MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE), Green for Growth Fund (GGF) Loan $24.2m to Macedonia-based Halkbank AD Skopje to Support Energy Efficiency; Housing; Micro-, Small Enterprises (MSEs)

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), and Green for Growth Fund, Southeast Europe (GGF), a Germany-based fund that invests in energy efficiency and renewable energy sources, recently granted loans of EUR 10 million (USD 12.1 million) each to Halkbank AD Skopje, a Macedonia-based bank, for expanding the bank’s work with micro- and small enterprises (MSEs) as well as to support energy efficiency and the housing market. This is the second loan that GGF has disbursed to Halkbank, with the first one closing in 2010.

According to Necdet Palakci, the CEO of Halkbank, ‘’Once again, the cooperation between Halkbank AD Skopje and GGF results in a positive way. We are being enabled to provide the Macedonian market with the optimal-condition funds, which will be used for improving the environment and the usage of energy among Macedonian population and businesses. Whether for personal or business needs, the benefits of these credit products at low interest rates will lead to lower energy and operational costs. We are very pleased to have such a serious and reliable partner for this purpose…’’

As of 2013, Halkbank reported a gross loan portfolio of EUR 221.4 million (USD 269.5 million), total deposits of EUR 23 million (USD 28 million) return on equity of 4.2 percent and return on assets of 0.2 percent. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion). GGF operates in 13 countries in Central Asia and reports total assets of EUR 242 million (USD 326 million), a loan portfolio of EUR 170 million (USD 229 million) and profits of EUR 430,000 (USD 579,000) as of December 31, 2013.

By Ananya Tiwari, Research Associate

About European Fund for Southeast Europe (EFSE)
The European Fund for Southeast Europe (EFSE) was established in 2005 by Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW), a German development bank, with financial support from the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung) and the European Commission of the EU. EFSE seeks to aid economic development in southeastern Europe and parts of central Asia by supporting the provision of financial services to low-income households and micro- and small enterprises via local financial institutions. EFSE is privately managed, with Oppenheim Asset Management Services of Luxembourg acting as fund manager and Finance in Motion GmbH of Germany acting as fund advisor. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion). As of 2014, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About Green for Growth Fund, Southeast Europe (GGF)
Luxembourg-based Green for Growth Fund, Southeast Europe (GGF) focuses on expanding the use of renewable energy sources and enhancing energy efficiency in southeastern Europe. It does this by financing and refinancing energy-efficiency initiatives and investing in small to medium-scale renewable energy projects. Furthermore, GGF offers technical support to local financial institutions working or seeking to work in the energy finance arena. GGF was established in 2009 by Germany’s Kreditanstalt für Wiederaufbau (KfW) and the Luxembourg-based European Investment Bank (EIB) with the financial support of the following organizations: EU’s European Commission, the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), and the European Bank for Reconstruction and Development (EBRD). As of 2014, GGF operates in 13 countries: Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Georgia, Kosovo, Moldova, Montenegro, Serbia, Turkey and Ukraine. GGF reported total assets of EUR 242 million (USD 326 million), a loan portfolio of EUR 170 million (USD 229 million) and profits EUR 430,000 (USD 579,000) as of December 31, 2013.

Sources and Additional Resources

[1] EFSE Press Release, http://www.efse.lu/media/pdfs/press-releases/2014/2014-12-efse-loan-to-halkbank-facilitates-access-to-credit-for-macedonian-mses-and-low-income-households.pdf

[2] GGF Press Release, http://www.ggf.lu/News—News-Details—2014-12-23-GGF-STRENGTHENS-COOPERATION-WITH-HALKBANK-IN-FYR-MACEDONIA-WITH-SECOND-EUR-10-MILLION-LOAN——_site.site..html_dir._siteid.31_nav.95_entryid.221_likecms.html

MicroCapital, November 13, 2014, Europe (EFSE) Provides $12.5m to Fibabanka of Turkey to Support Small, Medium-Sized Enterprises (SMEs), https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-provides-12-5m-to-fibabanka-of-turkey-to-support-small-medium-sized-enterprises-smes/

MicroCapital, November 8, 2014, “Green for Growth Fund, Southeast Europe (GGF) Lends $5m to Muganbank of Azerbaijan for On-Lending to Micro-, Small and Medium-Sized Enterprises (MSMEs) for Energy Efficiency Projects,” https://www.microcapital.org/microcapital-brief-green-for-growth-fund-southeast-europe-ggf-lends-5m-to-muganbank-of-azerbaijan-for-on-lending-to-micro-small-and-medium-sized-enterprises-msmes-for-energy-efficiency-projec/

MicroCapital, September 24, 2014, “Green for Growth Fund, Southeast Europe (GGF) Lends $2m to Microinvest of Moldova for On-Lending to Micro-, Small Enterprises (MSEs),” https://www.microcapital.org/microcapital-brief-green-for-growth-fund-southeast-europe-ggf-lends-2m-to-microinvest-of-moldova-for-on-lending-to-micro-small-enterprises-mses/

MicroCapital, “December 23, 2013, European Fund for Southeast Europe (EFSE) Loans $3.4m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing in Armenia, Makes $106k Equity Investment in Kreditimi Rural I Kosoves of Kosovo,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-3-4m-to-agricultural-cooperative-bank-of-armenia-acba-leasing-in-armenia-makes-106k-equity-investment-in-kreditimi-rural-i-koso/

MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

MicroCapital Universe Profile: Green for Growth Fund, Southeast Europe (GGF), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Green+for+Growth+Fund

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