SEAF CEE Growth Fund

completed

Summary Of Project Information (SPI)Project Name:Small Enterprise Assistance Fund (SEAF), Central and Eastern Europe (CEE) Growth FundRegion:Central & Southern EuropeSector:Project No:009377Projected Board Date:May 16, 1999Company Name:SEAFTechnical Partner and/or Major Shareholders The shareholders of the Fund will be: EBRD (33%), IFC (17%), Calvert World Ventures Fund (3%), Marifin Capital (1.7%), other (45%). SEAF is a US not-for-profit, tax-exempt organization, is a shareholder and manager of nine for-profit SME venture capital, small business investment funds operating locally on a commercially sustainable basis. Each of SEAF’s country funds is staffed primarily by local professionals trained in business, law and/or finance, working under the direction of an experienced expatriate financial executive. SEAF employs 10 full-time staff in its Washington, DC headquarters, with more than 90 local staff in the Country Funds. SEAF country funds have made over 120 investments for a total of about US$35 million.Project Cost Including proposed IFC investment The project consist of developing a fund -- the Small Enterprise Assistance Fund (SEAF), Central and Eastern Europe Growth Fund (the "Fund"). SEAF is seeking to raise between US$20 million and US$40 million for the CEE to make second round investments, mainly in existing Country Fund clients who are beyond the incubation stage, have established a viable track record and are ready to expand their operations. IFC will make an equity investment of the lesser of US$5 million or 20% of the total capitalization of the Fund. The individual investments will range from $1 million to $3 million, with a minimum, investment of $500,000 and a maximum investment of $ 5 million, a level higher than the range for SEAF’s existing Country Funds (from $50,000 to $400,000). The Fund differs from traditional venture capital funds by targeting smaller businesses, making smaller-sized investments, using a quasi-NGO as a Fund Manager, and providing substantial post-investment business support. Location of project and Description of site The Fund will have an office in Warsaw, Poland headed by the Vice-President of the Fund Manager. Description of Company and Purpose of Project SEAF has operated successfully at the country level. The proposed project is an attempt to build on this success and to attract commercial capital for second round investments. An interest and comfort from private investors to support the initiative would be drawn from an IFC participation. Through its presence on the Investment Committee, IFC can share with the Fund its experience in project finance. IFC also can learn much from SEAF''s, five years of SME operating experience in the region, about how to deliver cost effective and high quality investments to the SME sector. The proposed project has a substantial development impact. Important impediments to the development of SME sector in CEE are lack of access to equity capital, limited availability of long-term lending, and technical training. The Fund will directly contribute to enhancing enterpreneurship and efficiency in investee enterprises by providing transfer of know-how to strengthen their competitiveness in domestic and international markets. In general, the target countries have well-educated populations with good technical skills and entrepreneurial talents. The demonstration impact of SME success stories is likely to be significant.Environmental Category and Issues This is a Financial Intermediary (FI) Type 2 project according to IFC''s environmental review procedure. The Fund will be required to comply with host country requirements, IFC environmental and social safequard policies, and , if applicable, World Bank Group environmental, health and safety guidelines. IFC will assess the Fund''s capability to carry out environmental reviews. The Fund must obtain IFC clearance prior to making any investments with IFC funds in any Category A project.The is from the InfoShop.Host country location of environmental documents:IFC/World Bank Office, Warsaw, PolandCARESBAC-Polska Office, Warsaw, PolandDate SPI sent to InfoShop:April 5, 1999“This Summary of Project Information is prepared and distributed to the public in advance of consideration of the proposed transaction by the Corporation’s Board of Directors. It is provided for the purpose of enhancing the transparency of IFC’s activities and should not be construed as presuming the outcome of IFC Board consideration.”For Additional Information contact: Corporate Relations Unit -telephone: (202) 473-7711facsimile: (202) 974-4384