- CDP and EBRD invest €38 million in ENEF II, improving SME access to finance
- ENEF II to extend up to €100 million in finance to local firms to 2027
- CDP and EBRD sign MoU to deepen cooperation in key areas of interest
The European Bank for Reconstruction and Development (EBRD) and Italy’s Cassa Depositi e Prestiti (CDP) have reaffirmed their commitment to supporting small and medium-sized enterprises (SMEs) and mid-cap companies in the Western Balkans through the Enterprise Expansion Fund II (ENEF II).
ENEF II is an investment fund advised by the EBRD, which will extend development and expansion capital to local companies committed to improving their environmental, social and governance (ESG) performance in the six Western Balkan economies of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia.
This joint engagement through ENEF II is an important step in cementing the partnership between the EBRD and CDP. It is the first formal cooperation between the two institutions. CDP and EBRD have each invested €19 million in ENEF II, which makes them the fund’s largest investors alongside the European Union (EU), which also invested €19 million, and Germany’s KfW, which committed €10 million. Other financial institutions with interests in the region are also likely to invest in ENEF II, which is expected to deploy up to €100 million.
ENEF II comes at a critical time for local businesses in the Western Balkans, with the spill-over effects of the Covid-19 pandemic, the war on Ukraine and the subsequent economic downturn likely to impact smaller companies the most. ENEF II will enable crucial access to finance for high-growth SMEs, including tailored financing solutions, such as equity investments.
The fund will also help build SME resilience by embedding high ESG standards in each investment, building on the success of ENEF I. As the Western Balkans progress towards EU accession, economic development and private-sector support remain key priorities for the region’s economies, the EBRD and CDP.
To mark the strengthening of the relationship between the EBRD and CDP, EBRD President Odile Renaud-Basso and CDP CEO Dario Scannapieco signed a new memorandum of understanding (MoU), committing to further cooperation and partnership. The MoU affirms the institutions’ aim of continuing to collaborate in key priority areas, from developing SMEs in the economies where the EBRD operates, including through the replication of the ENEF model in other countries and regions, to promoting climate finance projects together.
As Italy is one of the main trading partners and investors in the Western Balkans, the EBRD and CDP will also work together to strengthen linkages between Italian and local companies through targeted business development and matchmaking initiatives, with a particular focus on SMEs – a key driver of both the Italian and the Western Balkans economies.
On the partnership, EBRD President Renaud-Basso said: “I’m delighted to sign this MoU with CDP, which reaffirms our joint priorities in promoting SME development and green, low-carbon and climate-resilient projects, while maximising synergies through cooperating with Italian companies investing in the economies where we operate and the economies of the Western Balkans. Our engagement through the tailored financing instrument ENEF II will help boost private-sector innovation and sustainability efforts, which are essential for economic resilience.”
CDP CEO Scannapieco said: "The renewal of the MoU with the EBRD reaffirms the importance of bilateral collaboration between national and international development finance institutions. Working jointly on sustainable business growth projects and climate finance initiatives amplifies the scope of resources available, multiplying the impact that can be generated in key regions for Italy, such as the Western Balkans and the southern and eastern Mediterranean."
The EBRD has a long history of SME development in the Western Balkans, providing indirect and direct finance, as well as advisory support to small businesses for over 20 years. The first ENEF fund was launched in 2014 and supported 16 high-growth local companies, extending over €67 million in equity, quasi-equity and tailor-made debt financing, in line with the objectives of the EU’s Western Balkans Innovation Facility.
ENEF’s work has been complemented by the EBRD’s Advice for Small Businesses (ASB) programme, which has extended critical technical assistance in the form of consultancy projects and training, improving access to know-how for more than 10,000 SMEs across the region, including 100 per cent of the companies in which ENEF invested.
Italy is one of the largest sources of foreign direct investment in the economies where the EBRD invests. The value of joint Italy-EBRD investment stood at €25 billion as of end November 2022.
CDP is Italy’s national promotional and financial institution for international development cooperation and has been supporting the Italian economy since 1850. It is engaged in accelerating the industrial and infrastructural development of the country, so as to contribute to its economic and social growth.
In the area of international cooperation and development finance, CDP funds projects with a high impact on sustainable development and climate change in emerging markets and developing countries. According to its 2022-24 strategic plan, it expects to mobilise a total of €128 billion in investments by 2024.
To date, the EBRD has invested nearly €16.5 billion in the Western Balkans and continues to invest more than €1 billion there each year.