On 4 October 2016, Investicijų ir verslo garantijos (INVEGA) and the European Bank for Reconstruction and Development (EBRD) signed a cooperation agreement that will expand INVEGA’s competencies as a national financial institution responsible for the implementation of risk capital funds in Lithuania. The EBRD is an international financial institution (IFI) which has been supporting the development of the private equity and venture capital sectors in its countries of operations since 1991.
This agreement will help Lithuania implement risk capital instruments to develop its private equity and venture capital markets. These instruments will be implemented using funding from the 2014-20 European Union (EU) Structural and Investment Funds programme. The need for risk capital instruments was included in the ex ante assessment on business financing from the 2014-20 European Union Structural and Investment Funds programme, conducted by the Lithuanian Ministry of Finance in cooperation with other stakeholders.
Audrius Zabotka, Director General of INVEGA, welcomed the cooperation with the EBRD which will enable INVEGA to benefit from the experience of an IFI and provide much-needed equity financing for Lithuanian small and medium-sized enterprises (SMEs). “Through the implementation of new risk capital funds we will enhance the supply of investment capital in Lithuania, enabling ambitious companies to grow faster, create more jobs and contribute to the growth of the national economy,” said Mr Zabotka.
Anne Fossemalle, Director, Equity Funds at the EBRD, added: “We are very pleased to sign this cooperation agreement with INVEGA. It represents a milestone in our efforts to strengthen the private equity and venture capital ecosystem in Lithuania and support the provision of risk capital for Lithuanian SMEs. In INVEGA we have found a trusted and competent partner and we look forward to working together for the benefit of the Lithuanian economy.”
Zsuzsanna Hargitai, Director, EU Funds Co-Financing at the EBRD, commented: “Our cooperation with INVEGA represents a new model for how institutions such as the EBRD can work with national development financing institutions to effectively implement structural funds programmes. We are delighted with the opportunity to work closely with INVEGA and look forward to our collaboration.”
The financing programme will be used to implement four risk capital funds via selected financial intermediaries, deploying around €58.8 million of public funding and leveraging additional financial resources. The terms for the implementation of the risk capital funds are to be published shortly for comments by market participants. The instruments will be targeted to facilitate the start-up and business development needs of SMEs.
The European Bank for Reconstruction and Development (EBRD) is an international financial institution established in 1991. Shareholders of the Bank are 65 countries, the European Commission and the European Investment Bank. The EBRD invests in more than 30 countries from Estonia to Egypt and Morocco to Mongolia. The Bank supports the development of the private sector in its countries of operations through investments and policy dialogue. The EBRD provides funding for projects in agriculture, energy efficiency, financial institutions, manufacturing, municipal and environmental infrastructure, natural resources, energy, ownership, tourism, small and medium enterprises, telecommunications, information technologies and transport.