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The European Bank for Reconstruction and Development, which currently provides financing for neighbours to EU countries, is set to become the latest development financial institution to expand its remit into Africa, with a focus on green investment.
The EBRD has agreed on a work plan for expansion into sub-Saharan Africa and is set to make a final decision in 2022.
The bank's shareholders had given 'a green light on and agreed on the work plan to continue the exploratory work on possible limited and incremental expansion into sub-Saharan Africa and Iraq,' ERBD President Odile Renaud-Basso said at last week's press conference at the end of the EBRD's annual meeting.
The EBRD's scope and capital base is far more limited than the Luxembourg-based European Investment Bank and its mandate now includes a pledge dedicate more than 40% of its financing to green investment, a pointer to the sort of projects that will be prioritised. Funding, if it becomes reality, is likely to be focused in countries where the private sector is already strong, such as Kenya and Senegal, say officials.
EBRD is already in discussions with the African Development Bank to look at 'complementary' areas they can partner on. One of those areas identified has been the development of green cities across Africa.
The expansion into sub–Saharan Africa was supposed to have begun last year but has been delayed by the Covid pandemic, say officials (AC Vol 61 No 8, Hard bargaining ahead on debt and public health). The European Commission, one of the EBRD's shareholders, has been weighing up whether to create a new Africa-focused development bank or expand the mandates of its existing institutions for several years, as part of its plans to increase private sector investment in the continent (AC Vol 59 No 9, Europe banks on Africa).
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