The European Bank of Reconstruction and Development (EBRD) has given an equity stake of up to 15 percent in the Ukrainian subsidiary of Polish company Barlinek to support its cross-border expansion, according to EBRD press-release.

The company is currently setting up production abilities in Ukraine with the help of EBRD loans it has received in recent years. The investment comes on top of these loans.

A new, recently commissioned plant in Vinnytsia, central Ukraine, with a production of 2 million square metres of floorboards will ease capacity constraints and allow for the company's further growth.

Barlinek is the leading Polish floorboard manufacturer with a strong market presence also in the Western Europe. With an EBRD loan of 39.9 million of Euro - half of which was syndicated - the company is already expanding its operations in Ukraine and Russia, where a construction boom has generated high demand for Barlinek's products.

In general ERBD's investment in Ukraine declined not significantly, about 10% over the previous year. Bank representative, Anton Usov, said the decline was "due to the fact that 2006 was such a remarkable year in which we exceeded our business plan; not to any slowdown in bank operations."

The EBRD is planned to begin 2008 with a flurry of project signings, valued at $450 million during the 1-st quarter alone. Highlights contain a $220 mln loan to the Rivne-Kyiv high power-line.

An EBRD representative stated that Ukraine has made "remarkable progress on the path toward establishing an enduring European-style democracy, yet significant difficulties remain". Specifically, Anton Usov reported, "Ukraine needs to improve the court system, increase transparency and clearity, rationalize land use law and, perhaps most important, a period of political sustained stability."

As a tribute to Ukraine's impressive economic development and political transformation the EBRD will hold its annual shareholders' meeting in Kyiv on 18-19 May 2008.