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EBRD set to decide on Iraq membership next month

DUBAI, Sept 21 (Reuters) - The European Bank for Reconstruction and Development (EBRD) is assessing a request from Iraq to become a member of the multilateral financial institution, the bank’s acting president said on Monday.

Iraq, an oil producer whose economy is suffering from the double blow of the coronavirus crisis and lower oil prices, could potentially receive funding to support its private sector if it joins.

“Iraq’s membership will be decided by our board of governors at the annual meeting in three weeks from now,” said Jurgen Rigterink, the EBRD’s Acting President.

Set up in 1991 to help ex-communist countries of eastern Europe shift to market economies, the EBRD has widened its geographic scope in recent years to countries including Egypt, Tunisia and Morocco.

Earlier this year its shareholders gave the go-ahead to Algeria becoming a member.

“Algeria’s membership has been approved but hopefully we’ll be able to finalise at the beginning of next year whether it will become a recipient country, which is a decision to be taken by the bank’s shareholders,” said Rigterink.

A potential expansion of the bank’s operations into Sub-Saharan Africa has been put on hold, he said, as the bank deals with the impact of the coronavirus pandemic.

“We will seek guidance from our shareholders by next year, but at this point in time we’d like to focus completely on our current countries of operation.”

Majority-owned by the G7 group of major economies, the EBRD has said it expected to invest around 21 billion euros through to the end of 2021 to provide support during the coronavirus pandemic.

As of the end of August, it had invested 1.34 billion euros in the southern and eastern Mediterranean region, which includes Egypt, Jordan, Lebanon, Morocco and Tunisia - more than double the amount it invested there over the same period last year.

Lebanon, however, saw muted EBRD activity this year, said Rigterink.

“For us a successful International Monetary Fund programme is important to stabilise the country from an economic and financial point of view,” he said. (Reporting by Davide Barbuscia; Editing by Hugh Lawson)

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