The European Bank for Reconstruction and Development (EBRD) on January 18 reported another year of record lending, amounting to €9.7bn in 2017 compared to €9.4bn in 2016.
In climbing to a new high, the multilateral development bank again overcame its suspension of financing to Russia—previously its top investment destination—a move which was insisted on by the US and European country shareholders in 2014 after Moscow annexed Crimea.
A release of preliminary figures from the EBRD also showed that the number of individual projects it financed in 2017 climbed to a record 412 from 378 in 2016. “We are in excellent operational health,” EBRD president Sir Suma Chakrabarti said.
Turkey was the biggest recipient of investment financing, with €1.6bn, although that was less than the €1.92bn awarded in 2016. Financing to Egypt, which became an EBRD destination in 2015, almost doubled to €1.41bn. That made it the second biggest investment location for the development bank. Ukraine took third place, with lending rising from €581m in 2016 to €740m last year. Poland ranked fourth with €659mn compared to €776mn in the previous year. Greece was in fifth on €614m, up from €485m in 2016.
The EBRD, established in 1991, also said that in 2017 its “green economy” financing moved up to €4.1bn from €2.8bn in 2016. That represented 43% of its total financing during the 12 months and meant that the lender had already met its target of reaching 40% by 2020, a milestone agreed under the Paris Climate Agreement.
Bank governors at last year’s AGM maintained the ban on lending in Russia despite lobbying from the Russians to get it overturned.
The bank said its annual profits would be finalised next month, but were expected to remain strong.
That would be despite an expected hit to be taken under ‘mark-to-market’ accounting rules because of substantial depreciations in currencies including Turkey’s lira (TRY) and Russia’s rouble—although Russia is no longer an investment destination for the bank, it still has a Russian investments portfolio valued at around €3bn. Last year, the TRY fell 18% versus the euro, while the Russian rouble declined 7%.
Having dropped Russia, the EBRD has spread out as far as Mongolia, Morocco and parts of the Middle East. In all, it now operates in more than 30 countries.