Reuters – The European Bank for Reconstruction and Development (EBRD) aims to invest up to 800 million euros next year in key Arab countries hit by political turmoil to help bolster regional stability and spur growth, a senior bank official said.
The bank, set up by governments in 1991 to support the ex-Communist states of eastern Europe, has expanded its mandate in the past few years to invest in Jordan, Tunisia, Morocco and Egypt after uprisings unseated decades-old dictatorships in parts of the Middle East.
Continued political turmoil prompted the bank to put some investment on hold but, drawing from a 1 billion euro special fund, it has invested to date 429 million euros in 17 projects ranging from large energy projects to loans for private firms, with accumulative disbursements expected to reach around 500 million euros in 2013.
“What has happened because of the political events, we have been slowed down but we have the capacity to ramp up quickly so we are coming up with 800 million euros next year for the region,” Betsy Nelson, EBRD’s Vice President for Risk, told Reuters in an interview.
“But if things settle and there are opportunities we have the capacity to even do more,” she added.
“What has slowed down are investments for Egyptians in their own country. We provide the money but we are dependent on project sponsors and the private sector and projects and if they slow down there is not much we can do,” Hildegard Gacek, managing director of EBRD’s southern and eastern Mediterranean region.
EBRD was partnering with top lender Housing Bank for Trade and Finance and other local banks in Jordan to expand credit to small and medium sized firms, the backbone of the region’s corporate landscape, that are traditionally short on funds.
EBRD has recently extended a $100 million loan to finance the construction of a 240 megawatt private power plant near the Jordanian capital. Another $80 million loan was extended to construct a major mall in partnership with Kuwaiti investors.
“There is a lot of demand in Jordan and the difficulty the government has in terms of its deficit and fiscal space has given more interest to companies to come to us,” said Heike Harmgart, head of EBRD’s new Jordan office.