The Role of Creditors as StakeholdersThe Role of Creditors as StakeholdersDr. J.P. MéanDr. J.P. Méan

Third South Eastern Europe Corporate Governance Third South Eastern Europe Corporate Governance

RoundtableRoundtable - Z - Zagreb, 21-22 November 2002agreb, 21-22 November 2002

What is the EBRD?What is the EBRD?

IFI, founded 1991, 62 shareholders

Operations : 27 countries East Europe, former USSR

Committed €19.6 bn for 850 projects

Capital base €20 billion

0

5

10

15

20

95 96 97 98 99 00 01 02Cumulative commitments

€19.6 billion

Unaudited June 2002

0

2

4

6

8

10

12

14

16

18

20

Project portfolioProject portfolio€ billion

Private sector

State sector

17.3

6.0

14.0

5.6

10.5

3.2

936 approved projects

850 signed projects

Disbursements

Unaudited June 2002

Attracting third party financing Attracting third party financing triples EBRD’s investmenttriples EBRD’s investment

Resources mobilised€44.4 billion

EBRD financing €19.6 billion

Total project value €64.0 billion

Unaudited June 2002

EBRD commitments by facility typeEBRD commitments by facility type

State loans 36%

Equity 18%

Guarantees, etc 2%

Private loans 44%

Unaudited June 2002

What are the EBRD’s objectives?What are the EBRD’s objectives?

Transition to free markets

A better investment climate

Good corporate governance

Environmentally sustainable development

OECD PrinciplesOECD Principles

Respect of rights protected by law

Effective redress

Performance-enhancing mechanism, esp.

insolvency

Access to information

Integrity due diligenceIntegrity due diligence

Criminal activities

Dealings with government

Corporate affairs - Good governance

Corporate governanceCorporate governance

Articles of Association

Transparent shareholding structure

Minority protection

Shareholders’ registry

Shareholders’ relations and information

Division of authority

Covenants (1)Covenants (1)

Accounting principles and auditors

IAS

Auditors acceptable to Bank

Direct communication with auditors

Covenants (2)Covenants (2)

Information

Quarterly statements

Project progress reports

Details of contractors

Transactions with affiliates and shareholders

Covenants (3)Covenants (3)

Information (cont’d)

Annual statements

Report on environmental, health and safety

Communications with shareholders

Right to visit the project

Good governance is good practiceGood governance is good practice

Many losses due to governance issues

Too big to fail ?

The post Enron auditor

The Role of Creditors as StakeholdersThe Role of Creditors as StakeholdersDr. J.P. MéanDr. J.P. Méan

Third South Eastern Europe Corporate Governance Third South Eastern Europe Corporate Governance

RoundtableRoundtable - Z - Zagreb, 21-22 November 2002agreb, 21-22 November 2002