Arab Finance: The European Bank for Reconstruction and Development (EBRD) plans to deploy €5 billion in 2026 across economies impacted by the ongoing conflict in the Middle East, under a response framework targeting both directly affected countries and neighboring markets facing spillover effects, as per a press release.
The move comes as the economic and social effects of the conflict are being felt across the Bank’s regions of operation, including disruptions to trade routes, energy and commodity price pressures, and weaker investor sentiment. The scale of the impact remains uncertain and will depend on how the situation develops in the coming months.
The EBRD’s response will focus on economies directly affected by the conflict, including Iraq, Jordan, Lebanon, and the West Bank and Gaza. It will also cover a group of neighboring countries facing secondary effects, including Egypt, Turkiye, Armenia, and Azerbaijan. The total volume of investment under the response will be demand-driven.
The Bank’s approach is structured in two phases, starting with support aimed at sustaining economic activity, stabilizing financial systems, and maintaining essential services, followed by efforts to support recovery and growth.
Energy security will be part of the response, with short-term liquidity support directed at energy utilities, alongside steps to support the transition toward more diversified and resilient energy systems. Support will also extend to state-owned enterprises to ensure the continued provision of essential goods and services, while advancing reforms to improve governance.
In the private sector, the EBRD will provide working capital and liquidity support to businesses affected by disruptions in energy markets and agrifood value chains, helping them manage volatility and continue operations. The Bank’s Board has approved a project to support a retail chain in Lebanon. Over the longer term, the EBRD plans to invest in infrastructure, trade connectivity, food security, and digital solutions.
The response also includes measures to support access to jobs, finance, and essential services, with attention to vulnerable groups affected by the crisis.
Alongside its investment activities, the EBRD will engage in policy dialogue, technical assistance, and advisory support for governments, clients, and small and medium-sized enterprises.
The Bank said it will coordinate with governments, donors, and international and development finance institutions to mobilize additional support for affected economies.
The initiative builds on the EBRD’s presence in the region. Since starting operations in the southern and eastern Mediterranean in 2012, the Bank has invested more than €26.5 billion in 489 projects.
