IKB CO-FINANCING RISK PARTICIPATION AGREEMENT

Location:

Regional

Project number:

19060

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

C

Target board date:

13 Mar 2001

Status:

Completed

PSD disclosed:

27 Feb 2001

Project Description

The project would consist of an un-funded risk participation facility provided by the EBRD to IKB Deutsche Industriebank AG, a bank incorporated in Germany.
By freeing up IKB‘s risk capital, the operation would efficiently support the financing of SMEs on a larger scale through a wholesale vehicle. Facilitating the entry of middle-tier foreign companies can promote growth of SMEs in the local economies through the creation of joint ventures and networks of production outsourcing, sub-contracting and distribution.
 

Transition Impact

The proposed facility would effectively support the financing of German-owned SMEs operating in the region by capitalising on IKB’s sector experience and strong project pipeline.
 
Through economic interaction with local suppliers and distributors, this project is expected to have an indirect effect on the local SME sector. The unavailability of long-term finance for SMEs is a severe constraint that this facility aims to ease.

The Client

IKB is the leading commercial provider of long-term, fixed rate investment finance to small and medium-sized enterprises (SMEs) in Germany with an impressive track record.
 
Under the un-funded risk participation facility, the EBRD would risk-share a portion of IKB’s loans to SMEs which are legal entities based in the Czech Republic, Hungary, Poland, the Slovak Republic and Slovenia and either fully or majority owned by German companies. The Bank would essentially rely on IKB’s proven appraisal and monitoring procedures, taking direct exposure to its SME borrowers.

EBRD Finance

Under the facility, the EBRD would risk-share 35 per cent of the IKB loan pool, consisting of eligible, existing and future loans extended by IKB between 1996 and the end of the commitment period (i.e. two years after the signing of the Risk Participation Agreement).
 
The proceeds of the loans risk-shared by the EBRD must be used by the German SME borrowers for the financing of acquisition, expansion and/or modernisation investments and related working capital needs in the region.

Project Cost

The IKB loan pool will be a principal amount of up to EUR200 million, out of which the Bank would risk-share 35 per cent, i.e. up to EUR70 million under the facility.

Environmental Impact

Projects submitted for inclusion in the loan pool will undergo an environmental appraisal based on the EBRD’s Environmental Procedures for Banks. The appraisal will confirm, among other things, that projects comply with national requirements for environment, health and safety and do not involve activities included on the Bank’s Environmental Exclusion List.

Technical Cooperation

None.

Company Contact

 

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

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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.