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New investment fund for Uzbekistan
The first fund to target investments exclusively in Uzbekistan has been
launched with ECU 30 million from the European Bank for Reconstruction and
Development (EBRD). The ABN Amro Uzbekistan Post-Privatisation Fund, expected
to have a total capital of ECU 36 million, will further be supported with
technical assistance from the European Union's TACIS Programme.
Sven Hegstad, Director of the Early Stage Equity Team at the EBRD, said:
"While the Fund has been under preparation over the past year, the EBRD has
identified many investment opportunities in Uzbekistan through an extensive
enterprise screening process. We are confident that the Fund has a strong
potential to make an attractive rate of return."
He continued: "Uzbekistan, with a wealth of natural resources and a
well-established agricultural and light industry base, has traditionally
focused on the supply of raw materials and unprocessed goods to neighbouring
countries. It has considerable scope to develop higher value-added products
for Uzbekistan's large domestic market and those of neighbouring countries."
The Fund's objective is to assist private and recently privatised enterprises
to restructure and modernise by providing equity finance and management and
advisory support. Investments will range in size from ECU 300,000 to ECU 3
million and will not be limited to any specific sectors. The Fund's capital is
expected to be fully invested within four to five years and to have sold its
investments within 10 years.
The Fund is being managed by a consortium of companies, including ABN Amro NV,
Global Securities Inc and Sitrans Oy., which have committed to co-invest an
initial ECU 6 million, equal to 20 per cent of each investment made by the
Fund. The management office will be staffed by both expatriate and local
investment professionals in Tashkent.
To date, the EBRD has committed US$ 410.1 million (ECU 354.6 million) in
projects for Uzbekistan, and four of the investments are in the financial
sector. From the outset enterprise restructuring, including privatisation, has
been a priority sector and the Fund will complement and develop this
assistance. Investment funds of this nature have already been created by the
EBRD with support from the European Union in Russia and Kazakstan.
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