Saturday, May 19, 2012
LONDON (Dow Jones)--The European Bank for Reconstruction and Development said Saturday its shareholders had approved the establishment of a new EUR1 billion fund to invest in North Africa and the Middle East.
The announcement is part of a strategy aimed at widening its role to the region affected by the "Arab Spring," allowing initial investments to be made without waiting for shareholder approval.
The EBRD first announced plans to broaden its mandate to the southern Mediterranean last year, but foot-dragging by its numerous government shareholders has meant that the bank still doesn't have the necessary approvals to implement the strategy fully.
Outgoing EBRD President Thomas Mirow expects the ratification process to be completed within a month.
Ultimately, the bank aims to invest up to EUR2.5 billion a year in the new region, without detracting from investments in its existing operations in central and eastern Europe and central Asia. That would imply an increase of over 25% in the bank's activities. Last year, it made new funding commitments of EUR9.1 billion.
The EBRD is planning to invest specifically in Egypt, Morocco, Tunisia and Jordan. It has opened preliminary offices in all four of these countries and appointed a managing director for the region.
It aims to focus on fostering small and medium-sized enterprises, funding improvements in municipal services, strengthening local financial sectors and improving energy supplies.
-Geoffrey T. Smith, Dow Jones Newswires; +44 758 427 1612; geoffrey.smith@dowjones.com
(END) Dow Jones Newswires
19-05-12 1136GMT
