Project summary document

Project description
and objectives:

The EBRD will invest in the foundation capital of Erste Mandatory Pension Fund Management Company d.o.o. (EPFMC) for a pillar II open Erste Mandatory Pension Fund (EPF) to be established as a limited liability company in accordance with the Mandatory and Voluntary Pension Funds Act of Croatia. The operation will enable EPFMC to establish and manage a pension fund for mandatory pension insurance based on individually funded savings of insured persons in Croatia.

Transition impact:

Pension reform will have a broad impact on the Croatian economy. Successful reform will depend on the existence of a solid private pension fund management sector, on capital markets that fulfil basic conditions, such as liquidity, depth, diversity of instruments, and on reliable regulation.

There is likely to be a substantial impact on local currency savings, government finances, old age security, interest rates, securities markets, labour market, corporate governance, etc.

The proposed operation would support such reforms by focusing on the strengthening of the institutional basis for their implementation.

Being a fully commercially oriented transaction and benefiting from a strong market visibility, the project is expected to have a significant demonstration effect in other EBRD countries of operations and reinforces the Bank’s commitment to Croatia.

The client:

Erste Mandatory Pension Fund Management Company d.o.o. is a pension fund management company for a pillar II open Erste Mandatory Pension Fund to be established in Croatia.

EBRD finance:

EBRD financing will consist of:

• an equity investment in EPFMC, representing 25.1 per cent of the company’s capital and voting rights;
• the purchase of a further 3.59 per cent share in the company by 30 June 2002 to reach a total shareholding of 28.69 per cent; and
• a further capital increase pro rata to its shareholding in the company to comply with the minimum capital requirement of the Mandatory and Voluntary Pension Funds Act of Croatia.

Total project cost:

The aggregate investment is expected to be up to HRK 22 million (EUR 2.9 million). This may be higher, however, as the cost of the overall operation is based on the final number of subscriptions to the Erste Mandatory Pension Fund.

Environmental impact:

The EBRD’s Environmental Guidelines for Passive Investments will apply to this operation.

Technical
cooperation:

None.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

EBRD contact:

Josip Vukovic, Operation Leader: vukovicj@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com