EBRD shareholders back expansion to support emerging Arab democracies

By Anthony Williams
@ebrdtony

The EBRD’s support for economic and political reform in the Middle East and North Africa has taken a major step forward following overwhelming backing from shareholders for an expansion of the Bank’s geographic mandate.

The Bank’s Board of Governors, the EBRD’s leading authority, has approved amendments to EBRD statutes that will allow the Bank to invest in the southern and eastern Mediterranean region.

The EBRD is responding to calls from the international community – and from the Mediterranean region itself – to apply the 20 years of experience it has built up supporting the process of economic and democratic change in eastern Europe to a new region undergoing an equally dramatic transformation.

Commenting on the decision by the shareholders, EBRD President Thomas Mirow said: “This result is an impressive vote of confidence in our ability to deliver concrete projects that foster transition and improve people's lives.”

There was unanimous support from the 62 Governors who participated in the vote to extend the EBRD’s remit, representing 99.85 per cent of total voting power. The one remaining shareholder had not cast its vote by an early October deadline.

This decision by the EBRD governors – typically finance ministers or central bank governors in shareholder countries – still has to be formally ratified in national capitals, in most cases with a requirement of parliamentary approval.

However, the shareholders also paved the way to allow finance to start flowing to the new region even before ratification is complete.

They agreed changes that – pending decisions by the EBRD’s Board of Directors – will allow the EBRD to provide technical cooperation for Egypt, Morocco, Tunisia and Jordan in the coming weeks or months and to prepare for possible future investment projects there. Other countries in the region may follow in the wake of these four. 

The Bank expects to have some €100 million in grant funding available for technical cooperation, of which at least €20 million will come from the EBRD’s own net income.