Chernobyl to benefit as Bank opens the way for continued high quality lending

After many months of considering how best to allocate the Bank’s 2007 net income, the Board of Directors this week paved the way for future years of high quality investments, creating the capacity to sustain the Bank's operations around last year's record volumes. Its key decisions on the use of the 2007 profits will particularly target the Bank's poorest countries of operations. And some of the profits will be donated to the containment of the Chernobyl nuclear power station which was devastated in the world's worst nuclear accident 22 years ago.

Against a backdrop of increasing global economic uncertainty, the Board agreed that 80 per cent of the Bank's €1.08 billion net income from 2007 should be allocated to reserves to provide the resources needed for continued future investments. The Bank now has the capacity to make investments of around €5.8 billion each year until 2011, when the next five-year strategy will be finalised.

This decision was at the centre of discussions about the most prudent and efficient use of the EBRD’s capital and how to divide the significant profits that the Bank accumulated last year.

The Bank will also bolster its investments by, for the first time, contributing its own technical cooperation funds to help prepare investment projects. The Board decided to create a Shareholder Special Fund with funding of €115 million that will complement the assistance of around €80 million a year that has traditionally been contributed by donor countries. Some 80 per cent of the new fund will be directed to countries that are eligible for Overseas Development Aid, with a special emphasis on ETC and Western Balkans nations.

With the remaining portion of the profits, the Board agreed to make a contribution to the safety and security of the people of the region and their environment. The remaining €135 million from the profits will be paid in the form of a grant to the Chernobyl plant, a key contribution to funding the New Safe Confinement being built to make the plant environmentally safe and also to the complex and costly process of cleaning up the nuclear waste from the 1986 accident. The EBRD's grant is seen as a catalyst that will give momentum to Chernobyl funding from G7 and EU donor countries.

The final decision on income allocation will be taken by the Board of Governors at the Annual Meeting in Kiev in May.