MICROCAPITAL BRIEF: IFC Invests $24m in Evolving Europe Principal Investments Fund (EEPIF) to Boost SME Finance

The International Finance Corporation (IFC), a member of the World Bank Group, recently invested EUR 20 million (USD 24.2 million) in the Evolving Europe Principal Investments Fund (EEPIF), which is managed by UK-based private equity firm Integral Venture Partners, with the goal of improving the financial inclusion of small and medium-sized enterprises (SMEs) in 14 countries. Among the countries to receive investment are Kosovo, Bosnia and Herzegovina, Serbia and Bulgaria. As part of the agreement, Integral will assist EEPIF investees in implementing IFC’s environmental and social standards.

Integral CEO Stefan Tzvetkov said the deal will enable EEPIF “to further scale up and continue to provide capital to SMEs in our target markets, assist them in growing their businesses, and amplify their positive economic and social impact.”

Wiebke Schloemer, IFC’s Director for Europe and Central Asia, said of the deal, “This regional fund provides an opportunity to substantially deepen the private equity market in the region by attracting institutional equity. This will help fund the needs of fast-growing SMEs and improve their governance and business practices.”

EEPIF seeks to invest in companies with valuations between EUR 10 million (USD 12.1 million) and EUR 100 million (USD 121 million) to “help promote private and entrepreneurial initiatives.” The fund has a target size of EUR 150 million (USD 181 million). In addition to IFC, Integral’s investors include the UK-based multilateral European Bank for Reconstruction and Development and the EU’s European Investment Fund. The fund’s first close occurred in November 2019.

Founded in 2019, Integral “advises and manages institutional capital” for institutional investors, entrepreneurs and family offices. The firm operates offices in Hungary, Serbia and the UK, and it has three investees as of March 2021.

Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of June 2020, IFC reported total assets of USD 96 billion.

By Bradley Shulman, Research Associate

Sources and Additional Resources

IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26293

Integral homepage
https://integralvp.com/

IFC homepage
https://www.ifc.org/

World Bank homepage
https://www.worldbank.org/

EIF homepage
https://www.eif.org/

Integral press release on EEPIF first close
https://integralvp.com/2020/03/16/integral-venture-partners-announces-the-first-close-of-its-first-fund/

European Bank for Reconstruction and Development profile on EEPIF
https://www.ebrd.com/work-with-us/projects/psd/evolving-europe-principal-investments-i.html

Previous MicroCapital article on IFC
https://www.microcapital.org/microcapital-brief-insurtech-pasarpolis-of-indonesia-raises-5m-in-equity-from-international-finance-corporation-ifc-for-microinsurance/

Previous MicroCapital article on the World Bank
https://www.microcapital.org/microcapital-brief-laos-launches-40m-msme-pandemic-relief-project-with-world-bank-loan-proceeds/

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