India becomes 69th member of Europe's EBRD Bank

India’s membership will pave the way for more joint investment in EBRD regions.

Shareholders of the European Bank for Reconstruction and Development (EBRD) have agreed to India becoming the Bank’s 69th member, setting the stage for an increase in joint investment with Indian companies in the EBRD’s regions.

The Indian government applied for EBRD membership on 18 December 2017, saying the step would benefit both the Bank and India. India will take a shareholding in the EBRD but it will not be a recipient of EBRD financing. The EBRD’s Board of Governors, which represents all of the existing shareholders, voted in favour of India’s application.

With India’s impressive economic growth over the years and enhanced international political profile, it was considered appropriate that India should expand its presence on the global developmental landscape beyond its association with the Multi-lateral Development Banks (MDBs) such as the World Bank, Asian Development Bank and African Development Bank. The decision to join the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB) was taken earlier in this backdrop.

“This is an important step in the relationship between the EBRD and India, allowing us to build further on already very close ties.” – Suma Chakrabarti, President, EBRD.

The EBRD has long worked with top-class Indian companies on investments in the EBRD’s regions, which comprise 38 economies across three continents. The Bank has cooperated with Indian enterprises on joint projects worth nearly €1 billion, including investments with Tata, SREI and Jindal.

Impact:

• Membership of EBRD would enhance India’s international profile and promote its economic interests. 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 total value of joint India-EBRD investments in EBRD economies currently stands at €982 million, with the majority of the transactions in the private sector.

The EBRD also works closely with leading Indian chambers such as the Confederation of Indian Industry, and the Associated Chambers of Commerce and Industry of India. It recently signed a Memorandum of Understanding with the Federation of Indian Chambers of Commerce and Industry.

In 2017, the EBRD signed an accord to strengthen ties with the International Solar Alliance, which was launched during the 2015 UN Climate Change Conference in Paris at the initiative of Indian Prime Minister Narendra Modi and former French President François Hollande as a platform for cooperation among solar resource-rich economies.

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Also published on InfraStory.com