LONDON: Shareholders in the European Bank of Reconstruction and Development, which funds projects in the ex-Soviet bloc, have backed expansion into the Middle East and North Africa, it said Wednesday.
The London-based EBRD launched plans in May to expand into the region, after a wave of uprisings in the so-called Arab Spring, and wants to start investing in the area next year.
"The EBRD’s support for economic and political reform in the Middle East and North Africa has taken a major step forward following overwhelming backing from shareholders for an expansion of the bank’s geographic mandate," the EBRD said.
"The bank’s board of governors, the EBRD’s leading authority, has approved amendments to EBRD statutes that will allow the bank to invest in the southern and eastern Mediterranean region," it added in a statement.
"The EBRD is responding to calls from the international community — and from the Mediterranean region itself — to apply the 20 years of experience it has built up supporting the process of economic and democratic change in eastern Europe to a new region undergoing an equally dramatic transformation."
The bank added that 62 out of 63 shareholders had voted in favor of extending the EBRD’s remit. One shareholder failed to vote by the October deadline. The decision has yet to be formally ratified by governments.
The EBRD is owned by 61 governments as well as the European Commission and the European Investment Bank.
On Wednesday, EBRD shareholders also backed moves to provide technical assistance in Egypt, Morocco, Tunisia and Jordan at a cost of €100 million ($133 million), including at least €20 million from its own coffers.
"Shareholders also paved the way to allow finance to start flowing to the new region even before ratification is complete," the EBRD said.
"They agreed changes that — pending decisions by the EBRD’s board of directors — will allow the EBRD to provide technical cooperation for Egypt, Morocco, Tunisia and Jordan in the coming weeks or months and to prepare for possible future investment projects there.
"Other countries in the region may follow in the wake of these four," the lender added.
The institution, which invests in private enterprises together with commercial partners, operates in 29 countries from central Europe to central Asia. It was formed in 1991 to help former communist nations in their transition to market economies.