, 
with studies indicating that production could increase five-
fold  from  2013  levels.  Development  of  the  agri-food  sector 
could spur economic growth and offer other social benefits, 
particularly in rural areas. Agri-food sector development and 
modernisation  is  also  key  to  improving  the  country's  food 
security and the nutritional status of vulnerable people. 

The new strategy and implementing Action Plan identified 
seven strategic objectives, such as increased agri-food sec-
tor  competitiveness,  value  chain  development,  infrastruc-
ture development, food safety and the environment. Strong 
Donor coordination and support from the EU has given sig-
nificant impetus to the strategy and action plan.

Fruit Garden of Moldova

Country: 
Grant amount: 
Total project cost: 

Moldova
EUR 1.03 million
EUR 300 million

Being  located  near  the  Black  Sea  and  the  Danube  Delta, 
Moldova  is  an  attractive  location  for  high-value  produc-
tion sectors such as fruits and table grapes and the associ-
ated  production  of  processed  food.  The  country's  location 
has sustained a horticultural sector for many centuries and 
it  was  one  of  the  principal  suppliers  within  the  former  So-
viet Union. Twenty years ago Moldova used to supply con-
sumers  with  over  1  million  tonnes  of  fresh  fruit  and  1  mil-
lion tonnes of vegetables. Moldova’s independence in 1991 
was  followed  by  a  farm  restructuring  process,  a  decline  in 
subsidies,  rising  prices  for  inputs,  and  deteriorating  infra-
structure,  which  has  reduced  the  availability  of  irrigation 
and increased the time to get produce from farm to market. 
These factors led to a sharp drop in production and by 2013,  
production of high value added products was only a third 

28

EPTATF ANNUAL REPORT 2017storage capacity. Likewise, SMEs constitute a sizeable major-
ity of flour and feed mills, in turn supplying small and medi-
um-sized food manufacturers and the livestock sector. Such 
processors  are  constrained  by  the  inefficient  and  obsolete 
Soviet-era  technologies  still  employed,  which  result  in  re-
duced quality products and high levels of losses and waste. 

For decades the agri-food sector has been viewed as high 
risk  by  Ukrainian  commercial  lenders  confronted  with  its 
seasonal cash flows. This has resulted in high interest rates 
and  prohibitively  high  collateral  requirements,  effectively 
cutting off access to finance for longer-term investments in 
mechanisation  and  technology  upgrades.  Research  shows 
considerable demand, particularly among small and medi-
um-sized  players  in  the  cereal,  oilseed  and  fisheries/aqua-
culture  value  chains  to  upgrade  production,  storage  and 
logistics technologies and processes and move closer to EU 
technical, sanitary and phytosanitary standards in order to 
compete  within  and  beyond  the  DCFTA  agreement  estab-
lished with the EU in 2016.

Enterprise Survey

Countries: 

Sector: 
Scope: 
Grant amount: 
Total project cost: 

Beneficiary: 

Armenia, Azerbaijan, 
Georgia, Moldova, Ukraine
SMEs
Upstream study
EUR 300,000
No project 
identified at this stage
Ministry of Regional
Development

of 1985 levels. It also lost its privileged access to the former 
Soviet market.

Most  food  processors  operate  on  a  seasonal  basis,  and 
have  been  unable  to  maintain  a  constant  and  consistent 
supply  of  processed  products  to  external  markets.  At  the 
same  time,  the  international  market  has  changed  signifi-
cantly.  Consumers  have  become  more  demanding  and 
the  Moldovan  fruit  sector  has  been  slow  to  adapt.  This 
was due to its comfortable position in Russia for decades, 
which provided an artificial barrier to normal international 
market forces. There had been no incentive for local grow-
ers  and  processors  to  market  their  produce  or  strive  for 
quality  or  image.  All  they  needed  to  do  was  to  grow  and 
process  the  fruits,  and  the  centralised  market  would  ab-
sorb the goods.

The  EUR  120  million  Fruit  Garden  of  Moldova  loan  was 
signed  in  July  2014.  This  project  will  be  supported  by  TA 
components, focused on building the capacity of commer-
cial  banks  to  appraise  and  monitor  loans  to  the  agri-food 
sector and building the capacity of private sector investors 
to  develop  loan  applications  and  successfully  deliver  their 
investment projects.

Ukraine Agri-food Apex loan

Country: 
Grant amount: 
Total project cost: 

Ukraine
EUR 3.51 million
EUR 800 million

In Ukraine, post-independence trends in land use and access 
to  finance  in  the  sector  have  resulted  in  the  emergence  of 
a relatively small number of very large agricultural holdings, 
which benefit from access to international markets through 
their  control  of  storage  and  processing  capacity.  Produc-
tion is nevertheless characterised by large numbers of small 
and  medium-sized  producers,  which  could  add  value  to 
their produce by investing in small-scale sorting, drying and  

This TA will contribute to financing the EIB/European Bank 
for  Reconstruction  and  Development  (EBRD)/World  Bank 
(WB)  Enterprise  Surveys  for  the  EU  Eastern  and  Southern 
Neighbourhood  and  the  Western  Balkans.  In  total,  firm-
level surveys will cover 19,300 firms in 27 countries. EPTATF 
grants  will  provide  data  on  2,500  firms  in  five  countries  in 
the Eastern Partnership on a broad range of business envi-
ronment topics including access to finance, corruption, in-
frastructure,  crime,  competition,  and  performance  meas-
ures.  The  aim  is  to  collate  private  sector  information  in 
order to understand the key determinants of firms’ perfor-
mance  and  the  major  challenges  that  firms  face.  This  will 
help the formal private sector to become a powerful driver 
of job creation and rising living standards in the region.

29

2017 EPTATF ANNUAL REPORT 
 
 
Success stories

Moldova Flood Protection 

Road rehabilitation in Armenia  

The Republic of Moldova is prone to natural hazards, includ-
ing  drought,  floods,  severe  weather,  earthquakes  and  land-
slides. The Ministry of Environment of the Republic of Moldo-
va  requested  EIB  support  for  a  disaster/flood  risk  reduction 
master  plan.  In  2011,  the  EPTATF  approved  funding  to  con-
duct  the  study.  This  technical  assistance  (total  disbursed 
amount of EUR 1.9 million) was conducted from October 2013 
to  May  2016  and  identified  flood  risk  areas  in  Moldova  and 
measures to reduce that risk. The project has also strength-
ened  Moldova’s  capacity  to  prepare  flood  risk  assessment 
and management plans in line with EU directives.

The Technical Assistance operation developed a countrywide 
flood  management  Master  Plan  and  Phased  Investing  Pro-
gramme until 2036, in conjunction with a short-term Invest-
ment Plan covering the first seven years of the programme. 

The  project  will  improve  flood  protection  infrastructure  in 
Moldova  and  prevent  environmental  disasters,  preserving 
people's livelihoods (notably in farming). 

Armenia’s  location  and  political  circumstances  result  in  sig-
nificant  challenges  for  transport.  The  M6  interstate  road  is 
a major corridor for Armenia imports and exports, connect-
ing  the  country  to  the  Georgian  capital,  Tbilisi,  to  Georgia’s 
ports on the Black Sea, to Europe, Russia and other locations. 
The M6 needs urgent rehabilitation. Most of it is in poor con-
dition  and  doesn’t  comply  with  international  road  safety 
standards.  Armenia  asked  the  EIB  for  EPTATF  funds  to  pre-
pare the feasibility study, as a first step towards financing the 
rehabilitation.

On  17  December  2012,  the  EPTATF  Contributors  Commit-
tee approved a EUR 1 million EPTATF grant for the feasibility 
study, environmental and social impact assessment and a de-
tailed engineering design for the rehabilitation and improve-
ment of the M6 road (Vanadzor-Alaverdi-Georgian Border In-
terstate Road). 

The  consultant  identified  four  rehabilitation  solutions  with 
different costs, enabling the government to choose between 
various investments. 

The EPTATF assistance resulted in an investment project esti-
mated at EUR 102 million, financed by the EIB, the Asian De-
velopment Bank and the EU Neighbourhood Investment Fa-
cility. The EIB component of the project started in September 
2016 and is expected to be completed in 2020. 

30

EPTATF ANNUAL REPORT 2017Small business loans in Armenia  

Ukraine road safety1 

Armenia  has  a  large  and  growing  small  business  sector,  ac-
counting for the majority of registered firms in the country. It 
is critical that accessible and affordable financing is available 
for small and medium-sized enterprises. 

On  23  April  2015,  the  EPTATF  Contributors  Committee  ap-
proved  Technical  Assistance  worth  EUR  750,000  to  improve 
the accessibility of financial services for Armenian SMEs and 
support  the  implementation  of  EIB  financing  and  other  fi-
nancing for SMEs in the country.

The  objective  of  this  TA  operation  is  to  support  sustaina-
ble  lending  to  SMEs  in  the  agricultural  and  tourism  sectors, 
which will help the private sector, create jobs and improve in-
come in rural areas in Armenia. The TA was extended to focus 
on lessons learned and the successes related to the first loan 
project,  and  to  establish  improved  systems  and  procedures 
for a second loan.

Lviv’s roads saw 5 958 accidents, 47 fatalities and about a thou-
sand injuries in 2016. 

Pavlo  Syrvatka  heads  the  sustainable  transport  department 
of  Lvivavtodor,  a  municipally-owned  company.  He  knows 
that  less  congestion  means  fewer  accidents.  With  his  col-
leagues from the municipality, he worked hard on a plan to 
improve  traffic  safety  for  Lviv’s  citizens  by  channelling  traf-
fic on intersections and arterial roads to relieve bottlenecks. 
Other cities in Ukraine plan similar improvements in road de-
sign and reduced speed zones. All these road safety works 
cost EUR 177 million.

"If  you  can  pleasantly  –  and  safely  –  walk  or  cycle  a  kilometre, 
you may not want to take the car”, says Syrvatka.

1 http://www.eib.org/stories/ukraine-road-safety

Credit: Maxym Hnyp

31

2017 EPTATF ANNUAL REPORTThe European Investment Bank intends to 
back the plan with a EUR 75 million frame-
work loan. 

Such measures should reduce the number 
of road deaths and injuries in Lviv by 20%. 
Works will start in 2018 and finish in 2022.

“It  is  a  first-of-its-kind  project,  the  largest  in  road  safety  in  the 
Eastern countries,” says Henry Möykkynen, the EIB investment 
officer working on this operation, which is also covered by an 
EU guarantee.

“I have two kids, and like all parents, I am very concerned about 
their  safety  and  security.  I  don’t  want  to  lose  them  because  of 
dangerous streets” says Lilija Lysenko, a TV journalist and Chief 
Editor of the "Parents Channel"

In Lviv, Syrvatka’s company plans to:

•  build 120 km of cycle tracks and three cycling bridges over 

railway lines

•  rearrange circular crossings (e.g. roundabouts) and 42 acci-

dent-prone sites

•  install  20  new  traffic  lights  that  will  work  in  the  "green 
wave" mode, which means that a string of traffic lights turn 
green in sequence

•  install  electronic  displays  and  timetables  at  public  trans-

port stops

•  reduce transit traffic through residential areas and yards
•  introduce a small transport ring around the city centre
•  set up new pedestrian zones
•  enhance parking arrangements.

Local administra-
tions in Ukraine 
have limited 
knowledge of road 
safety investments 
and design consid-
erations. The EIB 
technical assis-
tance package will 
support them to 
ensure project 
quality and the use 
of international 
best practice in 
project prepara-
tion and imple-
mentation.

“We will help cities to intro-
duce  and  apply  new  road 
standards  as  well  as  man-
age  so-called  black  spots” 
says Möykkynen.

Credit: Alexander Shutyuk

32

EPTATF ANNUAL REPORT 2017As the severity of accidents directly depends on traffic speed 
limits,  special  focus  will  be  placed  on  raising  awareness 
among citizens. The aim is to avoid needless crashes, untold 
suffering and associated social and economic costs.

In this way, the EIB-backed project will also reduce the in-
direct costs associated with poor road safety and will posi-
tively affect the economic development of regions.

“This  is  in  line  with  the  country’s  transport  policy  and,  in  par-
ticular,  with  the  road  safety  strategy  in  Ukraine  up  to  2020,” 
says Maya Koshman, director of International Cooperation at 
Ukraine’s Ministry of Infrastructure. The Ministry is promoting 
investments in urban road safety and is acting as a coordina-
tor for the whole project.

Ukraine’s  neighbours,  Armenia,  Azerbaijan,  Belarus,  Geor-
gia and Moldova, have fatality rates three times the EU aver-
age. The EIB has invested EUR 2.5 billion in the region2 in the 
past 10 years to improve transport infrastructure.

The Bank applies EU principles on road safety and asks its cli-
ents outside the EU to follow these same approaches before 
and after the project is completed.

Ukraine Early Recovery3

The recovery project is a framework loan that is financing the 
repair of small-scale infrastructure that was damaged during 
the conflict that ravaged parts of eastern Ukraine in 2014. 

The  project  focuses  on  government-controlled  areas  of  the 
Donetsk and Luhansk regions, as well as the three surrounding  

areas of Kharkiv, Dnipropetrovsk and Zaporizhzhia. The pro-
gramme  will    improve  water  and  sanitation,  electricity,  dis-
trict  heating,  roads  and  railways,  bridges,  administrative 
buildings, schools, health centres and hospitals. The project 
will also help internally displaced people, addressing the in-
creased pressure on social infrastructure and sheltering. 

2 http://www.eib.org/projects/sectors/transport/index
3 video: https://www.youtube.com/watch?v=d7EaXg6YUw0

33

2017 EPTATF ANNUAL REPORTProject: UKRAINE EARLY RECOVERY – Ukraine

Environmental Impact 

When renovating public buildings and municipal infrastruc-
ture,  significant  energy  savings  come  from  the  new  insula-
tion  in  walls  and  roofs,  new  windows  and  other  efficiency 
measures. 

Social Impact 

The  repaired  roads,  bridges  and  tunnels  will  help  mobility 
and improve transport connections.

The project envisages to improve basic services and shelter 
for the affected communities. The improvements in housing 

will  not  completely  resolve  the  housing  shortage,  but  they 
will alleviate the most urgent needs. 

Social Assessment  

Large numbers of people have relocated to the regions im-
mediately surrounding the Donbas: Kharkiv, Dnipropetrovsk 
and Zaporizhzhe. This puts extra pressure on public services 
and infrastructure. 

The  project  is  improving  shelters,  including  via  energy  effi-
ciency and other upgrades, to help people cope with winter 
conditions. The project is providing equal access to all peo-
ple for housing and employment. It is also helping displaced 
people  settle  into  their  new  homes  while  protecting  their 
right to return to their old residences, in accordance with in-
ternational standards. 

34

EPTATF ANNUAL REPORT 201735

2017 EPTATF ANNUAL REPORTOperations completed in 2017

Water economy in Armenia 

Poor infrastructure causes high losses 

Two EIB loans 

After the transitional changes following Armenia’s independ-
ence  in  1991,  the  water  sector  suffered  from  reduced  fund-
ing and less maintenance. As a result, the water infrastructure 
degraded,  causing  substantial  water  losses,  reduced  supply 
and poor water quality. In 2002, the government created the 
State  Committee  of  Water  Economy  (SCWE)  to  restructure 
the  water  sector  and  adopted  a  new  Water  Code.  New  ob-
jectives for the water sector were defined, such as increasing 
the number of people with access to central water and sew-
erage systems, improving the quality of services and improv-
ing the management of water and wastewater companies by 
involving the private sector.

When  the  project  started,  there  were  five  water  companies 
handling  water  and  sewerage  infrastructure,  which  is  man-
aged by three private operators:

-  Yerevan Djur served one million people in the capital of Ar-

menia and 30 villages; 

-  Armenia  Water  and  Sewerage  Company 

served 
620,000 people in 36 urban areas and 268 rural communi-
ties across Armenia;

-  three regional utilities served 320,000 people in five towns 

and 66 villages west and north of Yerevan. 

There are also some 560 communities with about 650,000 in-
habitants  that  have  different  organisational  arrangements 
for their own water system management.

The  objective  of  this  Technical  Assistance  operation  was  to 
help  Armenia  reform  its  water  sector  to  ensure  water  and 
sanitation services nationwide for the general public.

This  Technical  Assistance  is  supporting  two  EIB  loans  in  the 
Armenian  water  sector:  The  Water  Sector  Communal  Infra-
structure  project  and  the  Yerevan  Water  Supply  Improve-
ment project. Armenia, in cooperation with IFIs, has initiated 
several technical assistance projects to design the “architec-
ture” of the water reforms. 

In particular:
-  the European Bank for Reconstruction and Development is 
using Fichtner of Germany as a transaction adviser and the 
KfW is using Ramboll of Denmark as a technical auditor to 
prepare a report for a lease contract. 

-  The EIB procured a TA to perform Assets Inventory (evalu-
ation/revaluation)  and  Registration,  required  for  the  pro-
curement of a PPP operator in 2016 as envisaged under the 
reform plans. The property rights for the water supply and 
sewerage  facilities  were  updated.  The  project  started  in 
January 2016 and the last disbursement was made in Feb-
ruary 2017.

Big improvements

The  TA  operation  led  to  many  improvements  in  the  water 
sector, including an increase in access to water and sanitation 
services.  Armenia  decided  to  further  restructure  the  sector 
using one operator under a public-private partnership lease 
agreement and one asset holder, the State Committee of Wa-
ter  Economy  (SCWE).  The  agreement  covered  water  supply 
and sanitation all over the country, including the capital, Ye-
revan.  The  Chairman  of  the  SCWE,  Arsen  Harutyunyan,  par-
ticipated in the EPTATF Contributors Committee meeting in 
Luxembourg  on  10  March  2017,  and  presented  the  findings 
and activities implemented with the EPTATF’s assistance.

36

EPTATF ANNUAL REPORT 2017implement the project. This was the first time they used an 
outside technical team to appraise the projects and propose 
cost-effective technical solutions to modernise their plans.

The TA programme prepared training programmes for more 
than  50  utility  managers  and  personnel  on  topics  of  strate-
gic long-term planning and project implementation and pro-
curement  management.  Other  training  participants  includ-
ed the staff from the Programme Management and Support 
Unit (PMSU) in the Ministry of Regional Development, which 
is  responsible  for  the  implementation  of  UMIP.  The  training 
materials  were  distributed  to  the  utilities’  personnel  as  well 
as  to  the  Ministry  of  Regional  Development,  Construction 
and Municipal Economy (MRD), which maintains a deposito-
ry of training programmes and materials for further use. The 
Ukrainian  counterparts  were  thankful  to  the  EPTATF  for  the 
TA delivered.

Improved heating in three cities in Ukraine 

A strong focus on efficiency

Even  though  energy  demand  in  Ukraine  is  decreasing,  the 
country  still  uses  20-30%  more  energy  on  average  than  Eu-
ropean Union countries. When an EIB grant was appraised in 
2013, Ukraine supplied only 53% of its own energy. The coun-
try  imported  75%  of  natural  gas,  85%  of  crude  oil  and  20% 
of  coal.  Ukraine  had  developed  an  energy  plan  that  puts  a 
strong  focus  on  efficiency,  especially  in  district  heating.  Its 
Energy  Strategy  by  2030  document  follows  EU  policies,  no-
tably  the  Europe  2020  strategy.  As  of  January  2015,  some 
74  Ukrainian  cities  had  signed  up  to  the  EU  Initiative  of  the 
Covenant of Mayors, committing to reduce CO2 emissions by 
20% by 2020 through the implementation of Sustainable En-
ergy Action Plans.

In  June  2013,  the  EPTATF  Contributors  Committee  ap-
proved a EUR 1.8 million grant to prepare pilot projects un-
der  the  EIB-financed  Ukraine  Municipal  Infrastructure  Pro-
gramme (UMIP). This programme covered investments of up 
to EUR 800 million in district heating, water, wastewater and 
solid waste across Ukraine. The Kryvorizka Teplomerezha util-
ity, the Oleksandriya utility Teplocomunenergo, and "Teplo-
energo”  Lozova  passed  the  screening  to  be  included  in  the 
programme.

Investing for the long term

The baseline study included a socio-economic assessment of 
population, industry and income in all three cities involved to 
provide a detailed view of the district heating operations re-
quired. The study also analysed the heat tariffs and subsidy 
policy  of  the  current  services.  A  strategic  long-term  invest-
ment plan was prepared to achieve sustainable and efficient 
district  heating  systems  for  domestic  and  commercial  pur-
poses. Plans for economically viable investments for 15 years 
were  established.  An  environmental  and  social  assessment 
was carried out to identify possible risks. A project financing 
plan was prepared for the cities. 

Many achievements 

The objective was to help Kryvyi Rih, Oleksandriya and Lozo-
va prepare key documents and swiftly proceed with the pro-
ject design and procurement for district heating. We focused 
on  the  baseline  assessment,  the  long-term  investment  plan 
and the financial assessment for all three cities. The TA pro-
vided  a  solid  foundation  to  implement  the  project.  The  cit-
ies did not have any experience of working with IFIs and were 
unfamiliar with the international procedures to prepare and 

37

2017 EPTATF ANNUAL REPORTContributors and financial status

In 2017, Germany and Austria renewed their contributions by 
pledging EUR 1 million and EUR 1.5 million, respectively, and 
an additional EUR 600,000 was pledged by Lithuania. By the 

end of 2017, total pledges amounted to EUR 39.2 million and 
total paid-in contributions reached EUR 34.9 million. 

Country

Total pledged 
contributions

Total paid-in 
contributions

Of which received  
in 2017

Austria

France

Germany

Latvia

Lithuania

Poland

Sweden

UK

12 500 000

12 500 000

1 500 000

800 000

800 000

3 817 000

3 817 000

1 000 000

100 000

850 000

100 000

850 000

1 000 000

1 000 000

13 389 350

13 390 347

700 000

6 771 000

2 484 809

1 112 890

TOTAL

39 227 350

34 941 157

4 312 890

Overview of the financial situation of the Fund 

Of which in 2017

Contributions

Paid-in

Committed

Signed

Disbursed

EUR 39.2 million

EUR 3.1 million

EUR 34.9 million 

EUR 4.3 million

EUR 30.5 million

EUR 6.2 million

EUR 16.8 million

EUR 0.7 million

EUR 11.3 million

EUR 3.6 million

Available funds 4

EUR   3.1 million

4 Available funds are calculated on the basis of paid-in contributions, taking fees into account.

38

EPTATF ANNUAL REPORT 2017Moving forward

EPTATF helps with the recovery 

Despite  budget  limitations,  political  uncertainties  and  government 
constraints,  early  recovery  did  emerge  in  2017  in  the  Eastern  neigh-
bouring countries. Belarus joined the EPTATF, backed by a growth rate 
estimated at 1.8% in 2017, and a first operation is expected to be sub-
mitted to the EPTATF Contributors Committee during the first half of 
2018.

During  2017,  the  Bank  increased  EPTATF  activities,  corresponding  to 
its lending targets. With a growing project pipeline, demand for EP-
TATF resources is increasing and, at the end of 2017, the Bank had al-
located almost all funds available in the EPTATF. To meet the increased 
demand, the Bank will continue to raise additional funds to cover pro-
ject  requirements  from  2018-2020.  A  total  of  almost  EUR  40  million 
will be sought to meet the existing pipeline needs.

The  EPTATF  has  proven  to  be  a  flexible  instrument  that  can  be  de-
ployed  rapidly  for  technical  advisory  support  since  inception.  The 
EPTATF will continue to provide well-targeted TA to identify, prepare 
and implement projects that will benefit from EIB lending, and to help 
build the capacity of the beneficiary countries and the institutions in-
volved. However, with a growing project pipeline, demand for EPTATF 
resources  is  increasing  and  the  Bank  anticipates  that  the  remaining 
funds will be fully allocated by the end of 2018 in the absence of new 
contributions.

The  EPTATF  will  continue  improving  people’s  lives  by  supporting 
transport,  energy  infrastructure,  supply  and  efficiency,  the  environ-
ment, and health and education. In 2018, the Trust Fund will focus on 
the acceleration of disbursements, follow-up of grant implementation 
and communication activities.

39

2017 EPTATF ANNUAL REPORTAnnexes

Annex I.  
Abridged financial statements

BALANCE SHEET
As at 31 December 2017 (in EUR ’000)

ASSETS

Cash and cash equivalents

Other assets

Total assets

LIABILITIES AND CONTRIBUTORS’ RESOURCES

LIABILITIES

Other liabilities

Amounts owed to third parties

Total liabilities

CONTRIBUTORS’ RESOURCES

Contributions

Retained earnings

Total contributors’ resources

Total liabilities and contributors’ resources

INCOME STATEMENT
For the year ended 31 December 2017 (in EUR ’000)

Projects financed

General administrative expenses

Other expenses

Total operating expenses

Net loss for the financial year

40

31.12.2017

31.12.2016

22 209

546

22 755

18

841

859

34 941

-13 045

21 896

22 755

21 650

555

22 205

18

1 738

1 756

30 628

-10 179

20 449

22 205

31.12.2017

31.12.2016

- 2 667

- 181

-18

- 2 866

- 2 866

-4 447

-138

-18

-4 603

-4 603

EPTATF ANNUAL REPORT 2017Annex II.
Table: EPTATF list of projects

No Country (ies)

Name of grant

Sector

Grant type

Ukraine

Mykolayiv Vodokanal Project

Water

Energy

TA (Project preparation/
implementation)
 Upstream study 

1

2

3
4

5

6

7

8
9

Armenia, Azerbaijan, 
Georgia, Moldova, Ukraine
Moldova
Regional

Ukraine

Ukraine

Moldova

Regional
Armenia

10

Regional

11

12

13
14

15

Armenia, Azerbaijan, 
Georgia, Moldova, Ukraine

Ukraine

Ukraine
Armenia

Georgia

16 Moldova

17

Ukraine

18

Ukraine

19

Armenia

20

Georgia

21

Armenia

22

Ukraine

Energy Efficiency Programme, ELENA East 

Flood Protection 
Eastern Partnership  Internship Programme, Phase I, 
Phase II, Phase III
Identification and preparation of railway 
infrastructure projects 
Dnipropetrovsk Metro Traffic Concept and Marketing 
Study

Technical Audits in Road Sector Programme

Budget Envelope for Dissemination
M6 border interstate road
Eastern Partnership Secondment Programme Phase I, 
Phase II
Private sector financing and the role of risk-bearing 
instruments 

Municipal Infrastructure Programme (UMIP)

Higher Education Energy Audits
Water Sector Assets Registration and Valuation

Municipal 
infrastructure
Energy
Water

Water Infrastructure Modernisation Project (WIMP)

Water

Preparation of Solid Waste Programme
Modernisation and safety improvements on road 
network

TA Consultant

APEX Loan

Kutaisi Wastewater Project

Armenia rural framework loan

Early recovery framework loan

23

Georgia, Armenia

Long term expert on transport sector in Georgia and 
Armenia 

24

Georgia, Ukraine, Moldova

Agri-food APEX Loans for Georgia, Ukraine, Moldova

24

Georgia, Ukraine, Moldova

Agri-food APEX Loans for Georgia, Ukraine, Moldova

24

Georgia, Ukraine, Moldova

Agri-food APEX Loans for Georgia, Ukraine, Moldova

25

Armenia, Azerbaijan, 
Georgia, Moldova, Ukraine

TOTAL EPTATF OPERATIONS 

Enterprise Survey

TA (Project preparation/
implementation)
TA (Project preparation)
TA (Project preparation)
TA (Project preparation/
implementation)
TA (Project preparation)

TA (Project preparation/
implementation)
TA (project 
implementation)
TA (project 
implementation)
TA (Project preparation/
implementation)
TA (Project preparation/
implementation)
TA (Project preparation/
implementation)
TA (Project 
implementation)
TA (Project 
implementation)
TA (Project 
implementation)

Environment 

Institutional

SMEs

Water

Agriculture

Municipal 
infrastructure

Transport

SMEs

SMEs

SMEs

SMEs

Net 
approved 
grant 
amount in 
EUR (incl. 
increases)
 1 400 000 

EUR

Status of 
grant

Approval 
date by 
EPTATF CC

Climate 
action 
contribu-
tion

11/04/2011

 1.400.000 

Ongoing

 200 000 

11/04/2011

 200.000 

Completed

Water
Institutional

TA (Project preparation)
Capacity building

 2 000 000 
 500 000 

14/11/2011
14/11/2011

 2.000.000 
 n/a 

Completed
Ongoing

Transport

 Upstream study 

 200 000 

25/05/2012

 200.000 

Completed

TA (Project 
implementation)
TA (Project 
implementation)
Dissemination activities
TA (Project preparation)

Transport

Transport

Institutional
Transport

Institutional

 200 000 

25/05/2012

 200.000 

Ongoing

 500 000 

25/05/2012

 150 000 
 1 000 000 

25/05/2012
17/12/2012

 -   

 n/a 
 -   

 n/a 

Ongoing

Ongoing
Completed

Ongoing

Capacity building

 1 100 000 

23/01/2013

SMEs

 Upstream study 

 200 000 

22/02/2013

 -   

Completed

Transport

TA (Project preparation)

 1 600 000 

17/11/2014

 3 300 000 

25/06/2013

 3.300.000 

Ongoing

 250 000 
 700 000 

12/03/2014
17/11/2014

 730 000 

17/11/2014

 250.000 
 -   

 250.000 

 1 200 000 

17/11/2014

 1.200.000 

Completed
Completed

Ongoing

On hold

Ongoing

Ongoing

Ongoing

 -   

 -   

 -   

 3 250 000 

24/04/2015

 3.250.000 

Ongoing

 500 000 

13/03/2015

 750 000 

24/04/2015

 1 500 000 

21/06/2016

 3 000 000 

21/06/2016

 550 000 

15/07/2016

 3 510 000 

24/01/2017

 864 000 

24/01/2017

 1 026 000 

24/01/2017

 -   

 -   

 -   

 -   

 -   

 -   

 -   

On hold

Ongoing

Ongoing

Ongoing

Ongoing

Ongoing

Ongoing

41

Upstream study

 300 000 

10/03/2017

30 480 000 

2017 EPTATF ANNUAL REPORT 
42

EPTATF ANNUAL REPORT 2017Information Desk
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Countries Department
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Director of Mandate  
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EPTATF
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ASSISTANCE TRUST FUND 
ANNUAL REPORT 

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