European Fund for South East Europe (EFSE) II

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The EBRD is considering up to EUR 30 million investment in senior A-shares of the European Fund for Southeast Europe (EFSE) comprising two equal tranches of EUR 15 million each. EFSE provides medium to long term funding to commercial banks, non-bank microfinance institutions and other financial institutions for on-lending to micro, small and medium-sized enterprises (MSMEs) as well as for housing and rural finance. The EBRD investment will support the ongoing lending activities of the Fund. The transition impact of the proposed investment will arise mainly from the following two aspects: (i) Support for markets: The financial resources available to MSMEs and farmers have become increasingly constrained in the current environment. The EBRD facility will increase the funding available to the banks and MFIs, partner lending institutions of the Fund, which will be then on-lent to MSEs for their working capital and investment needs; (ii) Commercial mobilisation: Commercial financing is rarely available to local institutions, especially in present economic environment, due to perceived high risks. Investment in A-share of the Fund will create additional cushion for private noteholders providing further comfort for investment. EFSE was established in December 2005 to support MSME and housing finance in Southeast Europe. The Fund’s concept was developed by the European Commission and bi-lateral agencies, and has been implemented by KfW. EFSE has a tiered structure and is funded by public agencies, IFIs and private investors. With investment portfolio of EUR 559 million to 56 financial intermediaries, EFSE is the world’s largest microfinance fund. EFSE is managed by Oppenheim Asset Management Services S.a r.l. Up to EUR 30 million, comprising two equal tranches of EUR 15 million each. Up to EUR 30 million. tba None Holger Christ E-mail: Holger.Christ@oppenheim.lu