EU-Armenia SME Fund to receive further funds

By Loretta  Martikian

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  • EU-Armenia SME Fund raises further funds to support Armenian SMEs
  • Increase in funding to boost equity investments in Armenia’s private sector
  • EBRD and EU expect additional contributions to strengthen economic development

The EU-Armenia SME Fund, a private equity fund managed by Amber Capital Armenia and supported by the European Union (EU) and the European Bank for Reconstruction and Development (EBRD), is to receive additional funding from a number of partners, increasing its size to US$ 50 million.

The fund has been operating since January 2020 with investments from the EU, the EBRD, Amundi-ACBA Asset Management, the Hirair and Anna Hovnanian Foundation and the investment team of Amber Capital Armenia. It has since raised further capital from the Armenia National Interests Fund, C-Quadrat Ampega Asset Management Armenia, the Dutch Entrepreneurial Development Bank (FMO) and the government of Armenia.

The fund aims to become the leading equity investor in Armenia. Through its investments, it will seek to boost the competitiveness of small and medium-sized enterprises (SMEs) across the country, also by enhancing their corporate governance and transparency and helping them to internationalise while having a positive, sustainable impact on the domestic economy.

The fund is currently exploring investment opportunities in key sectors of the Armenian economy, including renewable energy, information technology, high-tech agriculture, manufacturing, tourism, healthcare and textiles. It has made two investments to date, providing capital and fostering improvement in governance standards and financial reporting. The Fund works closely with the EU-supported EBRD Advice for Small Businesses programme, which aims to enhance the investment readiness of SMEs and to promote their competitiveness.

The fund’s investments are expected to support the sustainable growth of investee companies, increase efficiency, reduce leverage and decrease their cost of debt. The fund’s involvement is expected to act as a catalyst for the development of local capital markets, by introducing listing prerequisites such as audited financial statements and corporate governance standards and by helping companies to grow.

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