European Bank for Reconstruction and Development (EBRD) - A Brief Overview

EBRD is an International Financial Institution formed with the objective of assisting Eastern Bloc European Countries. This article shares details about the origin of EBRD, its initial mandate, gradual expansion in roles roles and membership. This article also gives details of the advantages in joining EBRD.

EBRD is a topic in International Organisations and part of the international relations syllabus of the IAS Exam.

European Bank for Reconstruction and Development (EBRD) – Introduction

Founded in 1991, The European Bank for Reconstruction and Development (EBRD) is an international financial institution. It was founded to support countries of the former Eastern Bloc in the process of establishing their private sectors. EBRD, as a multilateral development investment bank,  uses investment as a tool in building market economies. EBRD is owned by the European Union (EU), European Investment Bank (EIB) and 65 other countries.

Its initial focus was on the countries of the former Eastern Bloc. Gradually, it expanded to support more than 30 countries from central Europe to central Asia in their development.The biggest shareholders of EBRD are from the United States. The member countries of EBRD are distributed over five continents besides Europe. They are Australia, Africa, Asia, North America.

The mandate of the EBRD works only in those countries that are committed to democratic principles. It does not finance stand-alone gambling facilities, substances banned by international law, selected alcoholic products, defence-related activities and the tobacco industry.

Advantages of Membership with EBRD – India

  1. A membership with EBRD would promote India’s economic interests and help India in enhancing its international profile.
  2. It shall give India, access to EBRD’s sector knowledge and Countries of Operation.
  3. There would be a significant boost in India’s investment opportunities.
  4. There would be an increase in the scope of cooperation between EBRD and India through co-financing opportunities in Energy, Information Technology, services, manufacturing etc.
  5. The membership would help India leverage the sectoral knowledge and technical assistance and of the bank for the benefit of development of private sector as EBRD’s core operations are related to private sector development in the countries of its operation.
  6. The investment climate in the country would improve with the membership.
  7. There would be enhanced competitive strength for the Indian firms.
  8. It would provide an enhanced access to international markets in terms of consultancy assignments, procurement activities and such opportunities.
  9. New arenas would open up for Indian professionals.
  10. It would give a fillip to Indian exports.
  11. There is a huge employment generation potential due to increased economic activities.


The above details would help candidates prepare for UPSC 2020.

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