EBRD Annual Meeting sets sights on resilient post-coronavirus future

By Anthony Williams
@ebrdtony

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  • Conference to agree steps to deliver robust, green recovery
  • Focus on equality and digital transition
  • Governors will select new President

The European Bank for Reconstruction and Development (EBRD) holds its Annual Meeting on 7 to 8 October, fully focused on delivering a robust post-Covid future for the 38 emerging economies where it invests.

At the meeting, which was postponed from May and will be held in virtual session, shareholders will be asked to approve an EBRD strategy for the next five years that preserves the benefits of successful economic transformation in the face of the pandemic challenge.

“As our regions start to recover, our goal will be to support an acceleration of transition, helping our countries build a more resilient, sustainable future,” Acting President Jürgen Rigterink said.

The emphasis of the 2021-25 strategy that goes before the EBRD Governors will be on delivering green, low-carbon economic growth, promoting equality of opportunity and accelerating digital transition.

Spanish Economy Minister Nadia Calviño, the current Chair of the Board of Governors, will open proceedings at the Annual Meeting in a public session that will also feature speeches from UK Chancellor of the Exchequer, Rishi Sunak and Acting EBRD President, Jürgen Rigterink.

The Prince of Wales will also be delivering a pre-recorded special address to the event.

Meeting will elect new President

The Annual Meeting will also see the election of a new President of the EBRD after Sir Suma Chakrabarti stepped down at the end of two full four-year terms in July.

Three candidates are standing for election: Polish Finance Minister, Tadeusz Koscinski; former Italian Finance Minister Pier Carlo Padoan; and Odile Renaud Basso, Director General, French Treasury, Ministry of Economy and Finance.

The new strategy that is going to the Board of Governors notes that Algeria, part of the EBRD’s southern and eastern Mediterranean region, has applied to become a recipient county following the approval of its request to become a member of the Bank.

The strategy also confirms the EBRD’s interest in a limited and incremental expansion of its activities to sub-Saharan Africa and Iraq during the next five-year period. Governors will consider an update on this issue in 2022, reflecting guidance from the 2021 Annual Meeting.

At the conference this year, the EBRD Governors are expected to decide on whether Iraq should become a shareholder of the Bank.

Governors asked to back EBRD becoming majority green bank by 2025

The EBRD has responded to the immediate impact of the crisis with its emergency investments, but is preparing to do even more now to ensure that the recovery – when it comes – is “green”, resilient and sustainable.

Within the strategy presented for approval to Governors is a plan to scale up the EBRD’s Green Economy Transition approach, with a goal of raising the share of green finance to at least 50 per cent by 2025.

By becoming a “majority green” bank, the EBRD aims to reduce net CO2 emissions in its regions by between 25 and 40 million tonnes over the five-year period.

The EBRD has already reacted decisively to the crisis, investing at record levels within a €21 billion two-year “Solidarity Package” that has delivered emergency capital to firms affected by the virus, upheld the provision of vital infrastructure services and increased access to trade finance in order to keep commerce flowing.

After financing of an unprecedented €10.1 billion in 2019, investments rose to just over €5 billion in the first six months of this year, compared with €3.7 billion a year earlier and a previous first-half record of €3.9 billion in 2016.

The Bank complemented its increased financing with scaled-up policy support.

The pipeline of future projects is also at record highs and the Bank has the potential to increase annual financing well above €10 billion in the five-year period to 2025.

The EBRD will promote equality of opportunity by strengthening the Bank’s work in supporting access to skills and employment, with a priority on women, young people and those in less-developed regions.

It aims to speed up digital transition, promoting technological progress that is a key driver of transition across its countries of operations.

In light of the increase in the level of state involvement in the economy in response to the Covid-19 crisis, the EBRD will also pay heightened attention to economic governance during the strategy period.

The coronavirus has dealt a severe blow to the economies of the countries where the EBRD invests across three continents spanning from Estonia to Egypt and Morocco to Mongolia.

Exports have shrunk, international and domestic tourism has fallen sharply and remittances have been sliding, while many migrants have returned to their home countries.

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