As Post-Communist Mission Reaps Rewards, EBRD Looks Ever Further
Created to help remake the continent after the Soviet collapse, the European Bank for Reconstruction and Development is mulling whether its help is now needed ever-further afield.
The London-based lender has fostered investment across ex-communist Europe, boosting economic growth and living standards. Against that backdrop, it’s expanded to the likes of crisis-hit Greece, and to North Africa as pro-democracy movements appeared.
When shareholders meet in this week in the Bosnian capital of Sarajevo, they’ll consider future operations in Algeria, Libya, Syria and beyond into sub-Saharan Africa.
“No bank wants to sit on resources that aren’t being used, particularly a development bank,” Erik Berglof, a former EBRD chief economist, said by phone.
The bank now operates in 38 economies from Mongolia to Morocco, providing economic analysis, equity investments and loans for energy and transport. In 2014, geopolitics upended its biggest market, Russia, as the seizure of Crimea halted new lending. Turkey’s recession helped make Egypt last year’s biggest receipt of new investment.
The bank’s shareholders, which include China and India, will also discuss what to do with surplus capital -- whether to return it, keep it as a crisis buffer or lend it out. A decision on expansion or a dividend payout won’t come before 2020.
©2019 Bloomberg L.P.