LONDON The European Bank for Reconstruction and Development (EBRD) has taken the first step to enable a 4-billion-euro capital increase that would allow it to double its annual investment in Ukraine, it said in a statement on Wednesday.

The EBRD, which already deployed 3 billion euros to Ukraine for 2022-2023, said its board of directors had recommended that the bank's governors approve the capital increase "to enable it to provide significant and sustained investment for Ukraine, now and in the future".

"Today's decision is in line with the governors' recognition that support for Ukraine should be the Bank's highest priority, now and in the future, following Russia's full-scale invasion of the country," it said in a statement.

The endorsement is the first step in the formal process to allow it to boost annual Ukraine funding to 3 billion euro. If approved, the first payments from the added funds would be available in 2025.

The governors will make a final decision on the proposal by the end of the year, the statement said. Approval would increase EBRD's authorised share capital from its current level of 30 billion euros and mark the third capital increase in its history, following two others in 1996 and 2010.

The EBRD has been the largest institutional investor in Ukraine over the past 30 years, and increased its support markedly after Russia's invasion last year.

(Reporting By Libby George, editing by Karin Strohecker and Emelia Sithole-Matarise)