22500 - Euroventures Ukraine Fund II LP

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Summary of Proposed Investment

Project Number

22500

Company Name

EUROVENTURES UKRAINE

Date SPI Disclosed

Aug 19, 2004

Country

Ukraine

Industry

other

Projected Board Date

Sep 27, 2004

Status

Completed

Sector

Private Equity/Venture Cap Fund - Country

Department

Equity Portfolio Management

Environmental Category

Previous Events

Approved : Apr 22, 2005
Signed : Jun 30, 2005
Invested : Sep 16, 2005

Project Description

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.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	7.50

Development Impact

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.

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.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Leslie Hawrylyshyn, Partner
Euroventures Management Ltd
11 Pushkinska St., Apt 4
Kyiv, 01034, Ukraine

This Summary of Project Information (SPI) 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. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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