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EBRD, IFC and DEG invest in Small Enterprise Assistance Fund for FYR Macedonia
The European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and Germany’s Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) have agreed to establish the first equity fund in the Former Yugoslav Republic of Macedonia.
The fund comprises the first investment of its kind in the country, with a focus exclusively on assisting small and medium-sized enterprises (SMEs). The Small Enterprise Assistance Fund (SEAF) Macedonia LLC, a limited liability company under Delaware (USA) law, will total US$ 13 million (EUR 12.74 million). US$ 4 million (EUR 3.92 million) of this total has been committed by the EBRD while the IFC and DEG are committing US$ 2.5 million each (EUR 2.45 million). US-AID, the United States Government Aid Agency, has provided SEAF with US$ 4 million in capital and US$ 1 million in grant technical assistance funding.
SEAF-Macedonia LLC will be managed by the Small Enterprise Assistance Funds (SEAF), a Washington-based not-for-profit organisation that manages funds established to provide equity, quasi-equity and technical assistance to SMEs. The fund will invest in companies with strong growth potential, which are locally owned or soon to be privatised. Targeted sectors will include agribusiness, food processing, tourism, light manufacturing industries and community services.
"The World Bank Group, through this IFC investment, is supporting the dynamic small and medium-sized enterprise sector in a challenging environment at a difficult moment in the region’s history. It reflects the World Bank’s unwavering support for the Balkans, and is part of our commitment to dedicate significant time and effort to the rehabilitation of the region in its post-conflict period. We also expect this project to encourage further investment in both the country and the region as a whole," said James D Wolfensohn, President of the World Bank Group.
"Promoting local small and medium-sized enterprises is vital to kick start the economic recovery not just of FYR Macedonia but of the Balkan region as a whole," said Horst Köhler, President of the EBRD. "Small and medium-sized businesses are the engine of economic recovery. But equity for these businesses is hard to raise in the country, especially in the wake of the Kosovo crisis. This fund is a good step forward. As a joint project with the IFC and DEG, today’s agreement also demonstrates the value of institutions working together as investors."
"With this participation, DEG is helping to revitalise the Macedonian economy, a top priority particularly in view of the influx of refugees," said Andreas Zeisler, Senior Investment Manager of DEG.
The mission of the IFC, part of the World Bank Group, is to promote private sector investment which will reduce poverty and improve people's lives in developing countries. The IFC finances private sector investments in the developing world, mobilises capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
World Bank on the internet: www.worldbank.org
IFC on the internet: www.ifc.org
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