The European Bank for Reconstruction and Development (EBRD) agreed to the creation of a €1 billion special fund to start investments in emerging Arab democracies in response to the wave of political change in parts of the Middle East and North Africa.

The European Bank for Reconstruction and Development (EBRD) announced the creation of a special fund to boost the investments in emerging Arab democracies. The €1 billion fund is being financed out of the Bank’s reserves and will allow the Bank to start operations as a prelude to full-scale investment in the new region after an extension of the EBRD’s geographic remit has been ratified, as it was announced by the EBRD itself. In January 2012, the EBRD also announced €100 million in venture capital investment from EBRD to technology companies.

Specifically, the investment will be in Egypt, Morocco, Tunisia and Jordan. The Bank will focus on the development of the private sector in the new region, fostering growth of small and medium-sized enterprises, helping to improve municipal services, developing stable financial sectors and improving energy supplies via SEI activities.

The EBRD has opened preliminary offices in all four of these countries, appointed a Managing Director for the region and hired additional staff with regional experience. The Bank expects to be able to eventually invest up to €2.5 billion a year in the new region, while not detracting from investments in its existing countries of operations, where funding totalled €9.1 billion in 2011.