The European Bank for Reconstruction and Development (EBRD) will end its engagement in Cyprus at the end of 2020 after completing a six-year mandate in which it invested about €600 mln.
The end of the EBRD’s mandate means the bank will stop investing in new projects on the island but will continue to manage an existing portfolio.
Odile Renaud-Basso, EBRD President, said: “The EBRD is proud to have supported the recovery of the Cypriot economy, working across the island and serving both communities.
“The Bank acted quickly to contribute to the country’s stabilisation after a deep recession and strengthened its resilience to face future challenges.
“Cyprus was facing severe difficulties when we started working there six years ago, but I am very glad to see that since then, solid and sustainable growth has prevailed.
“I am confident that Cyprus will maintain this momentum and growth will rebound after the current coronavirus crisis.”
The bank contributed to the recovery of the Cyprus economy, which faced severe headwinds after the 2008 global financial crisis followed by the 2013 bailout when its banking system faced meltdown.
It invested in the banking sector, strengthening the capital base of the Bank of Cyprus and Hellenic Bank through equity investments, and supporting small and medium-sized businesses.
The EBRD also invested in the local energy sector, supporting an increase in renewable energy projects, financing the construction of five solar power plants.
It also provided an €80 mln loan to the Natural Gas Infrastructure Company for the development of new infrastructure, allowing Cyprus to replace expensive and polluting heavy fuel oil with cleaner natural gas and to reduce the country’s CO2 emissions by 10%.
In November 2015, the EBRD launched its Advice for Small Businesses programme, which has since carried out more than 270 advisory projects for SMEs across the island.
Additionally, hundreds of SMEs benefited from training and coaching programmes.
The EBRD’s work in Cyprus followed a decision by its board in May 2014 in response to a request from the Cypriot authorities for a temporary engagement.
“The Bank aimed to invest on the island to support the country’s economic adjustment programme.
“Since then, there has been a remarkable turnaround in the economy,” said EBRD in a statement.
“Solid growth from 2015 was accompanied by falling unemployment, careful management of public finances and progress in structural reforms in various sectors of the economy.”
In May 2017, the EBRD held its Annual Meeting and Business Forum in Cyprus.
In June 2017, the EBRD received an honorary award for its contributions to the economy from the Cyprus Investment Promotion Agency.