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EBRD mulls 1 billion euro North Africa fund, posts record profit European Bank for Reconstruction and Development says it's expanding its mandate to invest in Egypt, Jordan, Tunisia and Morocco
The European Bank for Reconstruction and Development (EBRD) on Wednesday reported record profits and investments in the first quarter of 2012 and said it planned to create a 1 billion-euro fund to invest in North Africa and Jordan. The EBRD, set up by governments in 1991 to support the ex-Communist states of eastern Europe, is expanding its mandate to invest in Jordan, Tunisia, Morocco and Egypt after the Arab Spring events of last year unseated decades-old dictatorships in many of the region's countries. While the expansion is yet to be approved by the bank's 65 shareholder nations, the EBRD said it would propose a special one billion-euro fund at its upcoming May annual meeting. That will allow it to finance projects in North Africa and Jordan until the shareholders formally ratify the bank's new mandate. The EBRD, whose investments in eastern European economies have helped drive growth and structural change across a range of sectors, has already started donor-funded activities in North Africa, with a technical cooperation fund worth 59 million euros having started to lend at the end of 2011. The new fund will be sourced out of net income, the EBRD said. The annual meeting will be held in London on 18-19 May. The bank said that ahead of starting full-fledged investments, temporary offices had been opened in Casablanca, Cairo and Tunis and one will soon be opened in Amman. Ultimately it hopes to invest 2.5 billion euros a year in these countries. The bank also said it had started the year on a strong note, almost doubling net first quarter profits to 637 million euros, from 330 million euros in the same period last year. The record quarterly result was attributed to strong net interest income and a recovery in the value of the EBRD's equity investments. "Strong earnings...will provide the EBRD with additional capital resources to meet future challenges in both its existing and future areas of operations," the statement said. The bank said also that it had invested an unprecedented 1.9 billion euros in 73 transactions. That compares with 1.1 billion euros in the first three months of 2011.
