The EBRD’s shareholders agreed on Saturday to the creation of a €1 billion special fund to start investments in emerging Arab democracies in response to the wave of political change in parts of the Middle East and North Africa.
The Fund is being financed out of the Bank’s reserves and will allow the Bank to start operations as a prelude to full-scale investment in the new region after an extension of the EBRD’s geographic remit has been ratified.
The expansion into the southern and eastern Mediterranean (SEMED) region follows calls for EBRD support from the international community and from countries in the region itself.
The EBRD was asked to apply its 20 years of experience in supporting economic development in central and eastern Europe and the former Soviet Union to another region where people are again demanding a more stable economic future.
The EBRD is planning to invest specifically in Egypt, Morocco, Tunisia and Jordan. It has opened preliminary offices in all four of these countries, appointed a Managing Director for the region and hired additional staff with regional experience.
The Bank will focus on the development of the private sector in the new region, fostering growth of small and medium-sized enterprises, helping to improve municipal services, developing stable financial sectors and improving energy supplies via SEI activities.
EBRD staff are already preparing for investments in SEMED and the first projects are likely to be concluded around September of this year.
The Bank expects to be able to eventually invest up to €2.5 billion a year in the new region, while not detracting from investments in its existing countries of operations, where funding totalled €9.1 billion in 2011.