The EBRD continued its vigorous response to the impact of the global economic crisis on the countries where it invests, financing a record number of projects in 2010 and taking overall investments to unprecedented new levels.
The number of project signings leapt by nearly one quarter to a new high of 386 from 311 in 2009 as the Bank worked to boost the process of economic reform especially in the less advanced countries of the Caucasus and Central Asia and in the western Balkans.
Overall, investments totalled a record €9.0 billion, compared with €7.9 billion a year earlier.
The bank is expected to report a net profit in excess of €1 billion for 2010 after a net loss of €746 million in 2009. This positive result comes as the EBRD's region begins to recover and is mainly due to an increase in the value of the Bank’s equity holdings, lower loan loss provisions and strong growth in net interest income on loans, whilst administrative expenditure was kept under control.
Commenting on the Bank’s activities in 2010, EBRD President Thomas Mirow said, “The EBRD has reached out more effectively than ever before to the economies that most need our support. By sharply increasing the number of individual transactions the EBRD has further supported the process of economic transformation across its countries of operations, a crucial step to help protect the burgeoning economic recovery.”
Investments in the Bank’s Early Transition Countries (*) rose sharply to around €920 million from a 2009 level of €512 million, with a total of 114 projects, up from 83 in 2009. The Bank financed 71 (52) projects in the Western Balkans, another key priority area, as business volume there rose 43 percent to just over €1 billion.
Investments under the EBRD’s Sustainable Energy Initiative, which supports energy efficiency as well as the promotion of renewable energy sources, rose 64 percent to €2.2 billion and accounted for nearly a quarter of total Bank financing.
Another priority in 2010 was the corporate sector as enterprises in eastern Europe sought funding to help them emerge from the crisis. The Bank’s financing of corporates accounted for 25 percent of total investments, while the Bank also continued to protect the financial sector which accounted for 34 percent of overall financing, including bank loans for onlending to small and medium-sized enterprises.
Reflecting continued crisis-driven demand for EBRD investments in the most advanced economies in the EBRD region, the Bank invested another €1.5 billion in the economies of Central Europe and the Baltics last year, close to the €1.6 billion seen in 2009.
Investments in Russia eased slightly to €2.3 billion from €2.4 billion, while investments in Turkey in the second year of the Bank’s operations in that country rose to close to €500 million from €150 million.
Backed with a strong pipeline of upcoming projects, the EBRD aims to maintain a robust level of investments in 2011 of between €8 to €9 billion, while also working with authorities and via its projects to promote further reforms that are crucial as the region recovers from the crisis and prepares for more sustainable growth in the future.
It will seek specifically to help promote more balanced economies, by supporting the process of economic diversification, especially away from an excessive dependence on a limited number of raw materials or product lines, while also continuing its drive to help develop local capital markets to reduce reliance on foreign currency funding.
* Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan, and Uzbekistan, Mongolia, Belarus and Turkmenistan