The European bank’s shareholders give the green signal
LONDON: India has got the go-ahead to join the London-based European Bank of Reconstruction and Development (EBRD), after its shareholders agreed to make the country its 69th member, enabling Indian companies to undertake joint investments in regions in which the EBRD operates.
“This is an important step in the relationship between the EBRD and India, allowing us to build further on already very close ties,” said the organisation’s president Suma Chakrabarti.
Set up in London 1991, based on a proposal by former French President Francois Mitterand, the bank’s initial focus was to help Central and Eastern European nations reconstruct their economies in the post-Cold War era.
Since then the bank’s remit has extended to wider development aims. It remains committed to furthering the development of “market-orientated economies and the promotion of private and entrepreneurial initiative.”
Other members who receive investments include Mongolia, Turkey, Egypt, Cyprus, Greece, and Lebanon, among a total of 38 of the member states. Others including China, the US, UK, and France, are stakeholders, whose companies are able to invest in EBRD projects but do not receive financing for domestic projects.
While Indian businesses have already cooperated on EBRD projects worth some €982 million, the hope is that membership (which will see India take up a small stake in the bank) will spur further investment by Indian firms in a range of sectors from solar to utilities, providing them access to fast growing markets, with a body with established links in those regions.
It will also enable Indian citizens to work for the organisation. India’s stake will also give it a say in the direction of the EBRD’s future work. The EBRD’s largest shareholder is currently the US while other G7 nations also hold significant stakes.
Following the approval of Indian membership, India is expected to join within the first half of the year, ahead of the EBRD’s annual meeting in Jordan in June, which an Indian representative is likely to attend. The process for India’s approval has passed swiftly, from its formal application on December 18 last year to the decision going to the board of directors in late January.
The EBRD works with the private sector, and also local governments in the provision of services and infrastructure across 38 nations – with projects ranging from transport provision to agri-business, heating, waste management, to renewable energy.
In 2017, the EBRD signed an accord with the International Solar Alliance, which was launched in 2015 in Paris, and which will hold its first summit in New Delhi this month.