TIRANA (Albania), March 16 (SeeNews) – The European Bank for Reconstruction and Development (EBRD) said it would provide a package of emergency measures of around 1 billion euro to help companies across its regions of operations, including Southeast Europe, deal with the impact of the coronavirus pandemic.
“The proposals were approved today by shareholders of the bank which invests to support the development especially of the private sector across 38 emerging economies,” the EBRD said in a press release late on Friday.
The bank said it will set up a resilience framework to provide financing for existing EBRD clients with strong business fundamentals experiencing temporary credit difficulties.
“The coronavirus pandemic and its economic consequences present an unprecedented challenge to the EBRD and its countries of operations,” EBRD president Suma Chakrabarti said.
According to the bank, the planned measures will include expansion of trade finance and provision of short-term finance of up to two years through financial institutions, specifically in support of small and medium-sized enterprises.
“The bank will seek to provide short-term working capital facilities of up to two years for other corporates and energy developers and balance sheet restructuring and short term liquidity support for municipal, energy and infrastructure clients,” the EBRD said.
The bank will assess the need to restructure existing loans, including the possibility of extending maturities and changing other conditions and use its ability to disburse in local currency, including the possible conversion of existing facilities into local currency.
“The response will put a premium on providing a rapid response to the needs of companies that are suffering from the effects of the coronavirus and the global economic turmoil that has ensued.”
The package of emergency measures comes as the EBRD is already pledging strong support generally for its existing countries of operations and follows a record level of investment of 10.1 billion euro ($11.4 billion) in 2019, the bank noted.
“The EBRD’s economists are expecting economic output to be affected right across its regions of operations, with growth seen slowing especially in Central Asia and also in Eastern Europe and the Caucasus, Russia and Southeastern Europe,” the lender said.
According to the EBRD, the countries that will be most affected by the virus are countries that are highly integrated into global supply chains, and in particular have direct dependencies on China and Europe. The tourism sector is likely to be affected in many of the EBRD countries of operation.
“The recent slump in oil prices will have also an impact on oil producing countries in the EBRD regions and the flow of remittances from workers back to their home countries is also expected to slow.”
($ = 0.89940 euro)