Draft European Bank for Reconstruction and Development (Further Payments to Capital Stock) Order 2024

Gareth Davies Excerpts

Tuesday 12th November 2024 General Committees

[Gareth Davies (Grantham and Bourne) (Con)]

It is a pleasure to serve under your chairmanship as always, Sir Roger.

It is worth remembering that the European Bank for Reconstruction and Development was founded in 1991 to support the transition to market-oriented economies in central and eastern Europe following the collapse of socialist and communist regimes. Since then, the bank has invested more than €200 billion in more than 7,000 projects across three continents.

As a founding member of the EBRD, the UK is a generous contributor to the bank’s work. It was one of the first donors to contribute to the bank’s Ukraine stabilisation and sustainable growth multi-donor account and, in October 2023, it signed a statement of intent with the bank to help UK companies do business in Ukraine. The draft order enables the Government to make a payment of €343.6 million to the EBRD for the purchase of additional capital stock. As the Minister rightly said, this follows a decision by the EBRD’s board of governors in December 2023 to increase the bank’s capital by €4 billion.

The Opposition fully support the Government’s decision to purchase additional stock in the EBRD. Alongside ensuring that the UK maintains its stake and voting power in the EBRD, the capital increase is vital to sustaining the ongoing work in Ukraine and ensuring the bank’s ability to meet the needs of other countries in its portfolio. However, given the size of the UK’s investment, it is right that the Opposition should seek clarity on three specific, simple points, which I hope will be straightforward for the Government.

First, can the Minister tell us whether other member countries of the EBRD are increasing, decreasing or maintaining their stock shares in the bank? Secondly, as she mentioned, the EBRD has green objectives, so is support for Ukraine subject to the EBRD’s target for at least half of its business volume to be green and does that allow for Ukraine’s most urgent funding needs to be prioritised? Finally, does she believe that this capital increase will be sufficient for the EBRD to fulfil its overall mandate, or should we expect further capital requests in the future? We support the draft order, but we would be grateful for clarification of those points.