Initial focus on existing regions in face of major international challenges
The European Bank for Reconstruction and Development (EBRD) expects to scale up its activities in support of global development goals, even after another year of record investments in 2017, the Bank’s President, Sir Suma Chakrabarti, said.
He said work would begin shortly on whether the EBRD could increase investments in its current regions of operations.
Then, at the Bank’s Annual Meeting in Sarajevo in May 2019, shareholders would be asked whether the Bank should also explore the possibility of expanding further — beyond its existing regions.
The Bank’s shareholders had all signed up to delivering the Sustainable Development Goals – an ambitious global development agenda agreed in 2015 — and to addressing the challenge of climate change, he noted. The issue of migration was also a concern.
He was speaking after a meeting of the Bank’s Board of Governors which represents the 68 EBRD shareholders who define the Bank’s stategy. “It was recognised by all our shareholders that even with our record delivery of investment, we have the capital to do more,” he said.
Current estimates indicated that the EBRD could invest around €3 billion more a year. It financed projects worth €9.7 billion in 2017 and €9.4 billion in 2016.
At the Jordan meeting, shareholders had agreed to a phased, sequenced approach to exploring how the Bank could do more with its capital, the EBRD President said.
The EBRD would initially look at what more the EBRD could do in its existing countries of operations. It currently invests in 38 economies across three continents strentching from Estonia to Egypt and from Morocco to Mongolia.
“I am pretty hopeful that we will be able to start doing more in our existing regions as early as next year,” Sir Suma told journalists, stressing that the focus would be on quality investment – commercial projects that promote economic transformation.
The EBRD was also considering the question of expansion in the EBRD’s southern and eastern Mediterrenean (SEMED) region. The region includes Egypt, Jordan, Lebanon, Morocco, Tunisia and the West Bank and Gaza, where EBRD already invests, but also Algeria, Libya and Syria, where it is not yet active.
President Chakrabarti said the EBRD would report back to shareholders at the 2019 Annual Meeting in Sarajevo on its work on doing more in its existing regions.
He also said work would start early next year on an initial analysis that woud be presented to the Sarajevo meeting on what capital capacity the EBRD might have after stepping up its activities in its existing regions.
The study would also take into account the EBRD’s role in the international financial architecture – including how the multilateral development banks such as the EBRD worked together at both the global and at the European level.
The Sarajevo meeting would make a call on whether to investigate the possibility of further geographic expansion beyond the existing EBRD regions. A decision on any such expansion could be made one year later in 2020.
Jordan’s Minister for Planning and International Cooperation Imad Fakhoury, who had chaired the Board of Governors meeting, told the news conference: “a decision would be taken (in Sarajevo) on whether or not to give the green light to a full feasibility study on the options and criteria for expanding the Bank’s operations – which itself would only be presented at the 2020 Annual Meeting and decision-making process.”
Sir Suma added: “decisions on whether to expand further geographically could not be taken before 2020 at the earliest. There is a lot of work to be done on this. This will not have come before Governors until the Annual Meeting in 2020. This is a decision, obviously, for shareholders and not for me or the management. Shareholders will have the final say.”