|
Regional Initiatives
EUR MM
|
Summary
Description |
Countries covered under
programme |
IFI Funding
"Quick Start"
Projects
|
Donor
Co-Finance
Needed
|
Donor
Technical
Assistance
Needed
|
Total Funding
Gap
|
| |
|
|
Com-
mitted
|
Planned
2000
|
Quick
Start
|
Near
Term
|
Quick
Start
|
Near
Term
|
|
|
1. Trade Facilitation
Programmes |
Under the TFP, guarantees are
issued to Confirming Banks taking the documentary credit risk
of Issuing Banks in the region, thereby supporting trade. It
is particularly appropriate in countries where country risk is
a constraint on confirming banks willingness to work with
local banks. Currently eight banks in the six countries are
signed into the programme. By end 2000 the number could
increase to fifteen or more with grant fund support. Under the
programme, banks at both ends of a transaction can be within
the region. |
Albania, Bosnia and
Herzegovina, Bulgaria, Croatia, FYR Macedonia, Romania |
23 |
17 |
20 |
0 |
1 |
|
21 |
|
2. Trade Insurance Programmes
(a) |
Building local institutional
capacity in the area of credit assessment and trade
procedures, improving the local environment to facilitate
trade, and assisting local implementing agencies in the early
stages of implementation. |
Albania, Bosnia and
Herzegovina, Bulgaria, Croatia, FYR Macedonia, Romania |
1 |
|
|
|
4 |
5 |
9 |
| 2.1 Political
Risk Insurance |
Donor
and World Bank funds would be placed in a trust account to
back-up insurance policies.
The facility would cover a broad range of cross-border
financial transactions. The types of risks that the facility
could cover include: Government performance risks;
inconvertibility or inability to transfer; war and civil
disturbance; other risks specific to the country (e.g. in
Bosnia and Herzegovina, the risk of a United Nations embargo
is covered). An insurance broker would be selected to assist
in the negotiation of the terms of the facility, including the
leveraging mechanism, with a syndicate of private risk
insurers, and assist in the administration of the facility. |
Albania,
Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia,
Romania |
30 |
10 |
20 |
30 |
|
|
50 |
| 2.2
Export Credit Support |
Assist
exporters in participating countries to increase their exports
through better access to financing and credit insurance.
Effective support for exports can be achieved by: (1) Export
Credit Insurance: An implementing agency (IGA) is to be set up
in each country. Sustainability would be attained by the
implementing agency entering into re-insurance/cut-through
arrangements with one of the large European based
international export credit insurers. (2) Working capital
credits for exports: The implementing agency would provide
either guarantees or funding to eligible local banks to
facilitate the provision of working capital to enterprises
engaged in export activity. Where possible funds would be tied
to specific export orders and secured by the proceeds of those
export orders. (3) Performance Bond Support: In most stability
pact countries, the undertakings of local banks as bond-giving
banks do not represent adequate security for a buyer or its
bank under a sales contract or a principal under a services or
construction works contract. The Performance Bond Support
Facility is designed to overcome this problem. |
Albania,
Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia,
Romania |
10 |
10 |
10 |
38 |
|
|
48 |
| 3.
IFC Balkan Enterprise Facility |
Managed
by IFC, and funded by IFC and the governments of Austria,
Canada, Greece, Netherlands, Norway, Slovenia, Sweden and
Switzerland, the BEF will: assist individual enterprises to
obtain expansion capital and strengthen their managerial and
technical operations, especially their capacity to implement
investments; in collaboration with the World Bank, research,
promote and support improvements in the business enabling
environment; manage and support innovative SME training and
education initiatives in collaboration with regional provate
sector service providers; and, support the gathering and
dissemination of knowledge and information relevant to the
private sector, including specific pilot Internet and
e-commerce commercial initiatives. |
Albania,
Bosnia and Herzegovina, FYR Macedonia, Kosovo Province |
|
5 |
|
|
7 |
23 |
30 |
| 4.
Small Equity Funds |
Investments
aimed at modernisation, expansion, restructuring and
development of small and medium sized private enterprises in
Bosnia-Herzegovina, through equity and quasi-equity
investments in commercially viable companies and projects. The
Fund seeks to achieve its objective by taking a significant
minority stake in the portfolio companies through negotiated
transactions while taking an active role to influence its
operations and management. |
Bosnia
and Herzegovina; under implementation in Albania, FYR
Macedonia, Kosovo Province |
7 |
11 |
5 |
|
3 |
|
-8 |
| 5.
Micro- Enterprise Banks(a) |
Set up
new institutions / expand those established over the past 2-3
years that specialise on the micro-segment of the lending
market. It is anticipated that the Microenterprise banks will
build-up capabilities in the near term to handle several
hundred new loans each month. (The existing micro-bank in
Bosnia disburses 350 loans per month with arrears of less than
1 per cent). A medium term goal for these institutions is
sustainability without the use of additional technical
assistance. These banks are designed to be permanent
institutions that out-live the period of donor funding. MEB
Bosnia has been operating since November 1997, and MEB Kosovo
since January 2000. Romania is in an advanced stage of project
preparation and can start-up in the nearest future, FYR Macedonia
is in early stages and would not be expected to start-up until
late 2000. Bulgaria is under consideration. |
Bosnia
and Herzegovina, Bulgaria, FYR Macedonia, Kosovo Province,
Romania |
12 |
5 |
12 |
8 |
8 |
4 |
32 |
| 6.
Contractor Credit Support |
Programme
to provide, through intermediary banks, working capital
advances for local contractors and suppliers involved
in major infrastructure construction projects in the region.
Working capital advances for up to two (or possibly three)
years where the risk of non-payment is mitigated by the
presence of major international firms as lead contractors
and/or financing from IFIs, bilateral grants or other secure
sources of funding. Up to one year for other project specific
needs. First Loss grant funds would be leveraged by a modest
three times in view of the relatively high risks of the
construction industry. Programme is under preparation. As the
client banks will be the same as under the Trade Facilitation
Programme, the implementation stage can be reached well before
the end of 2000. |
Albania,
Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia,
Romania |
|
5 |
5 |
15 |
1 |
1 |
22 |
| 7.
Credit Guarantee Pilot |
EBRD,
working with the World Bank, to help develop a local credit
insurance scheme. The project would help create a grant fund
backed credit insurance scheme to assist American Bank of
Albania take client risk for trade finance, SME and
construction lending. Each insured loan (which must be
credit-worthy in its own right) will be carefully vetted by a
World Bank Project Implementation Unit (PIU) to resolve the
moral hazard issue. |
Albania |
|
3 |
3 |
|
1 |
|
4 |
| 8.
Bank Restructuring |
Aims to
build a financial sector infrastructure dedicated to and
capable of conducting SME finance, based on large retail
networks, modern financial management and sound corporate
governance. The key task in SE Europe, in this regard, is to
promote the restructuring and operational strengthening of
savings banks and other large retail banks. Specifically in
FYR Macedonia, there is a need to consolidate the banking sector.
In the initial phases, programme objectives would be achieved
through the provision of a strong package of technical
assistance, possibly setting up pilot units within the banks
that would be « ring-fenced » from the rest of the
banks’ balance sheets (« bank within a bank »),
and advisers on corporate governance. An expansion of
operations with these banks would be made conditional on
implementation of a strong package of internal reforms. |
Albania,
Bulgaria, FYR Macedonia, Romania |
|
|
|
|
4 |
3 |
7 |
| 9.
Political Risk Guarantees (Investment) |
Political
risk guarantees for investors are provided by MIGA in each of
the countries of the region (not including Kosovo). They
provide insurance for specified political events
(expropriation, currency convertibility, war). They are
designed to promote direct foreign investment between
countries. MIGA plans to disseminate more information about
the availability of existing insurance capacity. Donors may
wish to allocate a portion of existing pledges to Kosovo to a
Political Risk Guarantee Fund so that MIGA can extend similar
products for investors into Kosovo thereby promoting sustained
economic activity. |
Albania,
Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia,
Romania |
N/A |
No
additional funding (except Kosovo) |
| 10.
EBRD/EU SME Finance Facility |
The
EU-EBRD SME Finance Facility for the Accession countries was
established in 1999. EBRD has committed EUR 50 million in
financing for the Loan Window and EUR 25 million for the
Equity Window, while Phare has made available a Special Fund
of EUR 50 million in assistance to support the programme.
Technical Cooperation (TC) for the Loan Window
resources are used to train local banks in lending to small
businesses, while a performance fee is provided to encourage
them to enter a business perceived as costly and high risk.
The Loan Window of the programme is rapidly expanding, with
commitments to date of EUR 35 million, with banks particularly
welcoming the training component. Such assistance has a
long-term institution building benefit for the banking sector,
and provides SMEs with much needed financing |
Bulgaria
Romania |
7.5 |
30 |
|
|
|
|
|
| Total: |
|
|
90.5 |
96 |
75 |
91 |
29 |
36 |
231 |
