Deauville Partnership With Arab Countries in Transition: Expansion of the European Bank for Reconstruction and Development
G-8 Leaders met today at Camp David to carry forward the work of the Deauville Partnership with Arab Countries in Transition, which was launched as a long-term, enduring partnership to respond to the historic changes in some of the countries in the Middle East and North Africa region. One year ago the G-8 launched the Deauville Partnership with Arab Countries in Transition to support the democratic transition and to strengthen governance, foster economic and social inclusion, create jobs, support private sector-led growth, and advance regional and global integration. Progress towards these objectives is more important than ever.
For the Deauville Partnership, the U.S. led the push for ratification of the amendments to the Articles of Agreement as required to expand the activities of the European Bank for Reconstruction and Development (EBRD) to Egypt, Tunisia, Jordan, and Morocco. With the changes to the EBRD Charter, the EBRD will activate the “special fund” with up to $1.3 billion in lending and investments this year, and, with full ratification of the charter amendment, up to $4 billion over the next three years.
This investment will bring the EBRD’s expertise in transition economies to the countries committed to economic transformation, supporting broad based private sector development, including the financing of small and medium sized enterprises (SMEs) and the creation of much-needed jobs.
Efforts are on-going to complete the ratification process as soon as possible.
The EBRD is an international financial institution that supports projects from central Europe to central Asia. Investing primarily in private sector clients whose needs cannot be fully met by the market, the Bank fosters transition towards open and democratic market economies. The principal forms of direct financing provided by the EBRD are loans, equity and guarantees. Since its inception in 1991, the EBRD has cumulative revenues of €71.1 billion and financed projects with a total value of over €210 billion. Since 2009, the institution has launched over 300 projects per year.
The United States is the single largest shareholder in the EBRD with a 10.2% share.
Since its inception, the EBRD has provided over €71.1 billion (~$91 billion) in financing for over 3,389 operations, contributing to investments worth over €210 billion (~$269 billion). As part of the continuing response to the financial crisis, the EBRD provided a record €9.0 billion (~$11.5 billion) in investment in 2010 and €9.1 million in 2011.
EBRD develops the private sector though loans and equity investments in private businesses and by mobilizing private capital alongside its own resources. The focus on private sector development is strong: 77% of EBRD’s 2011 business volume was invested in private sector projects, well over the charter requirement of 60%.
The EBRD also provides loans for projects in the public sector, with and without sovereign guarantees, to facilitate commercialization and/or privatization of state-owned enterprises and public utilities or the restructuring of municipal services.
- The EBRD was created in 1991 to foster the transition to open market-oriented economies by promoting private sector development, foreign investment, privatization, and efficient financial markets in Central and Eastern Europe and the countries of the former Soviet Union. The Bank’s countries of operation are expected to be “committed to and applying the principles of multiparty democracy, pluralism, and market economics.” The Bank also has a mandate to promote environmentally sound and sustainable development.
 Countries in the Partnership currently include the five Partnership countries (Egypt, Tunisia, Jordan, Morocco, and Libya), the G-8, Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, and Turkey. The International Financial Institutions include the African Development Bank, the Arab Fund for Economic and Social Development, the Arab Monetary Fund, the European Bank for Reconstruction and Development, the European Investment Bank, the Islamic Development Bank, the International Finance Corporation, the International Monetary Fund, the OPEC Fund for International Development, and the World Bank. The Organization for Economic Co-operation and Development is also a Partnership member.