EBRD AND IKB SUPPORT INVESTMENT IN CENTRAL EUROPE
In the first deal of its kind, the European Bank for Reconstruction and Development (EBRD) signed an agreement with IKB Deutsche Industriebank AG (IKB) to support European medium-sized companies with their investments in Central Europe. Under the agreement, the EBRD will provide an un-funded risk participation in the amount of EUR 70 million, or 35 per cent, of a EUR 200 million pool of loans extended by IKB to companies developing in this region.
The EBRD facility will free up IKB's risk capital, which will provide IKB with means to support the financing of projects in the region on a larger scale.Small and medium-sized enterprises are the backbone for all economies and essential for the creation of jobs, said Jean Lemierre, president of the EBRD. The Bank is entering into a deal with IKB and its clients which will help us develop this sector. We hope this initiative will encourage the expansion of investment in SMEs in the less advanced countries of our region. With over 70 years of experience in long-term financing of medium-sized companies, we understand the crucial role they play in all economies, said Stefan Ortseifen, a member of IKB's Management Board. This deal will help us relieve the severe constraints of unavailable long-term finance for foreign investments in the region and through interaction with local suppliers and distributors, this project is also expected to have a strong impact on the local SME sector.IKB, a publicly traded bank incorporated in Germany, is the leading commercial provider of long-term, fixed rate investment finance to medium-sized companies in Germany.