EBRD to expand equity investments in South Caucasus

EBRD to expand equity investments in South Caucasus
# 18 May 2007 14:48 (UTC +04:00)
The EBRD will further expand its investment operations in the South Caucasus nations, EBRD officer Murtaz Kikoria told the 2nd Caucasus International Banking and Finance Conference in Tbilisi.
He added that the EBRD’s equity investment in Azerbaijan’s banking sector was €62 million, €88 million in Georgia’s and €20 million in Armenia’s banking sector, as of January 1, 2007.
The EBRD holds a stake in 7 commercial banks in Georgia and this equity participation accounts for 19% of aggregate bank assets in the country.
The EBRD’s total investments in 2006 rose to €4.9 billion from €4.3 billion a year earlier and there were a record 301 projects, compared with 276 in 2005.
In 2006 the number of equity investment projects rose to 64, from 61 in 2005, while in volume terms equity investments rose by 76 per cent to €1.0 billion, up from €572 million in 2005.
The Bank, set up in 1991 to help the transition to the market economy of countries in central Europe and the former Soviet Union, has now invested a total €33.3 billion since its inception. The total amount of investment mobilized in the region, including funds raised via commercial co-financing, has now exceeded €100 billion, reaching €102.9 billion, compared with €94.4 billion at the end of 2005.
The EBRD’s 2006 earnings rose to €2.4 billion from a previous €1.5 billion, mainly as a result of the realization of previous equity investments. This allowed for a significant addition to reserves to support future business activities. Earnings also included nearly €800 million in unrealized gains on share holdings, leaving around €1.6 billion in realized profit.
Reserves rose to €7.0 billion at the end of 2006 from €4.7 billion a year earlier. Future earnings remain vulnerable to changes in the economic environment and in financial markets.
Last year the Bank unveiled its strategy for the next five years, which foresees a shift in its investments further to the east and south of its areas of operations. This will result in a focus of activities on Russia, Ukraine, Central Asia, the Caucasus, the Western Balkans and South East Europe along with a decline in activity in Central Europe.
This trend was reflected in Russia, where investments rose to €1.9 billion from €1.1 billion and spanned right across the country. /APA-Economics/