Regional Venture capital investment programme

approved

Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed The EBRD approved allocation of EUR 100 million to a venture capital investment programme (VCIP) with a view to investing in 10 – 20 companies with high quality entrepreneurs and management teams to support development of innovative technologies and business models so as to move from product development to commercialisation, or from early revenue stage to larger market opportunity stage.  Investments were to take place in technology sectors including software and web services, semiconductors and materials, communications, mobility and media, and clean tech, in Poland, Estonia, Bulgaria, Ukraine and Turkey. Project Objectives The transaction was intended to target innovative and high growth SMEs in the region, to channel important venture capital support and interest toward technology investment.  It was anticipated that this would allow for development and maintenance of an extensive network of relationships with global and local venture capital investors to promote technology investments. Transition Impact The transaction was anticipated to derive transition impact form a number of factors including market expansion in entrepreneurial areas such as technology, demonstration of new mechanisms for financing activities, and the transfer of skills form qualified co-investors into small enterprises in the Bank’s regions of operations.  These benefits were expected to have second order effects such as attraction of qualified investors, market restructuring to reduce perceived risk of venture capital activity, and expansion of the market for relevant talents. Additionality The principal objective of the VCIP programme was to support the development and commercialisation of technology innovation, and promotion of venture capital investments in the Bank’s regions of operations, where financing options for technology companies were then scarce. VCIP investments targeted innovative and high-growth SME-sized companies, to fill the venture capital equity gap.  The programme was understood to be additional in that it would provide local co-investor support to global venture capital investors, and augment the local venture capital syndication market. Environmental and Social Summary The project was given environmental category C, as there were no environmental or social issues directly associated with it.  It was agreed that each proposed investment submitted to SBIC would be reviewed for environmental risks and impacts, though few impacts were anticipated.  Notwithstanding the low risk, an annual environmental and social report was prepared annually. Technical Cooperation n/a - none