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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 22500 |
| Project name | Euroventures Ukraine Fund II LP |
| Country | Ukraine |
| Sector | Collective Investment Vehicles |
| Department | Private Equity and Investment Funds |
| Company name | Euroventures Ukraine Fund II |
| Environmental category | FI-2 |
| Date SPI disclosed | August 19, 2004 |
| Projected board date | September 27, 2004 |
| Status | Active |
| Previous Events | Invested: September 16, 2005
Signed: June 30, 2005
Approved: April 22, 2005 |
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| Description of company and purpose of project |
| Euroventures Management Ltd. (the Fund Manager) is establishing Euroventures Ukraine Fund II LP (EVU II or the Fund) to make direct equity and quasi-equity investments in mid-sized private companies based primarily in Ukraine and in cross-border transactions involving neighboring countries, mainly Russia. The Fund will make investments averaging $4 million to $6 million in a diversified portfolio of companies operating in the unlisted high growth segments. |
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| Project sponsor and major shareholders of project company |
| The Fund is being formed and managed by Euroventures Management Ltd., a private company registered in Cyprus and a representative office in Kiev, Ukraine. The Fund Manager established its first fund in Ukraine, Euroventures Ukraine Fund (EVU), at the end of 1998 with $30 million. |
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| Total project cost and proposed IFC investment |
| The target size of the Fund will be $50 million to $75 million and IFC’s proposed investment is $7.5 million in equity or up to a maximum of 19% of the total fund size. |
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| Location of project and description of site |
| The Fund will be managed by Euroventures Management Ltd. from its office in Kiev, Ukraine. The Fund will make equity investments primarily in Ukraine and in cross-border transactions involving neighboring countries, mainly Russia. |
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| Project Development Impact and IFC's Role |
There are few private equity players investing in Ukraine today, and the number of players is far fewer and the amount of private equity capital available is far less than that in Russia, Romania and Bulgaria. One estimate, which excludes domestic financial-industrial group wealth invested in strategic sectors, shows that the total cumulative private equity funding (through third-party funds, proprietary funds, holding companies and domestic financial-industrial groups) for Ukraine is only $400-600 million. Of this amount, about $100 million is uninvested capital. The existing regional funds are bypassing Ukraine to focus on other countries in the region, in particular Russia, and EVU and Western NIS Enterprise Fund (a fund initially sponsored by the U.S. government) are the only two institutional funds actively investing in Ukraine today. Further, neither the normal banking sector nor the micro financing sector provides funding to medium-sized businesses, which typically need $3 million to $8 million in long-term financing.
The Fund will contribute to the economic development of Ukraine by serving this financing gap. The Fund will provide 10-12 companies with equity funding and managerial support, with the aim of making them regionally competitive and therefore attractive to strategic investors. |
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| Environmental and social issues - Category FI-2 |
This is an FI Type 2 project. The Fund Manager will be required to establish an environmental and social management system to ensure that investments made by the Fund comply with applicable host country and World Bank Group environmental, social, and health and safety requirements. IFC will assess the Fund Manager’s capacity to establish an EMS.
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| To contact the project company, please write to: |
Leslie Hawrylyshyn, Partner
Euroventures Management Ltd
11 Pushkinska St., Apt 4
Kyiv, 01034, Ukraine |
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