The European Bank for Reconstruction and Development was established in 1991 and is owned by the western industrialized countries, including Canada, and the former communist countries of Europe and Central Asia. Its purpose is to assist the latter countries to make the transition from command to market economies in a democratic framework. The Bank, with an initial capital of approximately US$1.2 billion, directs 60 per cent of its resources towards private enterprises and state-owned enterprises which are being privatized. The remainder of the EBRD's lending is directed to governments for infrastructure development. The EBRD's lending, now at US$1.5 to 2 billion a year, is small in relation to the investment needs of its countries of operation. As a result, the Bank tries to maximize its leverage by limiting its share in total project financing to 35 per cent and encouraging co-financing by other lenders and investors. Through its lending it tries to create a demonstration effect and to encourage institutional reforms which increase private investment flows. In the energy sector, most of the EBRD's lending has been in the oil and gas sector in Russia, but it is open for business in other sectors and in all countries of operation. Unlike other development banks, the EBRD is prepared to finance nuclear power projects, especially for improving the safety and extending the operating life of nuclear power stations built before the fall of communism. In this connection, it operates a Nuclear Safety Account established by the G-7 countries after the 1992 Munich Summit. The Bank also is prepared to finance conventional power plants where these would permit the closure of obsolete or unsafe nuclear plants. In the oil and gas sector, most of the EBRD's lending has related to private sector, joint venture projects in Russia, aimed at oilfield rehabilitation and development. Three of the eight projects done so far have involved Canadian firms, reflecting their expertise in secondary and tertiary recovery, and cold weather operations. The private sector ventures supported by the Bank normally involve joint stock companies owned 50 per cent by western partners and 50 per cent by Russian state oil companies, which are being privatized or are operating according to private sector principles. The joint stock companies make up the difference between the EBRD's financing and total project cost through equity contributions in cash and kind, and through debt financing. The EBRD adds value not simply through its own financing. Its involvement in a project promotes co-financing by other investors. Its influence on behalf of foreign and local investors can help overcome administrative and regulatory difficulties affecting projects. Furthermore, the EBRD can give potential clients the benefit of its accumulated knowledge on how to structure the deal to meet host country priorities and regulations and to benefit from the greatest possible financing from the EBRD and from other lenders and investors.