EBRD puts $1.3 billion in Mideast support

LONDON - Agence France-Presse

Suma Chakrabarti replaced Thomas Mirow as the EBRD’s new president until 2016. AFP photo

The European Bank for Reconstruction and Development (EBRD) on May 19 approved an investment of 1 billion euros for expansion into North Africa and the Middle East under its first British president.

After years concentrating mainly on investments in private-sector firms across the former Soviet bloc, the EBRD said it was extending its reach in the wake of the Arab Spring uprisings.

It is planning an initial investment equivalent to $1.28 billion in Egypt, Morocco, Tunisia and Jordan, although it stressed that it would continue to seek to support growth in eastern Europe amid the eurozone crisis.

The announcement came on the final day of the EBRD’s annual meeting in London and after the bank on May 18 selected top British civil servant Suma Chakrabarti as its president until 2016.

Chakrabarti replaced Thomas Mirow in a surprise result.

“The fund is being financed out of the Bank’s reserves and will allow the Bank to start operations as a prelude to full-scale investment in the new region after an extension of the EBRD’s geographic remit has been ratified.” It added in a statement: “The EBRD is planning to invest specifically in Egypt, Morocco, Tunisia and Jordan. It has opened preliminary offices in all four of these countries, appointed a managing director for the region and hired additional staff with regional experience.” The EBRD said it would focus on the development of the private sector in those countries, fostering the growth of small and medium-sized enterprises, with the first projects likely to be concluded around September.

“The Bank expects to be able to eventually invest up to 2.5 billion euros a year in the new region, while not detracting from investments in its existing countries of operations, where funding totalled 9.1 billion euros in 2011,” it added.