Western Balkans SME Platform: ENEF

Project Description

The EBRD is considering participating alongside other investors in the Western Balkans SME Platform (the “Platform”). It is an initiative devoted to providing equity capital for innovation and expansion to SMEs in the Western Balkans. The Platform will have an initial total contribution of up to €141.2 million.

The EU, the European Investment Bank (“EIB”) and the European Investment Fund (“EIF”) and potentially other players such as bilateral donors, development agencies and countries of operations will also participate in the Platform as investors.

The Platform will have two funds: one for private equity and another for venture capital. There will be also a guarantee facility and a technical cooperation facility.

Transition Impact

The Platform is expected to generate transition impact in the form of:

1) Increasing the availability of private equity and venture capital financing available to local SMEs and demonstrating optimal financing structures in this otherwise underserved segment.

2) Setting standards for business conduct in terms of adopting appropriate financial reporting systems, environmental and health and safety standards, corporate governance systems, etc.

3) Transfer of skills – especially when it comes to strategic planning, value creation and institutionalization of the SMEs.

4) Market expansion – by supporting the development of a proper environment for venture capital and private equity investment in the Western Balkans.

The Client

Local SME in the Western Balkans will be eligible for financing through the Platform. They will be able to apply for private equity and venture capital funding from the two funds under the Platform or for a guarantee to support their borrowing from local commercial banks.

EBRD Finance

• up to €30 million in the form of an equity contribution to the Enterprise Expansion Fund (“ENEF”). The Bank will also act, through its Local Enterprise Facility (“LEF”) Management Team, as the Investment Advisor for ENEF with the objective of originating, structuring and executing investments;
• up to €5 million in the form of an equity contribution to the Enterprise Innovation Fund (“ENIF”) (representing approximately 14% of its capital). ENIF will be managed by an independent fund manager;
• up to €55 million in the form of a co-financing line (through LEF) to be associated to ENEF’s prospective investments, to increase the overall impact of the fund across the Region.

Financing for the Platform will be also provided from other IFIs, the EU and other stakeholders.

Project Cost

> €140 million

Environmental Impact

The platform itself is treated as a framework project and hence no categorisation is made. However the ENIF will be treated as an FI project while sub-projects funded through the ENEF will be screened and categorised on a project by project basis.

For the ENIF the Bank will agree a set of environmental and social due diligence procedures in line with Bank requirements to ensure that the screening of sub-projects is undertaken in accordance with PR9. The Fund Manager will also need to ensure that human resource management is undertaken in accordance with PR2.

For the ENEF, sub-projects will be categorised and appraised on a case-by-case basis. Independent environmental studies will be carried out when necessary, with assistance from external consultants, to fully understand all environment-related liabilities and environmental risks associated with a company’s operations, as well as to develop and agree an environmental action plan as required. Clients will be required to comply with national and EU standards for environment, health and safety and provide the Bank with an annual environmental report on environmental, health and safety issues.

Technical Cooperation

None.

Company Contact

Claudio Viezzoli, Director Western Balkans
Email: viezzolc@ebrd.com

 

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