The European Bank for Reconstruction and Development (EBRD) has said it is ready to invest in the Turkish northern side of Cyprus, potentially for years, if a deal to unify the divided island can be reached.
International mediators are cautiously optimistic of a deal this year, with two moderate presidents leading the two sides in Cyprus in negotiations to the reunify the island.
“Should the referendum [on a Cyprus deal] be positive then we will certainly aim to increase our investment, particularly in the north,” EBRD President Suma Chakrabarti told Reuters.
That would lead to discussions about whether the development bank would continue to invest in Cyprus beyond 2020, the deadline set when it became a ‘temporary’ recipient of EBRD support in 2014.
“It’s undoubtedly true that the north is very much under developed compared with the south and will require years of investment to catch up”, Chakrabarti said. “So we’ll have to see if Cyprus makes the case for an extension of mandate and how the shareholders will react.”
The EBRD will hold its annual meeting in Cyprus in May, so the situation is likely to be one of the main topics of discussion among the national finance ministers and central bankers, who also act as its decision-makers.