PROJECT

Projects

Summary of Proposed Investment

Project Number

10148

Company Name

Hanseatic Capital, LLC

Date SPI Disclosed

Jul 19, 2000

Country

Eastern Europe Subregion

Industry

Financial Markets

Projected Board Date

Sep 1, 2000

Status

Completed

Sector

Finance Companies

Department

Regional Industry FIG LAC & EUR

Environmental Category

FI

Previous Events

Approved : Nov 8, 2000
Signed : Dec 13, 2002
Invested : Oct 10, 2003

Project Description

The proposed project is an eight-year fund that would provide loan, quasi-equity and equity financing to a wide range of SMEs in the Baltics. The fund would have an investment period of four years and would expect to make approximately 30-40 investments with an average size of US$500,000 to US$1.5 million. A separate technical assistance (TA) facility would be mobilized through IFC donor TA trust funds to make available up to US$1.5 million in aggregate to portfolio companies of the fund for business plan preparation, industry-specific expertise, export marketing assistance, environmental management and financial management. The fund would be managed by Hanseatic Capital Management, LLC, a limited liability company to be organized by BalAEF.

While SMEs play a major economic role in the Baltics - generating over 65% of employment, 20% of exports, and 45% of GDP - term finance for SMEs in the Baltics remains extremely scarce, with banks typically focusing on large private companies and foreign joint-ventures. In addition, Baltic SMEs lack equity capital; more than 90% of all companies are undercapitalized and thus constrained in their ability to expand and restructure. SMEs are also in need of upgraded management and technial and financial know-how to remain competitive in a more open market environment. The financing and TA that would be provided by the Fund is expected to address these needs. IFC’s involvement as a lead investor and its input into structuring the fund would be crucial in mobilizing private and public participation and raising funds for the TA facility.

Sponsor / Cost / Location

Development Impact