LONDON (Reuters) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it invested a record 5.1 billion euros ($5.9 billion) in the first six months of the year to shore up economies hit by the coronavirus fallout in its region.
The EBRD said the hit from the pandemic had been “severe” to the 38 economies it invests in, ranging from Estonia to Egypt and Morocco to Mongolia, predicting an average contraction of 3.5% this year.
Investments rose by more than a third compared to the first half of 2019, while nearly 2 billion euros went toward financing trade transactions in the first six month of the year, the bank added.
Turkey received nearly one billion euros or a fifth of total investments over the first half of 2020, while Egypt was the second-biggest beneficiary at 459 million euros, results showed.
Dealing with the fallout of pandemic also meant a potential expansion of the bank’s operations into Sub-Saharan Africa had been put on ice. The plan had been expected to be put to shareholders this year.
“We live in a new world now and for us the focus is on the challenges of our existing clients and in our existing countries,” said Jurgen Rigterink, the EBRD’s acting president.
“Having said that, the need for the EBRD business model is still there,” he said, adding he expected to get shareholder approval to expand to Sub-Saharan Africa in 2022.
While the EBRD only released its operational, not its financial results, Rigterink warned that the bank would post a “considerable loss” in the first half of the year, though this was driven by a hit to its equity portfolio on both valuations and currency depreciation.
Majority owned by G7 top economic powers, the EBRD reiterated it expected to invest around 21 billion euro through to the end of 2021.
(This story was refiled to fix spelling of Rigterink on second reference in paragraph 8)
Reporting by Karin Strohecker, editing by Sujata Rao
Our Standards: The Thomson Reuters Trust Principles.