EBRD shareholders aim for Arab expansion

The European Bank of Reconstruction and Development, which for two decades has financed projects in eastern Europe and the former Soviet states, has launched the process to expand its operations to North Africa and the Middle East. "EBRD shareholders have made significant progress towards a decision on extending the bank's investment to countries in the Middle East and North Africa," the bank said in a statement on Saturday. Political decisions about the major expansion of the bank's role after the uprisings have swept through Arab North Africa in the last months will come in "the weeks and months ahead", it said. The EBRD chief Thomas Mirow said the bank would eventually be able to invest 2.5 billion euros ($3.54 billion dollars) in the region. "The move would be a major part in the international community's response to the Arab spring," the bank said. It is already considering Egypt as a potential country of operations after the country's interim government submitted a request to start lending to small- and medium-size businesses following the ousting the former president Hosni Mubarak. Morocco similarly expressed interest, the bank said. The exact geographical extent of the bank's new responsibilities remains to be defined, however. The board's recommendations for the final decision on expanding the geographic scope of the bank are expected by July 31, the statement said. Changes in its status would have to be formally ratified by 63 shareholders, including 61 states, the European Union, and its financial arm European Investment Bank. However the bank's board of directors will "consider further steps that could allow initial investments to begin as quickly as possible," it said. The expansion would not require additional contributions from shareholders and "not compromise the scope and impact" of EBRD's activity in its current area of operations. The London-based EBRD was formed in 1991 to help former communist nations in their transition to market economies. It tends to invest in private enterprises together with commercial partners. The EBRD is meeting for the second day of the annual meeting in the Kazakh capital Astana. It is the latest major event to be hosted by the Central Asian state as it seeks to showcase its own development since the collapse of the USSR.