OREANDA-NEWS. In the second half of September 2007, the Board of Directors of the European Bank for Reconstruction and Development approved new mid-term strategy for Ukraine. The strategy is designed to assist Ukraine in meeting key transition challenges, in particular, diversification of the production base and overall improvement of the country's competitiveness, development of local capital markets, continuation of energy sector reform and strengthening corporate governance and transparency.

According to the Bank press service, the EBRD, a major financial investor in the country, having already invested over euro 3 billion through 140 projects, can play an important role in helping Ukraine to achieve the above objectives. In the light of these challenges, the Bank selected key operational priorities for the next strategy period:

Energy efficiency: the Bank will promote energy efficiency and security, environmental protection and sustainable use of natural resources throughout all sectors of the economy. It will reinforce its energy efficiency initiatives in all sectors of the economy: both through direct lending in the corporate, power and infrastructure sectors and through an expansion of lending within the framework of the industrial energy efficiency credit lines via local banks.

Financial sector: the EBRD will promote the development of the domestic capital markets and provide continued support to micro, small and medium-sized private enterprises through long-term credit lines with partner banks. The Bank will seek to develop local currency financing instruments, based on the approach used already in other countries of operation as a means to encourage local currency borrowing by corporates and consumers.

Infrastructure: The Bank will support the improvement of Ukraine's transport and communications infrastructure which is crucial to the country's competitiveness and its integration into European transport networks and the world economy. The focus will be on the development of the Transport Corridor Europe - Caucasus - Asia and the other main transport corridors in Ukraine and their interconnections to the Trans-European Transport Networks.

Municipal sector: the Bank will focus on financing energy efficiency in district heating, water/wastewater, solid waste and public transport investments in large and medium-sized cities. In the preparation of municipal projects, the Bank will promote institutional reforms and corporatisation of municipal utilities, financial and operational performance improvements and full cost recovery through tariffs, taking into account affordability constraints.

Power and energy: the EBRD will assist Ukraine in meeting the key challenges of improving energy efficiency and security and ensuring the reliability of the energy transit systems for the benefit of the main energy exporters and consumers in Europe. In particular, the Bank will assist the modernisation and rehabilitation of the main trans-European energy networks of Ukraine. It will invest in modern and energy efficient generation, transport and distribution of energy. The European Bank will also support the diversification of supply sources and promote alternative fuels.

Corporate governance: the Bank will promote higher efficiency, competitiveness and corporate governance standards in the local private sector and assist foreign direct investments.