OeEB's continued investments amidst the Russian war in Ukraine signals confidence in EFSE's ability to support MSMEs and financial institutions in Southeast Europe and the Eastern Neighbourhood Region.
The European Fund for Southeast Europe (EFSE) has received a EUR 20 million investment of A Shares for an eight-year tenor from The Development Bank of Austria (OeEB) – further building on their 14-year partnership. OeEB’s investment demonstrates its backing for EFSE’s mandates in Southeast Europe (SEE) and the Eastern Neighbourhood Region (ENR).
OeEB has proven to be an all-weather partner. In August 2022, the development finance institution invested EUR 20 million in EFSE for a six-year tenor, signalling strong support for EFSE’s countercyclical role in the region amid the Russian invasion of Ukraine. Moreover, despite turbulence in capital markets, this investment helped enable a strong increase in private leverage later in 2022.
OeEB’s renewed investment demonstrates its commitment to EFSE’s mission and vision, as well as its confidence in EFSE’s performance and impact in a dynamic financial environment. OeEB and EFSE share the common goal of promoting sustainable and inclusive growth in SEE and the ENR.
This investment will support the EFSE portfolio, providing loans to micro-, small, and medium sized enterprises (MSMEs) in SEE and ENR through local financial institutions. The fund will continue providing crisis support to its Partner Lending Institutions (PLIs) while delivering on key long-term strategic priorities. Some of the key goals are to integrate sustainability principles into PLI strategy, operations, and governance, to promote the local currency financing agenda with the necessary structural adjustments, and to offer capital-supporting investment instruments in Southeast European markets.
EFSE Board Chairperson Klaus Müller said: "We feel deeply honoured by OeEB's continued trust and investment in EFSE, which reflects our long-standing and shared commitment to advancing sustainable development in Eastern Europe by providing accessible finance for MSMEs. This enduring support strengthens our drive to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region. On behalf of EFSE, I would also like to extend our warmest congratulations to OeEB on its 15th anniversary. We look forward to continuing our long-standing and fruitful collaboration."
Sabine Gaber, Member of OeEB’s Executive Board, said: "When OeEB was founded in 2008, EFSE was the first investment we signed. As we celebrate our 15th anniversary this year, we also look back at the successful and valuable partnership we have shared with EFSE ever since. Especially in light of the current geopolitical and economic situation, EFSE’s work is more important than ever and we are excited to further build on our joint mission to improve financial inclusion as a driver for sustainable economic development."
An impact investment fund established in 2005, the European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region by investing in the success of micro and small enterprises as well as improved living conditions for private households. As access to financial services is key to developing this segment, EFSE focuses on helping local financial sectors strengthen their ability to provide responsible financing for this target group. Alongside its investment activities through local partners, EFSE multiplies its impact through the EFSE Development Facility, which provides technical assistance, training, and other nonfinancial support to entrepreneurs and institutions. The fund’s impact management system, through its advisor Finance in Motion, underwent an independent verification by impact auditor BlueMark affirming strong Operating Principles for Impact Management alignment in 2021.
EFSE was initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. As the first public-private partnership of its kind, EFSE draws its capital from donor agencies, international financial institutions, and private institutional investors.
Finance in Motion GmbH, Germany, serves as EFSE’s advisor and Hauck & Aufhäuser Fund Services S.A., Luxembourg, acts as manager.
For more information on the European Fund for Southeast Europe, please visit: www.efse.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com