The European Bank for Reconstruction and Development (EBRD) expects 2021 investments to ease off from last year’s record 11 billion euro ($13.1 billion) outlay as big projects slow in the aftermath of the coronavirus crisis, its president told Reuters.
A resurgence of COVID-19 outbreaks in Western Europe, the Central Balkans and Central Asia in the first half of the year, accompanied by fresh travel restrictions, will affect EBRD’s activity in an otherwise robust economic recovery from the pandemic, said Odile Renaud-Basso.
“We see a bit of slowing down of big investment projects, so a bit of uncertainty … (and a) wait and see approach from some of our clients,” Renaud-Basso said ahead of the EBRD’s annual meeting this week in its 30th anniversary year.
“We expect the level of activity to be not as high as last year, which was exceptional with 11 billion (euros), but to be more in a standard range of 9-10 billion (euros).”
In an effort to help the nearly 40 economies in which the EBRD operates to cope with the pandemic, the bank last year focused on providing emergency short-term liquidity, working capital, trade finance and restructuring.
Activity this year was centred on supporting clients through the economic recovery, which is expected to pick up speed in the second half of 2021 as vaccination programmes continue and control of the pandemic increases, said Renaud-Basso.
That included more environmentally friendly projects under a drive to make more than 50% of its investments focused on the transition to sustainable and climate-resilient economies by 2025.
The bank may be able to offer greater flexibility with those economies still heavily reliant on fossil fuels provided that they have decarbonisation ambitions, Renaud-Basso added.
Poland, for example, receives the bulk of its electricity from carbon-intensive coal and is the only European Union state that has refused to pledge climate neutrality by 2050.
“If this takes place consistently with long-term strategies that are strongly aligned with the Paris Agreement and have a target date for decarbonisation and so forth, we may have some flexibility to accommodate these strategies,” she said.
“That’s important for (the) Western Balkans, Poland, Kazakhstan.”
Source: Reuters (Reporting by Tom Arnold and Karin Strohecker Editing by David Goodman)