EBRD Pledges Continued Support for Conflict-Affected Economies
The European Bank for Reconstruction and Development (EBRD) has signaled its intent to deepen its financial involvement in regions impacted by conflict. During the bank’s annual meeting in Riga on June 5, EBRD president Odile Renaud-Basso outlined a strategy to increase support for economies facing the pressures of global instability, trade disruptions, and geopolitical tensions.
Renaud-Basso emphasized that the institution remains committed to prioritizing countries struggling with economic crises and conflict. “When other lenders pull back, we scale up, as we have done in Ukraine,” she stated. “While safeguarding our financial strengths and carefully managing risk, we continue to invest.”
Expanding Support in the Middle East and Ukraine
Following its established model in Ukraine, the bank is planning to extend its support to Iraq, Jordan, Lebanon, and the West Bank and Gaza, along with neighboring nations affected by regional conflict. The EBRD intends to provide liquidity to businesses and state-owned enterprises, with the goal of stabilizing financial sectors to foster long-term recovery and growth.
The situation in Ukraine continues to be a central focus for the bank. Since the start of Russia’s full-scale invasion, the EBRD has deployed €10bn into the country. According to Renaud-Basso, the bank is currently the number one institutional investor in Ukraine, having supported nearly 50,000 firms and infrastructure and energy projects that have benefited more than 22 million people. Looking ahead, she noted that the bank expects to remain at the forefront of international reconstruction efforts.
Navigating a Turbulent Global Landscape
Renaud-Basso warned that the international community is facing a period of significant turbulence. She cited several key drivers of this volatility, including:
- Energy market disruptions
- Rising inflation and interest rates
- Tightening government finances
- The growing impact of artificial intelligence
“This one started in the energy sector but is already hurting the global economy,” she said regarding the latest shocks to international markets. “Its scale, scope and speed underline how volatile our world has become.”
Strategic Outlook and Risk Management
In response to declining development aid and rising sovereign debt, the bank is exploring new methods for international cooperation. The EBRD recently initiated its first significant risk-transfer transaction, a move that could allow the institution to share investment risks with insurers and pension funds. This strategy may provide a blueprint for the bank to sustain its development objectives while managing the financial risks associated with unstable regions.
Beyond immediate conflict response, the bank is looking toward long-term development opportunities in Central Asia and the Caucasus. Potential growth areas identified by the leadership include investments in renewable energy, digitalization, supply-chain diversification, and the development of the Middle Corridor trade route, which links Asia and Europe.
