Jean Lemierre, the EBRD president, says that he will outline initial details of a "new business model" for the bank during this year's annual meeting. The strategy will be formally put before the governors next year and will cover the EBRD's programme for the second half of the decade. But Lemierre will signal the managing board's intentions in Belgrade in what he says will represent "a major shift in the bank."
The new plan will see the EBRD place greater emphasis on equity investments and smaller projects. The bank will also encourage public-private partnership initiatives, especially in south-east Europe. In addition, the multilateral will undertake more financing in local currency.
The changes will help the EBRD as it shifts its business away from the EU accession countries and more towards south-east Europe, Russia and the CIS. The problem is that the model that the bank adopted for central Europe, which includes buying minority stakes in companies through large-scale privatizations, is less applicable in the region's poorer countries.
"The bank is doing a lot everywhere in the region but by moving further east and south east, we need to adapt, change and to create new approaches for supporting the transition to market economies," says Lemierre in an exclusive interview with Emerging Markets.
"The centre of the bank is moving," he adds. "The business model has been built mainly [based] on [the needs of] central Europe from 10 years ago. It has been developed, it has been successful, and it has helped with what we do elsewhere. At the same a shift [in strategy] has an impact on what we have to do. This movement challenges the business model of the bank."
The EBRD has already begun the process. At last year's annual meeting in London the bank announced its Early Transition Countries strategy – an initiative that emphasizes private-sector investment in the seven poorest countries within the EBRD's remit.
The strategy particularly seeks to improve banking services for micro, small and medium-sized businesses whose growth is typically inhibited by lack of access to credit. "Investing and taking risks in medium-sized companies, with the support of donors, is very efficient," says Lemierre.
At the same time, the Frenchman, who joined the bank in 2000, acknowledges that the bank's task in south-east Europe, Russia and the CIS will not be easy. "It's a new challenge and a very important one," he says.
"We know the situation [in the region] – look at the comments we have made on countries such as Turkmenistan and Belarus. We have had no hesitation in drastically reducing financings because of political reasons [such as Uzbekistan]. At the same time, we see real changes. We see changes in countries such as Ukraine, Georgia and the Balkans."