Bank aiming for €900 million financing package
A conference hosted by the EBRD called for a new approach to tackle the refugee crisis caused by the Syrian civil war.
It proposed a key role for the private sector in providing sustainable livelihoods for refugees and helping host countries cope with the economic strains of large-scale migration.
EBRD President Sir Suma Chakrabarti opened the conference by announcing plans for a financing package worth €900 million for Turkey and Jordan, two of the EBRD countries that have been most seriously affected by the exodus of Syrians escaping from the violence in their home country.
He was joined in an opening session by Imad Fakhoury, Minister of Planning and International Cooperation, Jordan, Muhammed Murtaza Yetiş, Prime Minister's Chief Advisor responsible for Refugees and Humanitarian Aid, Turkey, and Elias Bou-Saab, Minister of Education, Lebanon. Lebanon has applied to become a member of the EBRD with a view to receiving EBRD finance, subject to a decision by shareholders.
Minister Fakhoury said that Jordan was working on an approach that aimed to turn the refugee crisis into a development opportunity. He spoke of a paradigm shift in dealing with refugees by supporting private sector solutions as well as Public Private Partnerships. The approach would help Jordan “create more economic opportunities for Jordanians as well as for Syrian refugees until they can get back safely and rebuild their home once a political solution is found”.
The conference stressed the importance of engaging the private sector in helping to address the immediate infrastructure requirements caused by the influx of refugees and also helping to create jobs, especially by the development of labour intensive small and medium sized enterprise.
The aim was to create economic opportunities for both the refugees and the host populations and to make the host economies more robust and resilient in the longer term. Access to credit and access to markets were identified as key challenges for private sector development, areas where the EBRD has particular expertise and experience through its provision of targeted credit lines via local banks and promoting cross-border trade.
Private sector involvement would also bring necessary skills to economic development and help to reduce the impact of responding to the crisis on stretched public sector budgets, the conference concluded.
Business representatives at the conference stressed that governments had to take steps to make it easier for the private sector to operate by responding more quickly to rapidly changing circumstances.
Speakers said that in the development of small business, special emphasis had to be put on firms employing women and youth who constitute a large share of the refugees. Empowering refugees through financial inclusion was seen as a way of reducing the burdens they face.
They added programmes were needed to identify refugees’ skills and match them with potential shortages in host countries. Organisations like the EBRD can provide active support together with the private sector to offer training and work-based learning opportunities and routes into jobs.
The conference also discussed the role of the private sector in upgrading municipal services in an efficient and sustainable way. Water, waste water, solid waste and urban transport services are under severe pressure from the increased number of users. Only the joint involvement of the public and private sectors can address these issues.
Announcing the EBRD’s €900 million financing package, the EBRD President said the Bank would be able to finance up to €500 million in new transactions subject to mobilising an additional €400 million in grants.
“In order to contribute to the mobilisation of grant funding, management will propose to shareholders an allocation from the Bank’s net income of around €100 million over a period of three years, from 2016 to 2018, subject to appropriate governance rules and to the Bank’s continuing profitability. Management will propose to shareholders an initial allocation of €35 million in 2016,” he added.
Among the countries where the EBRD invests, Turkey currently houses more than 2 million refugees from Syria alone, while Jordan has an estimated 1.4 million people who have fled their homes.
The EBRD is already an important investor in these countries. The Bank invested €1.9 billion in Turkey in 2015 and plans to continue providing a high level of finance. Investments have grown strongly in the southern and eastern Mediterranean region, which includes Jordan, and exceeded €1.4 billion last year. The Bank is working towards becoming operational in Lebanon later this year, subject to a decision by shareholders.
EBRD President Chakrabarti will report on the conclusions of the EBRD conference and on the EBRD’s own proposals at the Supporting Syria and the Region conference 2016 in London on 4 February
