INTERVIEW: Eurasian Development Bank seeks to build funds, links
2010 is an important year for the Eurasian Development Bank (EDB), according to its chairman Igor Finogenov. The EDB plans to grow its investment portfolio by over 50% and take in new members, and is managing the Eurasian Economic Community's (EurAsEC) $10bn anti-crisis fund.
In addition to economic development, the bank is helping to rebuild the links between its member countries that date back to the
Established in January 2006, today the bank has four members. In addition to founders
The bank currently has a $1.3bn investment portfolio, which it plans to increase to $2.1bn by the end of the year. Its focus is on projects with a development effect that contribute to integration within the
The EDB's pan-regional presence has given it the scope to act in sectors such as energy and transport where it can take advantage of existing connections and build new links between member countries.
The energy sector, for example, has been one of the main areas of activity for the EDB. Projects in this sector include funding the construction of a new generating unit at
The interconnection of Eurasian power systems has had benefits across the region, points out Finogenov, citing the example of the north
Cross-border cooperation could also help
Other priority sectors for the bank include transport infrastructure, the high-tech and innovative industries, the agro-industrial sector, and the financial sector.
To fund its work, the bank carried out a successful $500m Eurobond issue in 2009. "We may consider a further issue this year, but this would depend on certain criteria," explains Finogenov. "First, we may consider issuing bonds in local currencies, because the currency risks when bonds are issued in foreign currencies are pretty high. We will monitor the situation carefully and will do our best to ensure that the state debt of our member countries does not grow as a result of any bond issues we decide to undertake. Second, we will look at the cost of the resources, because as a development institution we are financing infrastructure projects that need long-term, cheap resources."
Since the onset of the international economic crisis, the bank has responded by developing a special programme for operating under crisis conditions. "We review our investment portfolio and the programmes that are being considered for financing, we rejected some projects and changed the structure of others. As a result, we have not had any losses. In future, we will continue to very carefully monitor the economies of our member countries," says Finogenov.
In 2009, the EDB was appointed as manager of the EurAsEC anti-crisis fund, which, Finogenov says, will involve a huge amount of work this year. The bank is currently working to set out regulations for the fund's work. Rules for issuing finance to countries have already been approved, and rules for investment credits will soon be approved. The first applications to the fund are expected in the very near future. "The crisis taught serious lessons to every EDB member country, namely that the economic structure does not provide for sustainable development. This has taught us to work intensively to improve the economic structures in our member countries.
"The pace of recovery from the crisis has been pretty high, but this doesn't mean we can relax - we need to work," he adds.