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Moscow, Russia, December 12, 2011—
IFC, a member of the World Bank Group, and Russia’s Bank for Development and Foreign Economic Affairs, Vnesheconombank, agreed on an additional $250 million in funding for the Russian Bank Opportunity Fund, to strengthen the country's banking system and help expand access to finance for small and medium enterprises.
Under the agreement, Vnesheconombank will invest $250 million into the fund, matching an earlier commitment from IFC. Following this additional investment the fund will have commitments of $550 million. In June, IFC and Russia had pledged to invest $250 million and $50 million, respectively.
“The Russian Bank Opportunity Fund will be an effective tool to help finance the real sector of the Russian economy, including small and medium enterprises,” said Vladimir Dmitriev, Chairman of Vnesheconombank. “This initiative joins our efforts and resources to create an instrument for mobilizing new capital for Russia’s banking sector.”
Dimitris Tsitsiragos, IFC Vice President for Eastern and Southern Europe, Central Asia, Middle East, and North Africa, said: “The Russian Bank Opportunity Fund (RBOF) will expand access to finance for businesses, helping diversify Russia's economy and increasing employment, especially in Russia’s more remote regions. We welcome Vnesheconombank as an investor in RBOF and we hope that the fund will not only provide new capital to Russian banks, but also improve their corporate governance and operational expertise."
For most regional banks in Russia, long-term investments are still difficult to access, and constricted availability of capital narrows the banks’ capacity to finance enterprises in the real economy. A sound banking system is important for small and medium companies because they form the base of every economy in the world. In Russia, the growth of small and medium companies is especially important, as it has great potential to diversify and expand Russia’s economy.
Russia became a member and shareholder of IFC in 1993. Since then, IFC has invested nearly $6 billion in the country, including $1.5 billion in syndicated loans. It is involved in 250 projects across a variety of sectors. As of September 30, 2011, IFC’s committed portfolio in Russia stood at $2.3 billion, the third-largest country exposure for IFC globally.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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