DOCUMENT OF THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT
MINUTES OF THE BOARD MEETING OF 26/27 JULY 2011
Meeting of the Board of Directors – 26/27 July 2011 List of Attendance Chairman First Vice President Secretary General General Counsel
President Varel Freeman Enzo Quattrociocche Emmanuel Maurice
Directors Memduh Akçay Kurt Bayer Giorgio Leccesi Ole Blöndal João Cravinho Alain de Cointet Krystyna Gawlikowska-Hueckel Werner Gruber Thomas Hackett Etsuro Honda James Hudson Suzanne Hurtubise
Alternate Directors Virginia Gheorghiu Gianluca Grandi Eoin Ryan Stefanos Vavalidis Stefka Slavova Artem Shevalev Dominique de Crayencour Tatsuhiko Kasai Ole Hovland Peter Basch In-chang Song
Vassili Lelakis Bob McMullen Pedro Moriyón Denis Morozov Jonathan Ockenden Joachim Schwarzer Jean-Louis Six Eva Srejber Pavel Štěpánek Paul Vlaanderen
Herbert Junk Miguel Marques Kalle Killar László Urbán Jan Maas
Secretariat Nigel Carter Colm Lincoln
Nikola Milushev Paul Martin
Staff Manfred Schepers Horst Reichenbach Jan Fischer Erik Berglöf Alain Pilloux Nick Tesseyman Alistair Clark Joe Eichenberger Chris Holyoak Alan Rousso Josué Tanaka
Hans Peter Lankes Noel Edison Lyuba Tarnopols Galina Kuzmenko Mike Taylor Sabina Dziurman Jean-Patrick Marquet Ekaterina Miroshni Sue Barrett Sylvia Gansser-Potts Frederic Lucenet Anna Tokarz Lesya Kuzmenko Kevin Bortz Michaela Bergman Hildegard Gacek Ian Brown
1.
Opening of the Meeting and Adoption of the Agenda
Subject to some modifications as to the order in which items were to be discussed, the agenda was approved.
The Secretary General reported that the following items had been approved on a no-objection basis: -
On 20 July, an operation change to Romania, Urban Road Management and Rehabilitation Framework had been approved in order to clarify the approval mechanism for sub-projects under the Framework and to amend erroneous text in Section 1.5.
-
On 20 July, an increase by EUR 0.94 million in the amount of the loan to the Sofia Municipality, as part of the Sofia Public Transport Sector Reform Project, had been approved. The loan increase will be used as the contribution of the Municipality to the EU funded Sofia Integrated Urban Transport Project. The operation required an exception from the use of the Bank’s Procurement Policies and Rules for the loan increase with Sofia Municipality as envisaged under its Clause 2.4 for projects co-financed with EU Cohesion/Structural Funds.
-
On 20 July, TC funding from the Shareholder Special Fund had been approved for Kazakhstan Water PPP Framework – Feasibility Studies for water projects in four cities. EUR 650,000
-
On 21 July, the Board had approved an exception under Section 2.4 of EBRD Procurement Policies and Rules, for the application of the World Bank’s procurement policies for selecting a consultant for the non-Russian component of the BEEPS V project, and the transfer to the World Bank of a contribution of US$1,023,800 which has been allocated from the Shareholder Special Fund. The Report by the Chairman of the Financial and Operations Policies Committee had also been approved on the same date.
-
On 26 July, a material change in the implementation of Ukraine: Kronospan UA – MDF Plant had been approved. It is intended that, in close cooperation with the B lenders, the maturity of the loan should be extended by not more than two years, together with an extension in the guarantee. This will allow the project to better match debt service with the lower plant cashflow which now does not include revenues derived from the proposed MDF production.
-
On 26 July, the Board had approved an operation change to Kronospan UA – MDF Plant in Ukraine, which had failed to meet project completion by the end of March 2011 and was now in default. Subject to a restructuring satisfactory to the Bank and the B lenders, it was agreed to extend the maturity of the loan by not more than two years, together with an extension of the guarantee. This will allow the project to better match debt service with the lower plant cashflow which now does not include revenues derived from the proposed MDF production.
2.
Minutes of the Board Meeting of 12 July 2011
The Board approved the minutes of 12 July 2011.
3.
Treasury and Treasury Risk Management Authority and Report by the Chair of the Financial and Operations Policies Committee
The Board approved the Treasury and Treasury Risk Management Authority.
4.
2011 Supplementary Budget - Report by the Chair of the Budget and Administrative Affairs Committee
The Board approved a 2011 supplementary operating budget of GBP 1.7 million (EUR 2.2 million).
5.
Interpretation of the Agreement Establishing the Bank to allow the use of cooperation funds in member countries of Southern and Eastern Mediterranean - Report by the Chair of the Budget and Administrative Affairs Committee
The Board approved the proposals set out in Section B, C and D of the Interpretation of the Agreement Establishing the Bank to allow the use of cooperation funds in member countries of Southern and Eastern Mediterranean. It further approved the submission of the Interpretative Decision for confirmation by the Board of Governors at the same time as the Resolutions relating to the amendments to Articles 1 and 18 of the Agreement Establishing the Bank.
6.
Draft Report of the Board of Directors to the Board of Governors: Membership of Tunisia - Report by the Chair of the Financial and Operations Policies Committee
The Board approved the Draft Report of the Board of Directors to the Board of Governors: Membership of Tunisia for transmittal to the Board of Governors, together with the Draft Resolution of the Board of Governors.
7.
Draft Report of the Board of Directors to the Board of Governors: Geographic Expansion of the Bank’s Region of Operations to the Southern and Eastern Mediterranean - Report by the Chair of the Financial and Operations Policies Committee- Report by the Chair of the Budget and Administrative Affairs Committee
The Board approved the Draft Report of the Board of Directors to the Board of Governors: Geographic Expansion of the Bank’s Region of Operations to the Southern and Eastern Mediterranean for transmittal to the Board of Governors, together with the Draft Resolutions of the Board of Governors.
8.
Draft Report of the Board of Directors to the Board of Governors: Net Income Reallocation - Additional Allocation to Chernobyl Projects - Report by the Chair of the Financial and Operations Policies Committee
The Board approved the Draft Report of the Board of Directors to the Board of Governors: Net Income Reallocation - Additional Allocation to Chernobyl Projects for transmittal to the Board of Governors, together with the Draft Resolution of the Board of Governors.
9.
Public Information Policy - Report on the Invitation to the Public to Comment - Report by the Chair of the Financial and Operations Policies Committee
The Board approved the revised Public Information Policy. Changes and revisions to the Policy would be effective as of 1 November 2011.
10.
Request for derogation from the Offshore Jurisdictions Policy
The Board approved derogations, on an exceptional basis, to the application of the provisions of sections 2(d) and 4 of the Offshore Jurisdictions Policy in respect of (i) the Russia Federation: Aura Centre Surgut project approved by the Board of Directors on 12 July 2011, and (ii) projects involving Turkish
sponsors investing in countries of operations other than Turkey which had been approved, either by the Board of Directors or under delegated authority procedures, and which had not yet been signed but where signature was considered necessary by management in the interests of the Bank.
11.
Russia: NPF European Pension Fund
The Board approved an equity investment of up to RUB 665 million (EUR 16.5 million equivalent) in NPF European Pension Fund. The equity investment will assist the Fund to implement its business plan, develop its pension and asset management businesses and improve access to private pension products for the Russian population.
12.
Russian Federation: Carcade Leasing Rouble Senior Loan
The Board approved a loan of RUB 600 million (EUR 15 million) to Carcade LLC. The loan will be used by the company to provide financial leases for vehicles used by regional private SMEs in the Russian Federation.
13.
Georgia: Georgian Agricultural Finance Facility
The Board approved a Georgian Agricultural Finance Facility of up to EUR 40 million to provide senior loans to financial intermediaries in Georgia for on-lending to farmers and other agricultural entities. The Facility will increase financial intermediation and financing for primary and secondary agricultural businesses, supporting the regeneration of Georgia’s agricultural sector.
Loans to three Georgian participating banks were also approved: (i) a loan of up to EUR 10 million equivalent in GEL to Bank of Georgia, to be provided in one tranche; (ii) a loan of up to EUR 10 million equivalent in GEL in two equal tranches to TBC Bank; and (iii) a loan of up to EUR 10 million equivalent in GEL in two equal tranches to ProCredit Bank.
14.
Turkey: Private Sector Sustainable Energy Financing Facility (TurSEFF) – Isbank
The Board approved an increase in the framework amount for the Turkey Private Sector Sustainable Energy Financing Facility (TurSEFF) and approved a loan of USD 39.96 million (EUR 27.5 million) to Turkiye Is Bankasi (Isbank) under TurSEFF. The loan will enable Isbank to on-lend the funds to the private sector (SMEs and households) in Turkey for investments in energy efficiency and renewable energy.
15.
Turkey: Istanbul Ferries Privatisation
The Board approved two loans to TASS totalling up to USD 150 million (EUR 104 million) comprising: a long-term senior loan of up to USD 100 million (EUR 69.4 million) and a medium-term junior loan of up to USD 50 million (EUR 34.7 million equivalent). The loans will be used to finance the acquisition of Istanbul Deniz Otobusleri Sanayi ve Ticaret AS. The Board also approved a potential interest and currency hedge, the loan equivalent amount of which would be up to EUR 30 million.
16.
Ukraine - Interleaseinvest
The Board approved an A/B Loan of up to USD 150 million (EUR 105 million) to Interleaseinvest LLC, a provider of rail transportation and operating lease services in Ukraine, to acquire up to 2,500 freight wagons. The loan will be provided in two tranches. Tranche I, of up to USD 90 million (EUR 63 million) will be committed on signing, with up to USD 45 million (EUR 31.5 million) for Bank’s own account. Tranche II, of up to USD 60 million (EUR 42 million), of which USD 30 million (EUR 21 million) will be for the Bank’s own account, will be provided at the Bank’s sole discretion, should the IFC decide not to participate in the project.
17.
FYR Macedonia: Skopje City Mall
The Board approved a subordinated loan of up to EUR 22 million to a special purpose company to be incorporated in the Netherlands, which will own the operating company Balfin MK d.o.o. The Bank funding will be used to finance the development and construction of a modern retail centre in Skopje, FYR Macedonia.
18.
Russian Federation: Kronospan OSB Plant
The Board approved a syndicated A/B loan of EUR 120 million to OOO Kronospan. The loan will be used to part-finance new investment into the OSB line and to refinance the existing exposure with the Bank.
19.
Belarus: Kronospan Particleboard/MFC
The Board approved a senior loan of up to EUR 50 million to Kronospan FLLC to finance the construction of a particleboard and melamine faced particleboard plant in Belarus.
20.
Ukraine: Astarta IV
The Board approved a loan of up to USD 60 million (EUR 46.1 million) to Astarta-Kyiv LLC. The loan will be used to restructure three existing loans from the Bank and to support the expansion of the company’s dairy farm,
increase of the company’s land bank under farming operations, acquisition of agricultural machinery as well as modernisation of agricultural and sugar infrastructure in Ukraine.
21.
Serbia: Danube
The Board approved a senior loan of up to EUR 35 million to Nectar d.o.o., a limited liability company from Serbia. The operation will enable Nectar to acquire Fructal and integrate the operations, providing it with the possibility to become one of the leading juice producers in the Western Balkans.
22.
Poland: Polkomtel Privatisation
The Board approved a quasi equity investment in Metelem Holding Co of up to the Polish Zloty equivalent of EUR 200 million. The funding will enable acquisition of 100% of Polkomtel, one of Poland’s three major mobile telephone operators, to improve governance, increase management efficiency, and accelerate the roll-out of 4G mobile broadband services.
23.
Serbia: EPS Kolubara Environmental Improvement Project
The Board approved a loan of up to EUR 80 million to JP Elektroprivreda Srbije Beograd. The loan proceeds will fund the purchase of a coal quality management system and associated mining equipment in the Kolubara mining basin.
24.
Other business
The Board approved the appointment of Chairs, Vice Chairs and Members of Board Committees for a term of one year starting in September 2011.
