Financing Resources for Trade and Investment Operations Funded by the United States and other international financial institutions
I. UNITED STATES GOVERNMENT
A. Central & Eastern Europe Business Information Center (CEEBIC)
B. Overseas Private Investment Corporation
C. United States Export Import Bank
II. INTERNATIONAL FINANCIAL INSTITUTIONS
1. International Bank for Reconstruction and Development
“FINANCING RESOURCES FOR TRADE AND INVESTMENT OPERATIONS FUNDED BY THE UNITED STATES AND OTHER INTERNATIONAL FINANCIAL INSTITUTIONS” is a good information source[1] for all Romanian companies seeking to finance their investment projects in cooperation with US companies, either in Romania or in third market countries.
The guide lists various programs financially backed by the United States. It is structured in two parts, the first dealing with programs offered by various departments and agencies within the United States Government and the second dealing with the procurement opportunities made available by the International Financial Institutions where the United States is a major shareholder.
I. UNITED STATES GOVERNMENT
A. Central & Eastern Europe Business Information Center (CEEBIC) - US Department of Commerce
The Central & Eastern Europe Business Information Center (CEEBIC) offers a variety of services to the U.S. business community to facilitate trade and investment between the United States and Central and Eastern Europe. This one-stop center for economic and commercial information on Central and Eastern Europe opened in January 1990 and has assisted more than 300,000 companies with questions about this growing market.
Serving as an information clearinghouse on U.S. Government and private sector activities in Central and Eastern Europe, CEEBIC compiles a wide selection of commercially relevant material and disseminates it free of charge to the business community. The main CEEBIC offered services are:
Central & East European Commercial Update
The Central & Eastern Europe Commercial Update contains vital, up-to-date information to assist U.S. companies conducting business in Central and Eastern Europe (CEE). Articles focus on financing, marketing, commercial aspects of various cities and regions, new developments in industry, changing business conditions and regulations, case studies, small business concerns, and specific trade and investment opportunities. A special two-page Partnership Opportunities feature publishes a variety of trade and joint venture leads submitted by CEEBIC s overseas network of employees, located in 11 countries. All submissions are posted on the Internet before appearing in the monthly publication.
Business Counseling
CEEBIC s international trade specialists provide business counseling, by appointment or over the phone, to U.S. companies with specific inquiries about expanding into CEE. Available information includes:
Trade and investment regulations and incentives;
Economic and commercial overviews;
Best prospects for trade and investment;
Upcoming trade promotion events, seminars, and conferences;
Lists of potential trade partners;
Tariff rates; and
Governmental, commercial, and financial contacts.
Balkan Reconstruction Program
CEEBIC is the only complete source of reconstruction information and opportunities for U.S. companies and includes: information on Balkan Reconstruction available through Internet and automated fax systems, Partnership Opportunities developed by on-site CEEBIC contractors; Southeastern Europe Business Brief, a new e-mail service to summarize the latest developments in the business climate and reconstruction efforts.
CEEBICNet
CEEBICNet, CEEBIC s Internet Home Page, provides instant, electronic access to vital commercial information on Central and Eastern Europe. CEEBICNet now features daily updates with the latest news from the region from U.S. embassy cables. CEEBICNet features "live" links to the Home Pages of each CEE country, Internet resources on the region, and other U.S. Government agencies. A "Small Business Corner" contains current information particularly relevant to the small- or medium-sized U.S. exporter.
CEEBICFlash
This 24-hour, fax-on-demand system provides users with a source of up-to-date materials helpful to doing business in the region. CEEBICFlash includes a wide array of country data, financing sources, information on U.S. Government programs for CEE, as well as trade and investment leads. This system allows the U.S. business community to respond quickly to hundreds of new business opportunities. CEEBICFlash can be reached by calling 1-800-USA-TRADE.
Contact and Information Sources
General Information about CEEBIC can be found on its web site at: http://www.ita.doc.gov/
Ms. Jennifer Gothard
International Trade Specialist
International Trade Administration
1401 Constitution Avenue NW, Ronald Reagan Building
US Department of Commerce
Washington DC 20230 USA
Tel: (202)482-0808
Fax: (202)482-3898
E-mail: Jennifer_Gothard@ita.doc.gov
B. Overseas Private Investment Corporation
The Overseas Private Investment Corporation is an independent U.S. Government agency that sells investment services to assist U.S. companies investing in some 140 emerging economies around the world.
OPIC's mission is "to mobilize and facilitate the participation of United States private capital and skills in the economic and social development of less developed countries and areas, and countries in transition from non market to market economies, thereby complementing the development assistance objectives of the United States …"
OPIC accomplishes this mission by assisting U.S. investors through four principal activities designed to promote overseas investment and reduce the associated risks:
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insuring investments overseas against a broad range of political risks; |
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financing of businesses overseas through loans and loan guaranties; |
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financing private investment funds that provide equity to businesses overseas; and |
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advocating the interests of the American business community overseas. |
OPIC Southeast Europe Initiative
On July 30, 1999, during the Stability Pact Leaders Conference in Sarajevo, President Clinton announced a set of trade and investment initiatives aimed at stabilizing, transforming, and integrating the countries of Southeast Europe into the transatlantic community. OPIC's role in this initiative includes:
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Providing a $200 million investment credit line for companies or commercial partnerships with significant U.S. participation. This credit line is currently operational. |
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Establishing a regional presence to serve as a resource for the U.S. investment community; OPIC opened a Southeast Europe regional office in Zagreb, Croatia on February 2000; |
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Creating an equity investment fund that will target the investment needs of the region. On July 26th George Munoz, President and CEO of OPIC, and George Soros, organizer of Soros Private Funds Management (SPFM) launched the Southeast Europe Equity Fund, a $150 million fund to provide new business development, expansion, restructuring, and privatization in the region. |
Contact and Information Sources
General Information about OPIC can be found on its web site at: http://www.opic.gov/
James E. Gale John Moran
Regional Manager, Business Development Director, Business Development
Central Eastern Europe and NIS Overseas Private Investment Corporation
Overseas Private Investment Corporation Andrije Hebranga II/II
1100 New York Avenue, NW 10000 Zagreb, Croatia
Washington, DC 20527 USA Tel: 385-1-461-0777
Tel: (202)336-8629 Fax: 385-1-455-3126
Fax: (202)408-5145 E-mail: jmoran@opic.gov
E-mail: jgale@opic.gov
C. United States Export Import Bank
The Export-Import Bank of the United States (Ex-Im Bank) is an independent U.S. Government agency that helps finance the overseas sales of U.S. goods and services.
It provides guarantees of working capital loans for U.S. exporters, guarantees the repayment of loans or makes loans to foreign purchasers of U.S. goods and services. Ex-Im Bank also provides credit insurance that protects U.S. exporters against the risks of non-payment by foreign buyers for political or commercial reasons. Ex-Im Bank does not compete with commercial lenders, but assumes the risks they cannot accept. It must always conclude that there is reasonable assurance of repayment on every transaction financed.
Ex-Im Bank also provides financing to creditworthy private and sovereign foreign buyers when private financing is unavailable. To qualify for Ex-Im Bank support, the product or service must have at least 50 percent U.S. content and must not affect the U.S. economy adversely. Ex-Im Bank will finance the export of any type of goods or services, including commodities, as long as they are not military-related (certain exceptions exist).
The programs offered by Ex-Im are
Working Capital Guarantees cover 90 percent of the principal and interest on commercial loans to creditworthy small and medium-sized companies that need funds to buy or produce U.S. goods or services for export. Exporters may apply for a Preliminary Commitment--a letter from Ex-Im Bank outlining the terms and conditions under which it will provide a guarantee--which can be used to obtain the best financing terms from a private lender. The lender also may apply directly for a final authorization. Guarantees may be for a single transaction or a revolving line of credit. Guaranteed loans generally have maturities of 12 months and are renewable. Certain lenders, experienced in the program, have been given delegated authority which enables them to commit Ex-Im Bank's guarantee.
Export Credit Insurance policies protect against both the political and commercial risks of a foreign buyer defaulting on payment. Policies may be obtained for single or repetitive export sales and for leases. Short-term policies generally cover 100 percent of the principal for political risks and 90-95 percent for commercial risks, as well as a specified amount of interest. They are used to support the sale of consumer goods, raw materials and spare parts on terms of up to 180 days, and bulk agricultural commodities, consumer durables and capital goods on terms of up to 360 days.
Capital goods may be insured for up to five years, depending upon the contract value, under the medium-term policy which covers 100 percent of principal and interest on the financed portion.
Ex-Im Bank's credit insurance allows exporters to finance receivables more easily by assigning the proceeds of the policy to their lender.
Guarantees of commercial loans to foreign buyers of U.S. goods or services cover 100 percent of principal and interest against both political and commercial risks of nonpayment. Medium-term guarantees cover the sale of capital items such as trucks and construction equipment, scientific apparatus, food processing machinery, medical equipment, or project-related services--including architectural, industrial design, and engineering services. Long-term guarantees are available for major projects, large capital goods and/or project-related services. Ex-Im Bank's Credit Guarantee Facilities also can be used to extend medium-term credit to buyers of U.S. capital goods and services through banks in certain foreign markets.
Direct Loans provide foreign buyers with competitive, fixed-rate financing for their purchases from the United States.
Ex-Im Bank's loans, guarantees and medium-term insurance cover 85 percent of the contract price (100 percent of the financed portion). The foreign buyer is required to make a 15 percent cash payment.
The fees charged by Ex-Im Bank for its programs are based on the risk assessment of the foreign buyer or guarantor, the buyer's country, and term of the credit. Ex-Im Bank's fees are highly competitive with those charged by the export credit agencies of other exporting countries.
Exporters can obtain an Ex-Im Bank Letter of Interest (LI) to assist in negotiations with a potential foreign buyer. The LI indicates the Bank's willingness to consider a financing offer if sale is completed. An LI can be issued within seven days of a request for financing and remains in effect for six months.
Contact and Information Sources
General Information about US Ex-Im Bank can be found on its web site at: http://www.exim.gov/
Mr. Frank M. Graebner
Senior Business Development Officer
NIS and Central Europe
Export - Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, DC 20571 USA
Tel: (202)565-3924
Fax: (202)565-3931
E-mail: frank_graebner@exim.gov
D. United States Trade and Development Agency
TDA is a small, independent federal agency. It is primarily involved in agriculture, energy, environment, health care, information technology manufacturing, mining and minerals development, telecommunications, transportation and water resources. TDA funds project planning activities that directly influence the procurement decisions related to major industrial or infrastructure projects in developing and middle-income countries
TDA's main tool for getting U.S. firms in on the "ground floor" of major projects abroad is the funding of feasibility studies. Feasibility studies examine the technical, legal, economic, and financial aspects of a development project in the concept stage. Study grants are signed directly with the host country project sponsor on the condition that an American firm will be selected to perform the study.
Almost all feasibility studies are preceded by either a Definitional Mission or a Desk Study. TDA contracts directly with a small or minority U.S. business to provide preliminary information about a proposed study and project.
Definitional Missions (DMs) are comprised of teams of technical specialists contracted for a short-term visit to a host country. Their task is to gather additional information on the project.
Desk Studies (DSs) also involve information gathering and analysis; however, they do not require overseas travel by the specialist.
Based on the recommendations contained in the definitional mission or desk study, the advice of the U.S. Embassy, TDA's internal analysis, and budget capabilities, the agency decides on funding requests by feasibility studies.
TDA also sponsors conferences and reverse trade missions called "orientation visits." Both of these activities familiarize foreign decision makers with American-made products and services, build business relationships, and encourage U.S. companies to export to developing and middle-income countries.
In certain regions, TDA also funds trade-related training, which enables host country project personnel to receive technical and managerial training when a U.S. firm is selected to implement a project. Technical assistance is funded by TDA in some situations where the complex demands of a given project require expertise that is unavailable from the host country.
Contact and Information Sources
General Information about US TDA can be found on its web site at: http://www.tda.gov/
Mr. Ned Cabot M. Aileen Crowe
Regional Director, Europe Country Manager
U.S. Trade and Development Agency U.S. Trade and Development Agency
1621 North Kent Street #200 1621 North Kent Street #200
Arlington, VA 22209-2131 USA Arlington, VA 22209-2131 USA
Tel: (703)875-4357 Tel: (703)875-4357
Fax: (703)875-4009 Fax: (703)875-4009
E-mail: ncabot@tda.gov E-mail: acrowe@tda.gov
E. Romanian American Enterprise Fund
The Romanian-American Enterprise Fund (RAEF) is a private U.S. corporation whose mission is to promote free enterprise and entrepreneurship in Romania through investments in and loans to small and medium size enterprises. Established by the President and the U.S. Congress in 1994, RAEF was capitalized by a $60 million grant from the United States Agency for International Development.
RAEF is a catalyst for attracting private investment and has become an enduring financial organization in Romania's emerging market economy.
The Romanian-American Enterprise Fund has four major lines of business:
Major Transaction Program
The Major Transaction Program (MTP) provides venture capital generally in amounts between USD 500,000 and USD 5 million. The MTP utilizes a mix of equity, hybrid financing, and straight debt (loans or leases) to provide both current income and strong upside potential. It minimizes investment risk and broadens impact by diversifying the Fund's portfolio geographically and by industry sector.
The following guidelines apply to the Major Transaction Program:
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Terms of each transaction are negotiated on a commercial basis; |
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The investee has a viable business plan; |
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The Fund takes either majority or minority positions with shareholder-protection provisions and has board representation; |
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RAEF expects to exit investments in three to five years; |
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While not limited to any particular stage in a company's development, RAEF prefers growing companies with a history of successful operations and competent, committed management that has a stake in the success of the investment; |
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The Fund expects its investees to operate in socially, ethically and ecologically responsible ways. |
Small Business Investment Fund
The Small Business Investment Fund (SBIF) uses various investment instruments: straight equity, convertible loan, leasing. The amount of the investment is averagely between USD 50,000 and USD 350,000. The profile of the targeted small and medium firms is as follows:
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Joint Stock Companies; |
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Number of employees: 5 - 150; |
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Turnover: USD 150,000 - 1,500,000; |
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Market value USD: 100,000 - 1,000,000; |
The financing could be used to purchase new equipment, build or refurbish constructions, as working capital or to loan refinancing.
Steps of the investment process:
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receipt of a completed application form and detailed Business Plan with financial statements; |
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primary due diligence prior to signing on Agreement in Principle with the potential Invested; |
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submission of an Investment Memorandum to the Investment Committee for evaluation and approval; |
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final due diligence after Board approval; |
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completion and signing of legal documents. |
Small Loan Program
The Small Loan Program (SLP) is a very successful cooperation between the Romanian-American Enterprise Fund and Banca Romaneasca. SLP is targeting small and medium businesses, and is making loans based on cash flow and quality of management, rather than strictly on collateral. The main features of these loans are as follows:
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dollar denominated loans from USD 20,000 to USD 150,000; |
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fixed interest rate; |
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up to 3 years term. |
Here are the main guidelines of the crediting process:
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Companies with a strong management team. Financing of start-up businesses will be done on exceptional basis; in such cases the applicant's prior experience and level of capital contribution take on special importance. Financial contribution of the applicant should be at least 30% of the total amount for the project. |
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Less then 200 employees; |
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Foreign capital less than 70%; the majority ownership and management control of the borrowing company should be held by private Romanian citizens; |
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Loan proceeds may be used for purposes such as: financing of fixed assets (e.g. equipment and business related real estate), inventory or other material connected with a business expansion. Examples of ineligible uses of funds are: for investing in the securities of other companies; for currency speculation; gambling; for distilled spirits production or distribution. |
SLP is currently available only in certain geographic areas in Romania and the business must be located within these geographic areas to be eligible for the SLP loan.
Micro Loan Program
The Micro Loan Program of the Romanian-American Enterprise Fund operates in cooperation with the CAPA Foundation in Cluj-Napoca, Craiova and Iasi, and in cooperation with the Cooperative Housing Foundation (CHF) in Timisoara, Deva, Arad and Resita. Through this program, the Fund encourages and supports emerging small private business in Romania by providing loans to local entrepreneurs as follows:
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dollar denominated loans from USD 2,500 to USD 15,000; |
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up to 18 months term; |
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fixed interest rate; |
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flexible collateral requirements; |
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loan proceedings: fixed assets (e.g. equipment, tools), working capital. |
Eligible companies has to meet a set of criteria:
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At least one year of activity in the same sector; |
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Strong managerial skills; |
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Ability to return the loan for current operations; |
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Good personal references. |
MLP is currently available only in certain geographic areas in Romania and the business must be located within these geographic areas to be eligible for the MLP loan.
Contact and Information Sources
General Information about RAEF can be found on its web site at: http://www.raef.ro/
Mr. I. John Klipper
President and CEO
Romanian American Enterprise Fund
545 Fifth Avenue, Suite 300
New York, NY 10017 USA
Tel: (212)697-5766
Fax: (212(818-0445
Ms. Mihaela Ciobotea Mr. David Strine
Program Director Program Director
Small and Medium Loan Program Small Business Investment Fund
Romanian American Enterprise Fund Romanian American Enterprise Fund
Strada Vasile Conta Nr. 4 Strada Vasile Conta Nr. 4
Sector 2, 70138 Bucharest, Romania Sector 2, 70138 Bucharest, Romania
E-mail: office@raef.ro E-mail: office@raef.ro
II. INTERNATIONAL FINANCIAL INSTITUTIONS
The World Bank Group is the world’s largest provider of development assistance and has been a significant source of finance in the Southern European countries. The World Bank’s role worldwide and in the region appears to be shifting toward human development and sector reform. While it is expected to continue lending for infrastructure, its emphasis has shifted to helping countries develop the legal, financial, social, government, and market institutions that support a market economy.
The World Bank Group has four main financing facilities:
The International Bank for Reconstruction and Development (The World Bank) provides loans and development assistance to middle - income countries and creditworthy poorer countries. It lends to states or to other entities with a sovereign guarantee, with semi-commercial terms for loan repayment.
The International Finance Corporation (IFC) provides both loans and equity financing to private (non-government) entities on commercial terms.
The Multilateral International Guarantee Agency encourages foreign investment by providing viable alternatives in investment insurance against non-commercial risks in developing countries thereby creating investment opportunities in these countries. It also carries out research and undertakes activities to promote investment flows and disseminate information on investment opportunities in developing member countries, with a view to improving the environment for foreign investment flows to such countries.
The International Development Association (IDA) provides interest-free loans to the world’s poorest countries.
1. The International Bank for Reconstruction and Development (IBRD)
IBRD's main goals are promoting sustainable economic development and reducing poverty. It pursues these goals primarily by providing loans, guarantees, and related technical assistance for projects and programs in its developing member countries. IBRD's ability to intermediate funds from international capital markets for lending to its developing member countries is an important element in achieving its development goals.
The IBRD offers loans and guarantees to its member countries to help meet their development needs. It also provides technical assistance and other services to support poverty reduction. IBRD also assumes various kinds of risk in the process of providing development banking services.
The World Bank Procurement Rules
The World Bank generally requires international competitive bidding for goods and services purchased with the proceeds of a credit from the International Development Association or a loan from the International Bank for Reconstruction and Development. Firms from all countries that are members of the World Bank are eligible to bid for these procurements.
The World Bank’s procurement policies are posted on its web site at: http://www.worldbank.org/opt/procure/guidelin.htm
Preparing to Bid on World Bank Projects
The World Bank lists projects under development on its web site at: http://worldbank.org/html/pic/rsearch.htm
This site allows you to search for projects by country, region and/or sector. The project document will provide a brief description of the project, its stage in development, and contact details for the project owner in the client country and for the World Bank’s loan officers. Lists of projects by country are on the web pages for the resident mission in each country. To obtain more information on the client’s needs and the products and services likely to be required during the project, contact the client in the recipient country. Once the loan is signed, the client will conduct the tender and select the supplier.
World Bank procurement opportunities are publicized in Development Business, a biweekly publication of the United Nations. It is available on a subscription basis, either in print or online form. Information on Development Business can be found at: http://dboserver1.worldbank.ord/index.cfm
Contacts and Information Sources
General information on the World Bank Group can be found on its web site at: http://worldbank.org/
Ms. Myla Taylor Williams
Senior country Officer, Romania, Europe and Central Asia Region
The World Bank
1818 H Street N.W., Washington, DC 20433 USA
Tel: (202)473-6997
Fax: (202)477-8772
2. The International Finance Corporation
IFC is the largest multilateral source of loan and equity financing for private sector projects in the developing world. IFC finances and provides advice for private sector ventures and projects in developing countries in partnership with private investors and, through its advisory work, helps governments create conditions that stimulate the flow of both domestic and foreign private savings and investment.
Its particular focus is to promote economic development by encouraging the growth of productive enterprise and efficient capital markets in its member countries. IFC participates in an investment only when it can make a special contribution that complements the role of market operators. It also plays a catalytic role, stimulating and mobilizing private investment in the developing world by demonstrating that investments there can be profitable.
As a rule, the enterprises IFC finances must be majority private sector owned and controlled. Like other private sector investors and commercial lenders, IFC seeks profitable returns, prices its finance and services in line with the market and shares full project risks with its partners. Even though IFC does not take any government guarantees for its financing, IFC's work often requires close cooperation with government agencies in developing countries.
IFC offers three broad and complementary services.
IFC's traditional and largest activity is project finance. Using its own funds IFC provides both loan and equity finance to private sector projects that meet IFC's appraisal criteria, but which cannot get financing from other sources on reasonable terms. IFC also offer quasi-equity and financial risk management products. It is important to point out that, although IFC lends on market terms, IFC does not compete with, but rather complements private capital.
Another major activity is that of resource mobilization. IFC raises additional funds from foreign commercial banks through its loan participation program. It helps individual corporations from emerging markets to tap the international capital markets. IFC also raises funds from institutional investors through underwriting arrangements for public offerings or the private placement of shares, debentures, and other corporate securities.
IFC's third and increasingly expanding activity is providing country, industry, financial and technical advisory services to member country governments and to private sector corporations.
IFC Procurement Rules
International competitive bidding is not required for goods and services purchased with the proceeds of a loan or equity investment made by the International Finance Corporation.
Contact and Information Sources
General Information about IFC can be found on its web site at: http://ifc.org/
Mr. Harold Rosen, Director
Central & Southern Europe Department International Finance Corporation
2121 Pennsylvania Ave. NW Room F10K-160
Tel: (202) 473-8841
Fax: (202) 974-4314
3. The Multilateral International Guarantee Agency
Investment Guarantee Services
MIGA
provides investment guarantees against certain non-commercial risks (i.e.,
political risk insurance) to foreign investors in developing member countries.
MIGA offers long-term (up to 15, sometimes 20, years) political risk insurance
coverage to eligible investors for qualified investments in developing member
countries. MIGA insures against the following risks:
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Transfer Restriction |
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Expropriation |
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Breach of Contract |
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War and Civil Disturbance |
MIGA can insure new cross-border investments originating in any MIGA member country, destined for any developing member country. New investment contributions associated with the expansion, modernization, or financial restructuring of existing projects are also eligible, as are acquisitions that involve privatization of state-owned enterprises.
MIGA insures investments in a wide range of industries. Types of foreign investments that can be covered include equity, shareholder loans, and shareholder loan guaranties, provided the loans have a minimum maturity of three years.
Other
forms of investment, such as technical assistance and management contracts, and
franchising and licensing agreements, may also be eligible for MIGA guarantees.
An eligible investor is a national of a MIGA member country other than the
country in which the investment is to be made. However, under certain
conditions, investments made by nationals of the host country are also eligible.
A corporation is eligible for coverage if it is either incorporated, and has its
principal place of business, in a member country or if it is majority-owned by
nationals of member countries. A state-owned corporation is eligible if it
operates on a commercial basis.
The program also complements national and private investment insurance schemes,
through coinsurance and reinsurance arrangements to provide investors more
comprehensive investment insurance coverage worldwide. The Agency recently
revised its broker's program to encourage closer cooperation between investment
brokers and MIGA.
Contact and Information Sources
General Information about MIGA can be found on its web site at: http://www.miga.org/
Mr. Stine Lundin-Andresen, Manager
Europe and Central Asia
Multilateral Investment Guarantee Agency
1800 G Street NW Room U 12-319
Tel: (202) 473-6157
Fax: (202) 522-2630
Investment Marketing Services
The Investment Marketing Services Department of MIGA promotes foreign direct investment in member developing countries and economies in transition. IMS' goal is to catalyze the flow of FDI into developing countries to spur economic growth and reduce poverty. Core services fall into three broad areas:
Develop and enhance skills, knowledge and tools available to investment intermediaries through training in cutting edge marketing and management techniques.
Disseminate information on investment opportunities, business operating conditions, and business partners through IPAnet, the World Bank Group's on-line investment marketplace, and Privatization Link, the new marketing service on privatization in Emerging Markets.
Promote foreign investment by bringing together foreign investors, host governments, and project sponsors through thematic and sector conferences.
IMS clients include investment promotion agencies, business associations, promotion departments in sectoral ministries, and other government and private sector organizations that are involved in promotion or facilitation of foreign direct investment.
With experience in investment promotion in over 100 countries, and a diverse array of partnerships with public and private sector institutions, IMS is uniquely positioned to deliver a quality product for our clients.
Contact and Information Sources
General Information about MIGA can be found on its web site at: http://www.miga.org/
Mr. Karin Millett
Manager, Investment Marketing Services
Multilateral Investment Guarantee Agency
1800 G Street NW Room U 12-401
Tel: (202) 473 0394
Fax: (202) 522 2650
B. European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) was established in 1991 to foster the transition to open market economies in the countries of Central and Eastern Europe and the Commonwealth of Independent States. It is a project-based, international financial institution, and its loans carry commercial terms.
EBRD usually lends 25 to 50 percent of the total cost of a project, and can lend to a state, a state entity with a state guarantee or a credit-worthy private investor. EBRD can also make equity investments. EBRD has a special mandate to emphasize private sector development, and its charters prescribes that a maximum of 40 percent of its finance in any country can be to government entities or state-owned enterprises. At least 60 percent must be to privately owned entities or state-owned entities in process of privatization.
EBRD Procurement Rules
EBRD has detailed Procurement Policies and Rules, which are designed to assure that the best use is made of the funds made available through its loans. EBRD actively monitors procurement practices to ensure that clients adhere to its procedures.
Public tendering is required for all public sector loans. Calls for tenders are open to nationals of all countries. Transparency and equal opportunity for all bidders on a level playing field is emphasized. If a bidder has reason to believe that its bid has not been properly considered within the terms of the tender, effective channels exist for dispute resolution.
Public tendering is not required for loans to private sector parties. Where private capital is at risk, EBRD assumes that the private investors will have sufficient incentive to ensure economy and efficiency in use of funds.
The normal terms of an EBRD loan can be softened by combining the loans with grants from various sources including the EU and individual countries’ bilateral donor programs. In such cases, elements of the project are usually split between the EBRD and the grant provider. This allows the EBRD portion to be tendered according to its rules, while the grant portion of the project may be tendered according to the donor’s more restrictive rules.
How to bid on EBRD Projects
Firms can track upcoming projects by monitoring Project Summary Documents. These are prepared for each project and made available after initial review for public projects (typically 4-5 months before EBRD Board consideration) and at least 30 days before Board review for private projects.
Project Summary Documents are posted on the EBRD web site at: http://www.EBRD.com/english/opera/psd/index.htm
The Project Summary Documents contain contact information for the EBRD project officer who can provide additional information about the upcoming loan.
Procurement notices are published in EBRD’ Procurement Opportunities, which is published monthly with weekly updates. They are also posted weekly on the EBRD web site at: http://www.EBRD.com/english/procure/index.htm
Firms interested in private sector investment opportunities should undertake project development with appropriate partners in the countries of interest. Once a project is ready for financing, the firm should contact the appropriate team leader in EBRD, as shown below.
Contact and Information Sources
General Information about EBRD can be obtained from its web site at: http://www/EBRD.com
Team Leaders are:
Johan Bastin Roy Knighton
Director, Municipal and Environmental Infrastructure Director, Transportation
Tel: (44)171-338-6340 Tel: (44)171-338-6684
Fax: (44)171-338-6964 Fax: (44)171-338-7301
Ananda Covindassamy Peter Reiniger
Director, Power and Energy Utilities Director, Telecommunications
Tel: (44)171-338-6872 Tel: (44)171-338-6668
Fax: (44)171-338-7280 Fax: (44)171-338-6674
Financing for Small and Medium Enterprises (SME’s)
As a guideline, the standard minimum involvement for the EBRD is € 5 million, though this may be reduced if the project has fundamental benefits for the country. The EBRD has established links with a variety of financial intermediaries to provide financing for projects that are too small to be funded directly. This allows the Bank to support SMEs, which are vital for generating a strong private sector.
Additional information on SME’s financing can be found at:www.ebrd.org/english/busin/index.htm
[1] Information up dated by end July 2000