- EBRD investments top €10 billion for first time in Bank’s history in 2019
- Green economy investments account for record 46 per cent of total financing
- Bank scales up work in local currencies, development of small firms, steps up inclusion
The EBRD delivered a record level of impact to its regions in 2019, honouring a pledge to raise both the quality and quantity of its investments in 38 economies across three continents.
The Bank financed an unprecedented 452 individual projects, compared with 395 a year earlier. Financing exceeded €10 billion for the first time in the Bank’s history, rising to €10.1 billion from €9.5 billion.
EBRD green economy financing hit a record €4.6 billion or 46 per cent of total business volume in 2019, underscoring the EBRD’s very strong support for the global climate agenda.
At the time of the 2015 Paris climate accord, the EBRD had set itself a target of dedicating 40 per cent of annual investment to the green economy by 2020.
The Bank also stepped up its work last year to make economies more resilient by supporting the development of local currency markets and local currency lending. The number of local currency and local capital market projects increased to 157 from 134 in 2018.
Investments targeting the development of small and medium-sized enterprises, which have a strong potential to promote sustainable job creation, hit a new record of €1.4 billion across 194 projects.
Separately, the Bank achieved new records in economic inclusion, where it works to tackle inequality of opportunity and reaches out to members of society who are excluded from economic progress, often women, or young people or those living in more remote areas. It financed a record 71 projects with an inclusion element, compared with 51 in 2018, with a record 55 projects specifically addressing gender issues compared with a previous 40.
The EBRD’s financial investments in 2019 were complemented by a strong level of support for reforms that help improve the business climate across its regions.
These included reforms to procurement processes to boost investment in renewable energy in Armenia, Kazakhstan, Kosovo, North Macedonia, Poland and Tunisia. The Bank helped strengthen the investment climate in Central Asia, with support for a Business Ombudsman in the Kyrgyz Republic and a Foreign Investors’ Council in Uzbekistan.
Improved policies and institutions helped raise the skills of women, young people and refugees in Egypt, Jordan and Turkey. In Ukraine, the EBRD supported financial and road-sector reforms and better governance for state-owned banks.
The EBRD is particularly well placed financially to continue delivering high-quality support for emerging economies in its regions following what are expected to be very strong profits for 2019. The Bank will release details of its financial results in a few weeks.
Egypt, where the roll-out of economic reforms improved the business climate and supported growth, was the largest recipient of EBRD financing in 2019, with investment of €1.2 billion after a previous €1.1 billion.
One key investment was a US$ 150 million financing package to the National Bank of Egypt that supported sustainable energy and climate projects by small companies and included programmes to raise the skillsets of young people and address the challenge of youth unemployment.
Ukraine, the second-largest recipient of investment, saw financing back above €1 billion for the first time since 2014. The sharp rise to €1.1 billion from €543 million in 2018 came against a backdrop of accelerated reforms and a drive to restore economic growth and stability.
A €149 million loan to Ukraine’s Ukrenergo energy group provided finance for essential upgrades to the country’s electricity transmission infrastructure and contributed to reductions in CO2 emissions.
Investments in third-placed Turkey, where the EBRD marked its 10th year of engagement in 2019, remained almost unchanged at just above €1 billion. As in 2018, around one-third of the Bank’s 2019 financing related to local currency and the development of local capital markets in order to help companies reduce currency risks.
One such lira loan, worth the equivalent of US$ 100 million to energy group Enerjisa Enerji, made an important contribution to capital market enhancements in Turkey with its link to a new risk-free benchmark overnight lending rate that the EBRD had helped develop.
The EBRD is currently preparing its next five-year strategy, which shareholders will approve at the May 2020 Annual Meeting in London.
As part of that preparation, the Bank has already agreed to scale up financing in its regions while ensuring even greater support for positive economic transformation.
It is also focusing on further possible engagement in the southern and eastern Mediterranean region and analysing potential options for expansion in new areas such as sub-Saharan Africa.