EBRD makes a case for multiple multilateral banks with diverse approaches

The European Bank for Reconstruction and Development or EBRD has made a strong case for multiple multilateral banks with different approaches that complement each other.

The London-based multilateral lender is also eyeing deepening its engagement with the Indian private sector looking to invest in countries of its operation, its president Odile Renaud-Basso said.

“It is useful to have different MDBs because each one has a different perspective,” she told ET on the sidelines of the two-day G-20 finance ministers and central bank governors meeting here.


She said MDBs can be more specialised with special focus on a particular geographical area. “You can work more closely with countries and authorities and have more presence on the ground... I think different models complement each other quite well,” she said.

Her statement comes amid debate on whether there was a need for multiple development banks.

India has identified MDB reforms as a key focus area during its G-20 presidency and has tasked an expert panel headed by leading economist N K Singh and former US treasury secretary Larry Summers to look into it. The first part of the report was presented at the two-day meeting that ended Tuesday.

Renaud-Basso said different MDBs can have different approaches and perspectives.

She said India is a shareholder in EBRD and the country also has a large manufacturing sector and EBRD is keen to enhance its engagement. “We want to continue to work to enhance our partnership with India and Indian companies on investing in our countries of operation,” she said.

On MDB reforms, she said there had been a lot of work already on improving the efficiency of the use of capital of MDBs.

Renaud-Basso noted that the capital adequacy framework report, which was issued last year on how to make the best use of capital, has already triggered enhanced capacity.

“Monitoring and ensuring that this gets implemented is one of the focuses of the G-20. MDBs, like the EBRD, have taken that very seriously. We have already made some changes in our article of agreement,” she said.

She said the latest report from the expert panel is on the table and it would be interesting to get the reaction and feedback from the G-20.

She said one of the challenges that the lender faces is development of bankable projects. “That is a challenge because you need to have the right policies, the right level of ambitions of the country to be able to finance projects,” she said.