European Fund for Southeast Europe IV/V

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This is a PSD disclosure for Projects 47357/47358. The EBRD is providing an operation in favour of the European Fund for Southeast Europe (EFSE or the “Fund”), an investment company with variable capital (“SICAV”) incorporated in the Grand Duchy of Luxembourg. The operation will consist of the investment of EUR 20 million in B shares and EUR 20 million in A shares (or the USD equivalent amount thereof) of the Fund. The operation will enable the Fund to continue providing medium to long-term funding to qualified financial intermediaries, for on-lending to micro, small and medium-sized enterprises (“MSMEs”) and for rural, housing and agricultural finance in Southeast Europe (SEE) and the European Neighbourhood Region (ENR). Transition Impact of the proposed investment will derive from: (i)         Increased financial intermediation and improved access to finance: The proposed investment will continue support EFSE as a useful vehicle for financing MSMEs through financial intermediaries in the SEE and ENR. (ii)        Support to markets: The investment will help the Fund attract new commercial and private funding with a focus on MSME lending by helping maintain the cushion for private note holders and provide comfort for their investment. (iii)       Enhancing business standards and practice: EFSE’s technical assistance is tailored to the specific needs of partner institutions and will contribute to the improvement of corporate governance, business practices, and operational efficiency, which will be duplicated by other participants in the financial sector. EBRD will continue engage in dialogue with EFSE to promote local currency lending where possible. The Fund was promoted by KfW and established with the support of EBRD and other international financial institutions (IFIs) in December 2005 to provide loans to financial institutions for on-lending to MSMEs. The Fund is managed by Oppenheim Asset Management Services S.a.r.l., (OPAM), a wholly-owned subsidiary of Deutsche Bank since 2010 with investment operations delegated to Finance in Motion GmbH, Germany, (FIM), an alternative investment management company established in 2010 by development finance professionals and Sal. Oppenheim and currently managing four dedicated development funds. Investment of EUR 20 million in B shares and EUR 20 million in A shares (or the USD equivalent amount thereof) of EFSE. Total of EUR 40 million (of which EUR 20 million can be in USD equivalent amount) Categorised FI. European Fund for Southeast Europe (EFSE) is an existing client of the Bank and has environmental and social requirements in its Social and Environmental Policy dated 14 November 2008.  These policy requirements form part of its Investment Guidelines and are consistent with EBRD and other IFI shareholder E&S policies. EFSE is implementing the E&S requirements contained in the Fund's Investment Guidelines in a satisfactory manner. EBRD also has direct exposure to many of the institutions which have received financing from EFSE and who are required to implement the relevant EBRD E&S requirements.  Many of these have received ES due diligence training from the EBRD. All of the EBRD’s local partner lending institutions (PLIs) have provided satisfactory annual reports to the EBRD on implementation of the E&S requirements. None. Sylvia Wisniwski, Managing Director Finance in Motion GmbH Theodor-Stern-Kai 1, 60596 Frankfurt/Main, Germany t: +49 (0) 69 977 876 50-50 f: +49 (0) 69 977 876 50-10 s.wisniwski@finance-in-motion.com http://www.finance-in-motion.com