Project summary document

Project description
and objectives:

In the region contemplated for the facility, some valuable medium-sized investment projects are not yet reached by, or attractive to, private equity funds or commercial banks. The Facility will address this gap by providing equity capital and mezzanine/sub-debt. These medium-sized projects will be smaller than those usually executed by the Bank directly.

Transition impact:

Although the exact transition impact is likely to vary from project to project, the Facility will likely have the strongest transition impact in the following areas:

Demonstration effects of new products and processes
The Facility is likely to support the entry of new investors into the region and the expansion of existing companies into new products and business activities. Given the fast pace of growth and development of transition economies, many of the enterprises benefiting from EBRD financing under the Facility are likely to engage in manufacturing of products not yet produced in a given country or in provision of tailored made services not available in the past. This is likely to lead to positive demonstration effects and replication by other new entrants and other companies already active in the sector.

Competition
Most of the private enterprises financed under the Facility will operate in competitive sectors. Their expansion and development of new products and services supported by the Facility will lead to increased competitive pressure on other companies operating in the sector and will spur development of markets and innovation, as well as lead to improvements in availability of goods and prices for final consumers.

Transfer of skills
The Facility will be readily available to support enterprises operating in technologically advanced sectors, leading to staff training and know-how transfers both through business contacts with suppliers and off-takers of goods and through rotation of trained staff to other companies.

Standards for business conduct
When working with locally owned enterprises, the Bank will impose conditions pertaining to disclosure and transparency standards as well as accounting and governance practices. This is likely to have direct and positive effect on a group of companies for which business standards and governance issues still remain a significant challenge.

These sources of transition impact will be verified at individual sub-project level. Transition impact will be compounded by the diversity of companies, sectors and regions the Facility will invest in.

The client:

About 15 private companies belonging to the corporate sector, i.e. general manufacturing, agribusiness, property & tourism, telecommunications, informatics & media. The Facility targets both subsidiaries of international sponsors, regional cross-border investors from the Bank’s countries of operations and locally-owned companies.

EBRD finance:

A framework financing facility of EUR 50 million for the purpose of supporting about 15 medium-sized investment projects in the defined Region. The Facility will provide between EUR 1 and EUR 10 million, representing up to 35% of project costs or the total assets of the client. The products offered under the Facility will be equity capital or mezzanine/sub-debt. The Facility will have a 5 year availability period during which proceeds from exits may be revolved, within the overall maximum commitment of EUR 50 million for the entire Facility and EUR 10 million per counterparty/client.

Total project cost:

EUR 50 million

Environmental impact:

Screened B/0. Precise due diligence requirements will be identified individually on each project within the Facility. Environmental due diligence will generally be based on desk review of sub-projects, followed, if necessary, by a field visit by an ESD specialist. .When higher risks linked to the industry/sector are identified at early stage, ESD will provide recommendations to the Team whether an external consultant(s) is required to carry out the due diligence or whether potential risks outweigh positive impacts of the project.

At a minimum, sub-projects within the Framework will need to comply with relevant national environmental, health and safety regulations and standards, particularly where these are judged to be in line with EU standards. In other cases, the Bank will consider what will be required to upgrade a project to meet EU standards and whether, therefore, it is possible to proceed with the project. Sub-projects will need to comply with national labour laws and regulations and with the Conventions of the International Labour Organisation related to child labour, forced labour and discrimination at work. Sub-projects will need to commit to and implement Environmental and Social Action Plans (ESAP) as might be required for a project. Clients will need to submit to the Bank Annual Environmental Reports on sub-projects.

Technical
cooperation:

None.

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

Company contact:

For the Facility, Mr Philippe Belot, Senior Banker, Email: belotp@ebrd.com

EBRD contact:

Philippe Belot, Operation Leader: belotp@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