On Friday, April 17, 2015 the Lugar Diplomacy Institute at the German Marshall Fund of the United States (GMF) convened a luncheon with Chief Operating Officer of the European Bank for Reconstruction and Development (EBRD), Philip Bennett. The event was attended by congressional staff from the Senate Foreign Relations Committee, Finance Committee, Intelligence Committee and House Ways and Means Committee, as well as representatives from various congressional offices. The luncheon was a wonderful opportunity for congressional staff to become better acquainted with the EBRD, in which the United States, as the largest stakeholder, claims a 10% ownership share.
The discussion, moderated by former Congressman and current Senior Transatlantic Fellow at GMF, Glenn Nye, focused on the challenges and opportunities facing the EBRD in Ukraine. Russia and Ukraine account for the first and second largest investment portfolios for the EBRD, and the current crisis is starting to have an effect on investments in Ukraine. While the investments in the eastern Donbas region are still performing, they will start to falter as Ukrainian entities can no longer pay into investments in rebel held territory. Ukraine has made progress combatting corruption and now has institutions in place, such as an independent external anti-corruption Ombudsman, to further that progress, but the country still has vested corruption interests that need to be addressed.
Inevitably the conversation shifted to the topic of energy in Ukraine, a sector where there is a wealth of opportunity for investment and progress. Energy accounts for a large percentage of the investments made by EBRD in Ukraine, and opportunities remain to address the large efficiency and waste problem facing the Ukrainians. If Ukraine were to use their energy the way that Germany does, they would not need to import any natural gas.
The conversation came to a conclusion with the suggestion that until there is a military solution there will not be a viable financial solution available in Ukraine, because the market will not trust the situation if the security question has not been properly addressed.