SKOPJE, FORMER YUGOSLAV REPUBLIC OF MACEDONIA
,
July 20, 1999
— 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 (€12.74 million). US$4 million (€3.92 million) of this total has been committed by the EBRD while the IFC and DEG are committing US$2.5 million each (€2.45 million).
SEAF-Macedonia LLC will be managed by the Small Enterprise Assistance Funds (SEAF), a Washington-based non-profit organization 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 privatized. Targeted sectors will include agribusiness, food processing, tourism, light manufacturing industries and community services.
James D. Wolfensohn, President of the World Bank Group, who signed for IFC, said "Through this IFC investment, the World Bank Group 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."
"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 acquire 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 revitalize 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, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
The EBRD was established in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with €20 billion in authorized capital. As at 30 June 1999, the EBRD had signed 108 projects, with a total Bank commitment of €2.5 billion, in the six countries of the Balkan region: Romania, Bulgaria, FYR Macedonia, Bosnia and Herzegovina, Albania and Croatia.
