WASHINGTON, D.C., Dec. 27 -- The International Finance Corporation (IFC) has approved US$2 million in equity financing for the Ukraine Fund, a venture capital fund targeting emerging private companies in Ukraine. This is IFC's first investment in Ukraine. The Ukraine Fund is capitalized at US$11.7 million. It is structured as a U.S. limited liability company, and is managed by Claflin Capital Management, a Boston-based venture capital group. Additional investors include the Bank of Boston, the European Bank for Reconstruction and Development, and other institutional and private investors. The Fund has already made investments in private sector companies active in the consumer market and plans to invest in enterprises that produce and distribute goods and services for export and local markets. "As we have seen elsewhere in Eastern and Central Europe, newly created private companies are the principal engines of economic growth and employment creation," said Edward Nassim, IFC Director for Europe. "This Fund rep
resents an effective way to support the sector that is most likely to contribute to Ukraine's economic development in the medium term." Through its representation on the Fund's management committee, IFC will play a continuing role in the Fund's decision-making and planning process. Ukraine joined IFC in October 1993. Since July 1992, IFC has been assisting the Government of Ukraine with small-scale privatization by designing and implementing privatization programs in eleven cities and advising central government officials. In addition, IFC has been assisting the Ukraine's State Property Fund in implementing pilot privatizations of medium and large enterprises. To date, two privatization transactions have been completed and the privatization of two large companies is underway. IFC, a member of the World Bank Group, is the largest multilateral source of loan and equity financing for private sector projects in developing countries. (30)