Direct Finance Framework

Location:

Regional

Project number:

47420

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

C

Target board date:

08 Apr 2015

Status:

Board Approved

PSD disclosed:

13 Mar 2015

Sub-projects signed under this framework

Project Description

The EBRD is considering streamlining its direct financing instruments for projects up to EUR 10 million by merging the following four facilities: 1) the Direct Investment Facility; 2) the Direct Lending Facility; 3) the Local Enterprise Facility; and 4) the Medium-Size Project Facilityunder the new Direct Finance Framework (DFF).
 
The framework will provide the Bank with an integrated instrument covering all its countries of operations to meet the growing business needs of local small and medium-sized enterprises currently not sufficiently supported by other financing sources. The Bank’s proceeds will be used for financing acquisitions, expansion and/or modernisation investments, efficiency improvements as well as working capital.

Transition Impact

Transition impact is expected in the following key areas:
  • Setting high standards of corporate governance, business conduct and financial reporting. Projects would help set standards ranging from financial management to energy efficiency or environmental standards. These standards would set an important example in the relevant industry or country.
     
  • Demonstration of new products and processes of restructuring of local enterprises. This will help to increase competitive pressure in the market and encourage the wider adoption of modern production technologies or management practices.

The Client

Local private enterprises operating in all EBRD countries of operations.
 

EBRD Finance

EUR 150 million (for the 12 months following the date of Board approval) to provide a wide range of flexible financing instruments (equity, quasi-equity and debt financing) to local enterprises.

Project Cost

EUR 250 million (estimated).

Environmental and social categorisation, impact, and mitigation

Sub-projects financed through this framework will be categorised and appraised on a case-by-case basis in accordance with the Bank’s 2014 Environmental and Social Policy. Where the Bank is investing in projects or companies that present a potentially higher environmental and/or social risk, commensurate studies will be carried out with assistance from external consultants to fully understand all related liabilities and risks associated with a company’s operations, as well as to develop and agree upon an environmental and social action plan as required. Further, the environmental and social due diligence undertaken on a case by case basis will look to identify and/or confirm potential environmental and social benefits to be realised through the delivery of the projects. Target borrowers/ investee companies will be required to comply with the Bank's Performance Requirements and provide the Bank with an annual report on environmental and social issues.
 
Sub-projects financed through this framework are not subject to Board approval. PSDs will not be released on a project-by-project basis unless there are judged to be significant environmental or social issues.  In such cases a PSD will be prepared and released including summary information on the sub-project’s significant environmental or social issues and agreed mitigation measures. For “Category A” projects approved under this Framework a separate PSD will be prepared in any case.  If a separate PSD is not required, the Framework PSD will be updated with information on sub-projects financed including basic information on the project name, location, sector and E&S category.

Technical Cooperation

The Direct Finance Framework will continue benefiting from Technical Cooperation funds raised for the four facilities that it succeeds.
 

Company Contact

Claudio Viezzoli
 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

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

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.