EBRD shareholders have made significant progress towards a decision on extending the Bank’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.
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 €2.5 billion a year in that region.
At its Annual Meeting, in the Kazakh capital of Astana, the EBRD’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 Bank’s geographic mandate to the region.
Any full-scale change in the EBRD’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 Bank’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 Bank’s operations in the existing recipient countries.
The extension of the mandate would also have to ensure that the Bank’s involvement would be well-coordinated with other international financial institutions active in the region in order to capitalise on each institution’s comparative advantages and ensure the best use of shareholders’ 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.