The European Bank for Reconstruction and Development (EBRD) has announced a comprehensive conflict response package aimed at supporting economies and clients affected by the ongoing war in the Middle East, along with neighbouring countries experiencing wider economic spillover effects. The initiative is designed to address both immediate pressures and longer-term development challenges in a region facing heightened uncertainty.
The situation across the region remains highly fluid, and the economic consequences are already becoming visible. Many of the EBRD’s economies of operation are experiencing disruptions in trade flows, volatility in energy and commodity markets, weakening investor confidence, and rising costs for households and businesses.
Although the full scale of the impact will depend on how the conflict develops over time, the current trajectory suggests continued strain on both public and private sectors across multiple countries. The EBRD has identified a group of economies that are directly affected by the conflict. These include Iraq, Jordan, Lebanon, and the West Bank and Gaza.
Alongside these, the bank also plans to support neighbouring countries that are experiencing secondary or spillover effects, including Egypt, Türkiye, Armenia, and Azerbaijan. These countries are closely linked through trade, energy networks, labour markets, and regional financial systems, which makes them particularly vulnerable to shocks originating in the conflict zone.
Under this new framework, the European Bank for Reconstruction and Development aims to deploy up to €5 billion in investments in 2026 across the affected economies. The bank has clarified that the scale and timing of investment will remain flexible and demand-driven, reflecting the unpredictable nature of the crisis and the evolving needs of individual countries and sectors.
According to EBRD President Odile Renaud-Basso, the institution is positioning itself to act countercyclically during a period of heightened uncertainty. She noted that the bank is prepared to step in where other investors may reduce exposure, while still maintaining strong financial discipline and sound banking principles. The overarching goal is to ensure continuity of support to economies, businesses, and communities during a period of disruption.
The response strategy is structured in two phases. The first phase focuses on immediate stabilization and relief. This includes supporting economic activity, strengthening financial sector stability, and ensuring that essential services such as energy supply, public utilities, and basic infrastructure continue to function.
The second phase is oriented toward recovery and long-term resilience, with an emphasis on rebuilding economic capacity, strengthening institutions, and promoting sustainable growth pathways. Energy security is a central pillar of the EBRD’s response. In the short term, the bank plans to provide liquidity support to energy utilities that are under financial pressure due to market volatility and supply disruptions.
At the same time, it will support longer-term investments aimed at creating more diversified, resilient, and locally anchored energy systems. This dual approach is intended to reduce vulnerability to external shocks and improve long-term energy stability across the region. Support for state-owned enterprises will also continue, particularly in sectors that are critical for public welfare.
The goal is to ensure uninterrupted delivery of essential goods and services while simultaneously advancing reform efforts that improve governance, transparency, and operational efficiency. These reforms are expected to play an important role in strengthening economic resilience over time.
In the private sector, the EBRD will focus on helping companies manage disruptions in energy markets and agrifood value chains, which have been particularly affected by rising costs and supply chain instability. The bank will provide working capital and liquidity support to help firms maintain operations during periods of volatility.
As part of this approach, the EBRD has already approved support for Lebanon’s leading retail chain, reflecting its commitment to sustaining essential commercial activity. Beyond immediate financial interventions, the bank will also prioritize investments that strengthen infrastructure, improve trade routes, enhance food security, and support digital transformation.
These areas are seen as critical for restoring economic connectivity and enabling long-term growth in affected regions. A strong focus of the initiative is also placed on people and social resilience. The EBRD aims to protect employment, improve access to finance, and ensure continuity of essential services, particularly for vulnerable populations who are disproportionately affected by economic shocks. Human capital resilience is viewed as a key foundation for recovery and long-term stability. In addition to investment activities, the EBRD will expand its policy engagement and advisory support.
This includes technical assistance for governments, regulatory guidance, and capacity building for small and medium-sized enterprises. The bank will also coordinate closely with international partners, including governments, donors, and other multilateral and development finance institutions, to maximize the effectiveness of the overall response and mobilize additional resources where needed.
The EBRD has emphasized that it will draw on its extensive experience in the region. Since beginning operations in the southern and eastern Mediterranean in 2012, the bank has invested more than €26.5 billion across hundreds of projects. In Türkiye alone, it has committed over €23 billion since 2009, largely focused on private sector development. This track record, the bank notes, positions it to respond quickly and effectively in times of crisis while continuing to support long-term economic transformation.
