The European Bank for Reconstruction and Development (EBRD) is underpinning its engagement in Cyprus with the opening of a Resident Office on the island that will oversee an investment of at least €600 mln over the next six years, to help revive the bailed-out economy.
The office in Nicosia was opened on Thursday by Finance Minister Harris Georgiades and EBRD President Sir Suma Chakrabarti.
The Resident Office, headed by Libor Krkoška, a Senior Banker at the EBRD, will serve as home for the bank’s investment activities in Cyprus which started earlier this year and already have produced concrete results with a €120 mln participation in a capital raising by Bank of Cyprus, the country’s biggest lender.
Arne Berggren will represent the EBRD on the new Bank of Cyprus board headed by former Deutsche Bank CEO Josef Ackermann and a hos of other investors, including New York-based fund manager Wilbur L. Ross Jr.
Cyprus, a founder member and shareholder of the EBRD, became a recipient country for investment following a decision by the bank’s shareholders in May this year, with the engagement on the island seen until 2020.
The EBRD will focus on investments in the financial sector, energy, privatisations and providing finance to projects of individual companies. The bank’s goal is to support the recovery of the country’s economy which is suffering from a protracted recession following a deep financial crisis.
“This office provides us with the necessary infrastructure to deliver on our commitment to Cyprus,” said Sir Suma. “We are very ambitious and confident that EBRD investments will strengthen local businesses, especially the small enterprise (SME) sector. Reviving this sector is crucial for revitalising growth and creating jobs.”
“Cyprus stood ready when our first countries of operations in Central and Eastern Europe needed investment. It is now time for the EBRD and its shareholders to stand by Cyprus,” Sir Suma added.
Georgiades welcomed Sir Suma to Cyprus and thanked him for his personal interest and support. The Minister expressed his appreciation to the EBRD for its engagement in Cyprus and the opening of the office.
“The timing could hardly have been more appropriate, as it gave a very positive signal of confidence and trust to the banking system and towards improving the conditions for financial stability at a time when it was most needed,” Georgiades said.
“The EBRD with its experience and expertise, and with a wide range of financial instruments, has a unique role to play in Cyprus and will significantly contribute to the reform and recovery of our economy”, he added.
The Resident Office, which has a mandate to operate on the whole territory of Cyprus, will begin its operations with a staff of nine people, headed by Krkoška.
“Our first experiences in Cyprus are promising”, Krkoška said. “We are currently exploring a number of options and assessing potential projects where the EBRD can make a difference for the economy and the people of Cyprus. With our office now in place we shall soon be in a position to deliver.”
