India was today formally announced as the 69th shareholder of the European Bank for Reconstruction and Development (EBRD), paving the way for more joint investment with Indian companies across the bank’s regions of operation.
The Indian government had applied for EBRD membership in December 2017. The EBRD board of governors, which represents all the existing shareholders, voted unanimously in favor of the country’s application in March 2018, with the entire membership process completed this week.
Membership of EBRD would enhance India’s international profile and promote its economic interests. It will also give access to EBRD’s Countries of Operation and sector knowledge.
India’s investment opportunities would get a boost. It would increase the scope of cooperation between India and EBRD through co-financing opportunities in manufacturing, services, Information Technology, and Energy.
EBRD’s core operations pertain to private sector development in their countries of operation. The membership would help India leverage the technical assistance and sectoral knowledge of the bank for the benefit of the development of private sector.
This would contribute to an improved investment climate in the country. The membership of EBRD would enhance the competitive strength of the Indian firms, and provide an enhanced access to international markets in terms of business opportunities, procurement activities, consultancy assignments etc.
This would open up new vistas for Indian professionals on the one hand, and give a fillip to Indian exports on the other. Increased economic activities would have the employment generating potential. It would also enable Indian nationals to get the employment opportunity in the Bank.
The European Bank for Reconstruction and Development (EBRD) is an international financial institution that supports projects in over 30 countries, from eastern Europe to central Asia and the southern and eastern Mediterranean. Investing primarily in private sector clients whose needs cannot be fully met by the market, the EBRD promotes entrepreneurship and fosters transition towards open and democratic market economies.
The mandate of the EBRD stipulates that it must only work in countries that are committed to democratic principles. Respect for the environment is part of the strong corporate governance attached to all EBRD investments.
The EBRD provides project financing for banks, industries, and businesses, both new ventures, and investments in existing companies. It also works with publicly owned companies, to support privatization, restructuring state-owned firms and improving municipal services. It uses a close relationship with governments in the region to promote policies that will bolster the business environment.
The EBRD is owned by 65 countries and two intergovernmental institutions: the European Union and the European Investment Bank (EIB).
The powers of the EBRD are vested in the Board of Governors to which each member appoints a governor, generally the minister of finance. The Board of Governors delegates most powers to the Board of Directors, which is responsible for the EBRD’s strategic direction. The President is elected by the Board of Governors and is the legal representative of the EBRD. Under the guidance of the Board of Directors, the President manages the EBRD’s work.
India’s membership opens up further joint investment prospects in markets such as Central Asia, Egypt, and Jordan