CAIRO, 3 October 2003 — The European Investment Bank is adopting a “more risk-taking attitude” as it promotes private-sector investment and jobs in the Middle East, an EIB executive said yesterday.
“We have from the European Commission some funds to go into risk capital,” Vice President Philippe de Fontaine Vive said during a visit to Egypt to inaugurate the EIB’s first office in the region.
“This has so far not been used a lot because it’s quite new and all of that is quite risky,” he told AFP after talks with Egyptian officials, including Prime Minister Atef Ebeid and Finance Minister Medhat Hassanein.
The EIB, which is the European Union’s long-term financing institution, does have a Tunisian partner, Tuninvest, through which it has invested in higher-risk projects such as launching a small airline, Nouvelle Air.
“We are working with (Tuninvest) very successfully in Tunisia and we are expanding this in the whole Maghreb (North Africa) region, and we want to go further, particularly in Egypt and the Mashreq (Middle East) region,” he said.
In the French city of Marseille in April, De Fontaine Vive signed with French banks a new venture capital fund worth 25 million euros ($28.5 million), Averroes Finance, which will consider opportunities on both sides of the Mediterranean.
He said he discussed with Hassanein the possibility of using Averroes funds for venture capital projects in Egypt.
EIB, long acting like a mutual bank in the region by taking a small administrative margin on top of borrowing costs, is at the same time mulling a risk-pricing system adapted to prospective firms on a case-by-case basis. He said the Luxembourg-based EIB would seek approval from its shareholders for such an approach in the region.
In the broader lending picture, De Fontaine Vive said talks with Egyptian officials have focused on how the EIB could help Egypt expand export-based industry, such as in natural gas projects.
Jane Macpherson, head of the EIB’s Middle East department, told reporters here Wednesday evening the bank would be “active in lending” in Egypt’s oil and gas sector, as well as in transportation and agriculture.
Speaking at an investment conference here last month, Prime Minister Ebeid said “Egypt considers itself the backyard of Europe,” highlighting its ability to supply European markets fruit and vegetables as well as natural gas.
The inauguration of the Cairo office comes a year after the EIB launched the Facility for Euro-Mediterranean Investment and Partnership (FEMIP), which seeks to boost lending to two billion euros ($2.28 billion) annually by 2006.
