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EBRD shareholders take steps towards supporting emerging Arab democracies

21 May 2011 11:23 (UTC +04:00)

Baku. Ahmad Yusifzadeh â€“ APA. EBRD shareholders have made significant progress towards a decision on extending the Bankâ€™s investments to countries in the Middle East and North Africa. The move would be a major part of the international community’s response to the Arab spring. APA reports with reference to EBRD.

According to report Investments could reach â‚¬ 2.5 billion a year.
Further political decisions will be taken in the weeks and months ahead. EBRD President Thomas Mirow has indicated that the Bank would have the capacity, eventually, to invest as much as â‚¬2.5 billion a year in that region.
At its Annual Meeting, in the Kazakh capital of Astana, the EBRDâ€™s Board of Governors tasked the Board of Directors to come up with decisions and recommendations, by 31 July, 2011, on an extension of the Bankâ€™s geographic mandate to the region.

Any full-scale change in the EBRDâ€™s area of operations would subsequently have to be endorsed by all of its 63 shareholders.

The EBRD is already considering a request by Egypt to become a country of operations and Morocco, another EBRD shareholder, has more recently expressed a similar interest in becoming a recipient of investments by the Bank.

However, EBRD shareholders are also examining an extension of EBRD operations to a wider region within the Middle East and North Africa.
The recommendations to be made over the coming weeks are aimed at amending the Bankâ€™s founding articles, allowing it to extend its mandate to the region and for shareholder countries in the area to be able to become recipients of EBRD investments.

Any decision to start investing in the region would take into account political and economic reform steps undertaken in the relevant countries.
It would have to ensure that the EBRD would not require additional capital contributions from shareholders and that such a move should not compromise the scope and impact of the Bankâ€™s operations in the existing recipient countries.

The extension of the mandate would also have to ensure that the Bankâ€™s involvement would be well-coordinated with other international financial institutions active in the region in order to capitalize on each institutionâ€™s comparative advantages and ensure the best use of shareholdersâ€™ resources.

In addition to producing a road map for decisions on potential full-scale involvement in the region, the Directors will also consider further steps that could allow initial investments to begin as quickly as possible.

EBRD was established in 1991. Since its establishment the EBRD have become important financial investor in its region of operations which stretches from central Europe and the Western Balkans to central Asia. The EBRD uses the tools of investment to help build open and market economies in 29 countries across central and Eastern Europe and central Asia (countries of operations).