FEAS Yearbook FEAS Yearbook 2022 | Page 89

Yearbook 2022

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EBRD green economy financing reached 50 per cent of total business volume in 2022, at more than €6 billion against the previous record number set in 2021 of €5.4 billion. While the 2022 green economy financing figure is slightly lower in percentage terms than 2021’s 51 per cent, it meets a second EBRD pledge to make at least half its financing green by 2025 for the second year running. The Bank, which is strongly committed to the global climate agenda, also announced in December that it had fulfilled its pledge to align all its activities with the goals of the Paris Agreement on limiting climate change. The share of gender-tagged projects rose to 37 per cent of the total, above the target and above 2021’s 35 per cent. Along with green and digital, gender is one of the EBRD’s three strategic priorities. The Bank aims to integrate gender equality components into at least 40 per cent of its operations by the end of 2025, and a quarter of EBRD annual investments will fund inclusion projects. The total number of projects financed by the EBRD in 2022 rose to 431 from 413 in 2021. And 2022 saw a record volume of investment in the private sector, of close to €10 billion.

In addition to supporting countries of operations in tackling the crisis and its implications via direct and indirect investments, policy activity is also essential to support the Bank’s overall strategic directions and systemic impact. There are existing areas where the Bank’s policy expertise is strong and will remain relevant. One of the most important is developing local capital markets, advancing corporate governance and, more generally, improving the investment climate. To build a resilient and healthy economy the support of a strong local capital market is indispensable. Stock exchanges are the key part of any capital market infrastructure and should play a leading role in capital market development. The EBRD supports the development of local stock exchanges at all stages from strategic planning through improving the regulatory, trading and post-trading infrastructure to product development, capacity building and/or to regional expansion. In recent years, on macro level the EBRD supported, among others, Croatia, Armenia, Poland, Uzbekistan and Georgia to prepare a mid-term public capital market and stock exchange development strategy.

Despite the progress made in local capital market development, significant challenges remain to tackle in the coming years. Market fragmentation is still one of the most critical barrier of market development. Running stand-alone value-chains in every single country with different and sometimes non-compatible operational standards and practices hampers cross- border integration and the evolution of a regional pool of liquidity. The key to unlock the door to the next development levels is in cross-border cooperation. Connecting the neighbouring markets and building a unified regional investment pool could boost the market growth and improve the market resilience towards external shocks.