The President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti visited Egypt this week and held high-level meetings in which he discussed the EBRD’s potential future activities in the country while the Bank’s shareholders paved the way for the flow of EBRD financing to Egypt.
The EBRD’s Board of Directors recommended that the Board of Governors grant Egypt the status of potential recipient country. The Governors have until 26 November 2012 to decide on this proposal. If they accept the Directors’ proposal, Egypt would become eligible to receive EBRD investments. The Bank is already active in the country through technical assistance projects.
During his visit to Cairo, President Chakrabarti met Egyptian President Mohammed Morsi. He was accompanied by Hildegard Gacek, the EBRD’s Managing Director for the southern and eastern Mediterranean (SEMED) region, and by Robert McMullan, who represents Egypt on the EBRD’s Board of Directors.
During his discussions with President Morsi and with Prime Minister Hisham Quandil, Mr Suma expressed the EBRD’s commitment to start its investment operations in Egypt and confirmed that the Bank could invest up to €2.5 billion a year in the SEMED region by 2015. A significant share of this amount would go to Egypt, expected to be the largest recipient of EBRD investments in the region. The EBRD’s first investment project in Egypt should be approved before the end of the year – pending the Governors’ acceptance of Egypt’s status as potential country of operations.
In line with the government’s own priorities, EBRD investments will be targeted at small and medium-sized enterprises (SMEs) across a wide range of sectors – and through them will support job creation. Other priorities will include the support to the Egyptian financial sector and the development of municipal services and infrastructure.
Mr Suma also held discussions with the Minister for International Cooperation and EBRD Governor, Ashraf Al Araby, and the Minister for Investment, Osama Saleh. During his meetings with the Egyptian officials, President Chakrabarti stressed that, through its investments, the Bank will seek to promote inclusive growth and contribute to reducing youth unemployment, supporting women’s entrepreneurship in SMEs and strengthening equality for women at the workplace.
The EBRD is in the process of recruiting staff for the Cairo office including bankers and the Head of Office.
The EBRD was established in 1991 in response to major changes in the political and economic climate in central and Eastern Europe following the fall of the Berlin wall. Last year, in response to the events of the Arab Spring, it agreed to extend its operations into the southern Mediterranean region. The EBRD finances projects, primarily in the private sector, that serve the transition to market economies and pluralistic democratic societies. The Bank is owned by 61 countries, the European Union and the European Investment Bank.