The FINANCIAL -- IFC, a member of the World Bank Group, will be providing up to $15 million to the Emerging Europe Growth Fund III (EEGF III) to help expand access to finance for small and medium enterprises in Ukraine, part of a larger effort to support economic growth and create jobs.
IFC’s equity investment supports the largest Ukraine-focused private equity fund to come to market in the last decade. Managed by Horizon Capital, a leading private equity fund manager led by female CEO Lenna Koszarny, the EEGF III has a target size of about $150 million. It will focus on investments in fast-growing, export-oriented companies in IT, light manufacturing, and agribusiness.
IFC’s investment will help catalyze additional private capital for the region, as well as demonstrate Ukraine’s compelling investment opportunities in export-focused sectors. SMEs are well placed to drive economic growth, thanks to the country’s competitive labor force, large domestic market, and proximity to the European Union. But many struggle to access the long-term financing they need to develop and grow, according to IFC.
“This investment will provide much needed growth capital to Ukraine’s SMEs, which will in turn create jobs and spur innovation,” said Jason Pellmar, IFC’s regional head for Ukraine and Belarus. “The project is also well-aligned with our strategy to maximize Ukraine’s private sector-led growth.”
Other investors in the new fund include the European Bank for Reconstruction and Development, the German development bank, the Dutch development bank, and the Western NIS Enterprise Fund, a U.S. government-backed fund. The fund is expected to invest in 10-15 companies with a transaction size of between $5 million and $20 million per investment.
Horizon Capital is a long-term IFC client. In 2008, IFC supported its Emerging Europe Growth Fund II, which focused on Ukraine and the nearby region.