The London-headquartered European Bank for Reconstruction & Development  (EBRD) is strengthening its presence in North Africa, having signed a deal with Saudi Arabia’s Islamic Corporation for the Development of the Private Sector (ICD) to set up a $120m investment fund for small-to-medium enterprises (SMEs).

The preliminary agreement covers businesses in Egypt, Jordan and Tunisia, and will finance specific projects using methods such as equity and quasi-equity financing.

The EBRD only expanded its mandate into what it terms as the Southern and Eastern Mediterranean region in September 2012. Its expansion was due to growing demand for the bank to provide much-needed financial support to an increasingly unstable region, following the various uprisings that took place in 2011.

Since then, the bank has invested a total of €902m ($1.3bn) in the region. It has funded projects in Egypt, despite the heightened political uncertainty in the country following the removal of former president Mohamed Mursi last year.

“To date, we have signed 10 projects for an aggregate amount of €335m [in Egypt], with the main focus being on developing the private sector and entrepreneurship,” Philip Ter Woort, director of EBRD’s Egypt office, tells MEED.

With presidential elections in the North African country fast approaching, Ter Woort expects the anticipated return to stability to open up new opportunities for the bank.

“There is a sense of eagerness to restart the engine,” he says. “There are projects waiting to happen, which will mostly likely take place when the new government is announced.

“We would like to see more transactions. Once the situation has stabilised, we hope the new government will promote public-private partnerships (PPPs).”