European Bank for Reconstruction and Development

The European Bank for Reconstruction and Development, shortened to EBRD (French: Banque européenne pour la reconstruction et le développement or BERD), is an international financial institution founded in 1991 in Paris. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build market economies.

Initially focused on the countries of the former Eastern Bloc, it expanded to support development in more than 30 countries from Central Europe to Central Asia. Similar to other multilateral development banks, the EBRD has members from all over the world (North America, Africa, Asia and Australia, see below), with the biggest single shareholder being the United States, but only lends regionally in its countries of operations. Headquartered in London, the EBRD is owned by 77 countries and two European Union institutions, the newest shareholder being Nigeria since February 2025. Despite its public sector shareholders, it invests in private enterprises, together with commercial partners.

The EBRD is not to be confused with the European Investment Bank (EIB), which is owned by EU member states and is used to support EU policy. EBRD is also distinct from the Council of Europe Development Bank (CEB).

Located in London, the EBRD was intended at its beginning to focus on the switch from centrally planned economy to market based economy in the Central and Eastern European countries by investing in the private sector, mainly banks, industries and businesses, and by promoting policies that would favor them. It was created as a result of the end of the Cold War because of particular issues regarding the international system in place, the historical and political context at the time. Furthermore, its recipient countries had to ensure that they would work towards "multi-party democracy and political pluralism" in which was considered as one of the main particularity of the EBRD distinguishing the latter from other financial institutions. Firstly, notably advocated by European political actors such as the French President Mitterrand in 1989, the idea of creating this financial institution involving the European countries started before the fall of the Berlin Wall. The reception of this proposition was mitigated depending on the country, for instance it received hostility from the British whereas the French were important proponents of the project and influenced the process. In January 1990, negotiations about the EBRD objectives, its lending policy regarding the public and private sectors, started and involved all the EU countries at the time, as well as various other European countries, non-European countries and representatives from the EU and the European Investment Bank. The Soviet Union was represented by its own delegation in the process and thus participated in the negotiations as well as the USA. Later on, because of dissensions on the political and economic objectives of the institution, the inclusion of the Soviet Union was threatened. Considered as short negotiations, the agreement (for reasons relating to the situation in Eastern Europe and to a wave of privatization across Europe) leading to its creation was signed on 29 May 1990 by actors such as 40 states as well as two European organizations and by March 1991 took its first effects as the bank was inaugurated. The creation of the EBRD has led to the financing of various projects in the years following its first operations, for instance there were twenty projects in 1992 in which the EBRD provided financing worth ECU 2.1 billion.

Divided between its headquarters located in London, and field offices located elsewhere, the European Bank for reconstruction and development is made of a three-tier structure composed of firstly, the president and the staff, secondly the Board of Governors and finally the Board of Directors. The bank’s structure has changed over time, because of concerns about competition within the institution. In fact, in the beginning of the 90s, there were two different banking divisions (on one side, the merchant banking related to the private sector and on the other side the development banking side working mostly with the public sector). Consequently, the two divisions came to be merged into a single one, substituting this structure with another one instead dividing the bank with seven policy and country regional sub-divisions.

Representatives from each member state compose this board, they have authority power. Currently (2024-2025) Slovenia is the Chair of Board of Governors, while Iceland and Turkey are the Vice Chairs.

The Board of Directors consists of 23 members elected by the Board of Governors. These members can not be on the Board of Governors. Its function is to direct the general operations of the bank, notably:

The EBRD is composed of many members with voting powers, from European and non-European states to the membership of other institutions such as the European Investment Bank, however depending on the geographical location of each member, voting rights differ. More precisely, European and other creditor members hold a majority voting power. At its beginning, the EBRD was owned by more than 40 members, in 2015 the number of countries owning it was 61. and as of March 2022, there were 71 countries as owners.